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 when linking marketing requirements, When linking marketing require...

When linking marketing requirements and manufacturing strategy, what design approaches for shop floor system should be considered? JIT and Lean MRP and PAC MRP and JIT

Explain what other kinds of information would be helpful, A pension fund ha...

A pension fund has accumulated $1 million in a retirement plan for James B. Smith, who retired this month at age 65. If Mr. Smith has a life expectancy of 75 years, what is the min

Explain behavior and performance with the objectives, The effectiveness of ...

The effectiveness of any compensation system to attract, retain and align employee behavior and performance with the objectives of the enterprise is dependent upon management credi

Explain average performance of the system, Refer to the results from the Si...

Refer to the results from the SimQuick simulation model below to answer the following 5 multiple-choice questions. You will see that the results are similar to the two-teller, bank

Explain how does a company''s vision and plans affect, How does a company's...

How does a company's vision & plans affect its structure?

Explain graph based layout construction method, Is the Graph based layout c...

Is the Graph based layout construction method always produces maximally Planar Graph & Maximally Planar weighted graph?

Explain arbitration as a quasi judicial process, Examine arbitration as a q...

Examine arbitration as a quasi judicial process in which parties agree to submit unresolved disputes to a neutral third party for binding settlement. Explain the labor- contractual

Explain organizational structure, Analyze the reason for the type of organi...

Analyze the reason for the type of organizational structure employed by the organization, and identify the key positions that support that organizational structure.

Explain the scope of an external customers project, Project sponsors within...

Project sponsors within the contractors company have the authority to change the scope of an external customers project as they see fit. Answer Have the authority to change t

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