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 acceptability and vulnerability, Describe the four options highligh...

Describe the four options highlighted in the case in terms of their feasibility, acceptability and vulnerability.

When good faith bargaining requires, Good faith bargaining requires the par...

Good faith bargaining requires the parties to come to an agreement about both mandatory and permissive items

Evaluate many supply chain strategy considerations, Evaluate various supply...

Evaluate various supply chain strategy considerations for managers moving products or services to the consumer.

Explain what are the three elements that require integration, What are the ...

What are the three elements that require integration to be successful in operations and supply chain management?

MAD & MAPE, Sales of vegetable dehydrators at Bud Banis'' discount departme...

Sales of vegetable dehydrators at Bud Banis'' discount department store in St. Louis over the past year are shown below. Management prepared a forecast using a combination of expon

Explain ethical problems and increase of competitive, Can someone give me s...

Can someone give me some ideas of how to implement a turnaround strategy for a United Way due to the fact that they have some ethical problems and increase of competitive.

Valuate the production quantity, Using the data, suppose the manufacturer h...

Using the data, suppose the manufacturer has an inflated demand forecast as follows: Quantity Probability 2,200 5% 2,300 6% 2,400 10% 2,500 17% 2,600 30% 2,700

Explain barriers to advancement opportunities for women, What are some of t...

What are some of the barriers to advancement opportunities for women and minorities in many organizations?

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