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 what is the average number of customers in the bank, From 11:00 AM ...

From 11:00 AM to 12:00 Noon, 30 people arrive at a bank on average. When they enter they get in line to wait for a cashier. On average there are 3 customers in line waiting. On ave

Explain dynamically continuous innovation, The terms continuous innovation,...

The terms continuous innovation, dynamically continuous innovation, and discontinuous innovation are classifications based on generated sales. production technology. degre

Develop a spreadsheet model as well corresponding data table, The circulati...

The circulation manager of The New York Times in State College, PA is trying to decide how many copies of the upcoming Sunday edition of the paper to order so as to meet the demand

Explain production standards place managements, State how production standa...

State how production standards place managements and unions at odds against each other. Why do some unions prefer the right to strike in this matter while others prefer arbitration

Linear programing, Linear objective function & non linear objective functio...

Linear objective function & non linear objective function.

Production & Purchasing Managements, Hierarchical planning in operations/Pr...

Hierarchical planning in operations/Production managemnt and the types of time frames in each hierarchy?

Capacity planning, why is capacity planning important in operations managem...

why is capacity planning important in operations management

Define how you might take production line approach, Q1: Explain how you mig...

Q1: Explain how you might take production line approach (transferring the concepts and methodologies of operations management) to a service organization such as a branch bank. Q

Explain what statistical test should you use to test, You are the manager o...

You are the manager of the Gander Mountain store in Frog town, Illinois. Recently, a customer mentioned that they believed your prices for ammunition were lower than the prices of

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