Lect 3 Om
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Lect 3 Om as PDF for free.
More details
- Words: 680
- Pages: 25
19 dec 07 HMF
WHAT IS OPERATIONS MANAGEMENT • System and Environment • It involves transforming inputs into a desired set of outputs • Managing the inputs, outputs and the transformation process forms the subject matter of operations management
What do Operations Managers do? • Within an operation first listing of main activities then operations manager must manage.
role demands planning decisions coordination systems
Operations as a system Demanding environment
Materials Labour Capital Information
Transformation (Conversion) Process
Boundary management
Energy
Boundary management
Technology
Feedback (information) control over process inputs & technology
Goods & Services
Operations Management Business strategy Operations Strategy Mission
Internal & external analysis
Distinctive Competence Objectives cost, quality, flexibility, delivery
Functional strategies: marketing, finance, engineering, staff & information systems
Policies: process, quality systems, capacity,& inventory
Consistent decisions
Results
ISSUES IN OPERATIONS MANAGEMENT • Strategic issues: example: location planning. • Tactical issues: example: annual production planning • Operational issues: example: daily machine scheduling.
LANDMARKS IN THE HISTORY OF OM • 1900s (F.W. Taylor) Scientific analysis to eliminate wasted effort from manual labour; Concept of Standard Time Std. Time = NT + Allowances x NT, where NT denotes the Normal Time Normal Time = Observed Time x Rating/100 (Assumption: Normal pace of working = 100)
LANDMARKS IN THE HISTORY OF OM cont. • 1910s (F.W. Harris) Concept of Economic Lot Size; Development of Economic Order Quantity (EOQ) Model for Inventory Control _______ EOQ = √2DA / IC D = Annual Demand (Units) A = Cost per Order (Rs) I = Inv. carrying charges factor (Rs/Rs/ yr) C = Cost per unit (Rs)
LANDMARKS IN THE HISTORY OF OM cont. Basis for EOQ Total annual cost = Annual ordering cost + Annual inv. carrying cost Annual ordering cost = DA/Q Annual inv. carrying cost = ½ QIC Total annual cost = DA/Q + ½ QIC
LANDMARKS IN THE HISTORY OF OM cont. • 1920s (Elton Mayo) Hawthorne Studies; Development of Human Relations Approach • 1930s (W Shewhart et al) Statistical Quality Control; (L.H.C Tippett) Work Sampling • 1940s (ORG & G.B.Dantzig) Formalization and Application of Operations Research as an approach to Manufacturing Problem Solving • 1950s Commercialization of Computers, giving boost to OR as an approach.
LANDMARKS IN THE HISTORY OF OM cont. • 3. 4. 5. 6. 7.
A BRIEF ON OR OR as an approach to Managerial Problem Solving involves: Defining the Decision Variables Articulating the Objectives and Constraints Formulate the Problem by expressing the above mathematically in terms of the Decision Variables Collect Data and Solve the Problem Validate the Model
LANDMARKS IN THE HISTORY OF OM cont. A BRIEF ON OR cont. • OR may be seen as comprising of two kinds of techniques: 3. Mathematical Programming where the objective is to get the best solution. e.g.. Linear Programming (LP), NLP etc., 4. Simulation where one pursues a “good solution” rather than the best solution in order to reflect more of reality in the model.
LANDMARKS IN THE HISTORY OF OM cont. EXAMPLE OF LP FORMULATION You have gone to Utopia where you find two kinds of gems, rubies and emeralds. Each ruby and emerald weighs 3kg and 2kg Respectively and fetches a value of Rs 4 and 3 crores, respectively. Your haversack can carry a maximum of 12 kg. Formulate the problem using OR.
LANDMARKS IN THE HISTORY OF OM cont. FORMULATION Step 1 Decision Variables: Let R= No. of rubies to be carried and E= No. of emeralds to be carried Step 2 Objective: Maximize the value to be Carried; Constraint: Capacity of Haversack Step 3: Formulate: Maximize (4R + 3E) subject to 3R + 2E ≤ 12 R,E ≥ 0
LANDMARKS IN THE HISTORY OF OM cont. • 1960s (Plossl, Wight, Orlicky) Widespread use of Computers in Business; Development of Material Requirement Planning (MRP), Manufacturing Resource Planning (MRPII) • 1970s (Skinner, Wheelwright et al) Manufacturing Strategy Paradigm • 1980s (Ohno, Shingo) Just in Time (JIT); (Goldratt) Theory of Constraints • 1990s Total Quality Management (TQM), Total Productive Maintenance (TPM), Enterprise Resource Management (ERP) • 2000s Supply Chain Management (SCM)
WHAT IS OPERATIONS MANAGEMENT • System and Environment • It involves transforming inputs into a desired set of outputs • Managing the inputs, outputs and the transformation process forms the subject matter of operations management
What do Operations Managers do? • Within an operation first listing of main activities then operations manager must manage.
