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

Define how customers were affected the bp oil spill disaster, How customers...

How customers were affected the BP oil spill disaster in the gulf

Explain assess the strategy of wal-mart in china, Give your assessment of t...

Give your assessment of the requirements for Cuba to develop a free and independent trade union. Determine if it is essential for a free society. Assess the strategy of Wal-Mart

Explain what is the relationship between swot and strategy, What is the rel...

What is the relationship between SWOT and Strategy? Provide real world examples. Additional research is necessary by using scholarly publications. Cite accordingly.

Compute the seasonal index, A seasonal index for a monthly series is about ...

A seasonal index for a monthly series is about to be calculated on the basis of the past four years' accumulation of data. the four previous July values were 110, 135, 125, and 130

Explain current business operating on a global scale, Introduce a new speci...

Introduce a new special form of insurance for current business operating on a global scale with a diverse work force, which includes virtual employees.

Supplier relationships in a supply network, Supplier relationships in a sup...

Supplier relationships in a supply network are categorised in which ways:- Single, multiple, delegated and parallel

Explain direct effects and indirect effects of goals, What is the differenc...

What is the difference between direct effects and indirect effects of Goals on choice of strategy?

Describe why your company needs to be socially responsible, You are the CEO...

You are the CEO of a factory that manufactures furniture. Explain briefly why your company needs to be socially responsible. Briefly comment on any two areas of social responsibili

Explain the first step in segmenting and targeting markets, The first step ...

The first step in segmenting and targeting markets is to recognize a need. group potential buyers into segments. create product groupings. estimate size of the overall

Explain primary causes of information management, Analyze the primary cause...

Analyze the primary causes of information management / information technology project failures and recommend at least three (3) best practices that could be adopted by any organiza

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