Time lag effects - operations function, Operation Management

Assignment Help:

Time Lag Effects - Operations Function

Feedback control in complex systems can bring its own problems, due to time lag between measuring the output deviation and realising the effects of the corrective adjustments. A well-known illustration of this phenomenon was presented by Jay W Forrester in his book, Industrial Dynamics. He had been consulted by a white goods manufacturing concern which had been experiencing wildly fluctuating production levels over a period of years; despite the best efforts of the company's management they had been unable to keep production output in reasonable balance with customer demand. Forrester and his team studied the operations of the company's distribution chain (shown in simplified form in the figure) and formulated a computer simulation model of the factory - warehouse - distributor - retailers.

1355_Time Lag Effects – Operations Function.png

The figure below (adapted from Forrester, 1965) shows the results obtained when a 10 per cent step-increase in demand at the retail outlets was introduced. This chart is necessarily 'cluttered', to show how the various order, inventory and production levels changed in response to the initial increase in sales.

1964_Time Lag Effects – Operations Function 1.png

For our purposes it will be sufficient if you locate the two lines labeled 'Retail sales' and 'Factory production output'. It was found that, because of a series of time-lags in the chain, the feedback signal was greatly amplified by the time it reached the factory, resulting in over-reaction. Note that the production level climbs by 45 per cent, creating an excessive build up of inventories. In response the production level falls to 3 per cent less than the original level, and so on. It takes about 18 months for the fluctuations to be damped out.


Related Discussions:- Time lag effects - operations function

Explain ethical behaviour by corporations, Read and review the excerpts fro...

Read and review the excerpts from the Sarbanes-Oxley Act in the Appendix of the textbook. Identify three of the criminal penalties that can be charged under the Sarbanes-Oxley Act.

Why communication is an important consideration in firms, Communication is ...

Communication is an important consideration in organizations, and a number of different constructs fit within the communication viewpoint. What types of leader communication attitu

Describe health care in your own community, Technology Assessment analyze t...

Technology Assessment analyze the basic technology underlying health care information systems and determine the most pressing need for innovation. 2. Explain (with specific example

Develop a competitor profile for your college, Develop a competitor profile...

Develop a competitor profile for your college and for the college geographically closest to yours next prepare a brief strategy strategic plan is to improve the competitive positio

Organizational goals, outline major benefits of organizational goals and d...

outline major benefits of organizational goals and describe the situation in which have observe the benefiys

Explain what are liquidity ratios, Now let's continue our discussion about ...

Now let's continue our discussion about the financial aspects of owning your own business that are part of, by considering the idea of "ratio analysis". In considering "financial r

Explain forecast including trend for the month, A manufacturer of printed c...

A manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. At the end of December, the company wishes to forecast sal

Explain economic crisis, Assume that you own a very upscale restaurant (thi...

Assume that you own a very upscale restaurant (think shearwater at the hotel Del Coronado or the grant grill at the us grant hotel). Business has fallen off greatly at your restaur

Difference between business and operations strategy, What is the difference...

What is the difference between business and operations strategy?  Answer: There is a hierarchy of strategic decision making, each focused on a different time horizon and at vary

Explain challenges has the european union consortium faced, Describe what c...

Describe what challenges has the European Union Consortium faced in the last 2-3 years

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd