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 trench coat and improve profitability, 1. How did the overall consu...

1. How did the overall consumer behaviour of Burberry customers change from 2006 to 2010. 2. What measures did Burberry take to improve sales of Burberry merchandise, especially th

Explain a marketing plan, You have a novel product idea and a working proto...

You have a novel product idea and a working prototype for floating fishing pliers. You use an extrusion process to manufacture the pliers, and your family assembles them out of you

Explain the four functions of management, Need help with a paper? Prepar...

Need help with a paper? Prepare a 700- to 1,050-word paper in which you define the four functions of management (planning, organizing, leading, and controlling). In your paper,

Define management practices increasing government regulation, How do you th...

How do you think management practices might change in response to increasing government regulation in the banking and health care industries?

Elements, what are the elements of production forecasting?

what are the elements of production forecasting?

Responsiveness - customer satisfaction and service quality, Responsiveness ...

Responsiveness - Customer Satisfaction and Service Quality Concerns the willingness or readiness of employees to provide service. It involves timeliness of service: mailing a

Explain business-to-business and customer-to-business, If Bill decides to e...

If Bill decides to enter the world of ecommerce, which of the ecommerce models (business-to-business, customer-to-business, business-to-customer, or customer-to-customer) would you

Describe what role organizational structure plays, Discuss what role organi...

Discuss what role organizational structure plays in an organization's efficiency & effectiveness

Describe be sure to justify your reasons, How would you allocate the $100,0...

How would you allocate the $100,000 bonus money and why? Remember, no 2 managers can get the same amount. Be sure to justify your reasons.

Explain why do firms engage in fdi, Why do firms engage in FDI when alterna...

Why do firms engage in FDI when alternatives such as exporting and licensing are available? How do location-specific advantages influence organisational decisions on FDI?

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