role demands planning decisions coordination systems
Operations as a system Demanding environment
Materials Labour Capital Information
Transformation (Conversion) Process
Boundary management
Energy
Boundary management
Technology
Feedback (information) control over process inputs & technology
Goods & Services
Operations Management Business strategy Operations Strategy Mission
Internal & external analysis
Distinctive Competence Objectives cost, quality, flexibility, delivery
Functional strategies: marketing, finance, engineering, staff & information systems
Policies: process, quality systems, capacity,& inventory
Consistent decisions
Results
ISSUES IN OPERATIONS MANAGEMENT • Strategic issues: example: location planning. • Tactical issues: example: annual production planning • Operational issues: example: daily machine scheduling.
LANDMARKS IN THE HISTORY OF OM • 1900s (F.W. Taylor) Scientific analysis to eliminate wasted effort from manual labour; Concept of Standard Time Std. Time = NT + Allowances x NT, where NT denotes the Normal Time Normal Time = Observed Time x Rating/100 (Assumption: Normal pace of working = 100)
LANDMARKS IN THE HISTORY OF OM cont. • 1910s (F.W. Harris) Concept of Economic Lot Size; Development of Economic Order Quantity (EOQ) Model for Inventory Control _______ EOQ = √2DA / IC D = Annual Demand (Units) A = Cost per Order (Rs) I = Inv. carrying charges factor (Rs/Rs/ yr) C = Cost per unit (Rs)
LANDMARKS IN THE HISTORY OF OM cont. Basis for EOQ Total annual cost = Annual ordering cost + Annual inv. carrying cost Annual ordering cost = DA/Q Annual inv. carrying cost = ½ QIC Total annual cost = DA/Q + ½ QIC
LANDMARKS IN THE HISTORY OF OM cont. • 1920s (Elton Mayo) Hawthorne Studies; Development of Human Relations Approach • 1930s (W Shewhart et al) Statistical Quality Control; (L.H.C Tippett) Work Sampling • 1940s (ORG & G.B.Dantzig) Formalization and Application of Operations Research as an approach to Manufacturing Problem Solving • 1950s Commercialization of Computers, giving boost to OR as an approach.
LANDMARKS IN THE HISTORY OF OM cont. • 3. 4. 5. 6. 7.
A BRIEF ON OR OR as an approach to Managerial Problem Solving involves: Defining the Decision Variables Articulating the Objectives and Constraints Formulate the Problem by expressing the above mathematically in terms of the Decision Variables Collect Data and Solve the Problem Validate the Model
LANDMARKS IN THE HISTORY OF OM cont. A BRIEF ON OR cont. • OR may be seen as comprising of two kinds of techniques: 3. Mathematical Programming where the objective is to get the best solution. e.g.. Linear Programming (LP), NLP etc., 4. Simulation where one pursues a “good solution” rather than the best solution in order to reflect more of reality in the model.
LANDMARKS IN THE HISTORY OF OM cont. EXAMPLE OF LP FORMULATION You have gone to Utopia where you find two kinds of gems, rubies and emeralds. Each ruby and emerald weighs 3kg and 2kg Respectively and fetches a value of Rs 4 and 3 crores, respectively. Your haversack can carry a maximum of 12 kg. Formulate the problem using OR.
LANDMARKS IN THE HISTORY OF OM cont. FORMULATION Step 1 Decision Variables: Let R= No. of rubies to be carried and E= No. of emeralds to be carried Step 2 Objective: Maximize the value to be Carried; Constraint: Capacity of Haversack Step 3: Formulate: Maximize (4R + 3E) subject to 3R + 2E ≤ 12 R,E ≥ 0
LANDMARKS IN THE HISTORY OF OM cont. • 1960s (Plossl, Wight, Orlicky) Widespread use of Computers in Business; Development of Material Requirement Planning (MRP), Manufacturing Resource Planning (MRPII) • 1970s (Skinner, Wheelwright et al) Manufacturing Strategy Paradigm • 1980s (Ohno, Shingo) Just in Time (JIT); (Goldratt) Theory of Constraints • 1990s Total Quality Management (TQM), Total Productive Maintenance (TPM), Enterprise Resource Management (ERP) • 2000s Supply Chain Management (SCM)
