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

What are the disadvantages of ethical relativism, What are some of the adva...

What are some of the advantages and disadvantages of ethical relativism as an ethical philosophy for business managers? Do you agree with the basic "relativism" rationale justifyin

Discuss the relationship between companies and profit motive, Discuss the r...

Discuss the relationship between these four features of capitalism. Companies, profit motive, competition and private property.

Ramjee Somjee Dutt, After working for 30 years, Ramjee Somjee Dutt opted fo...

After working for 30 years, Ramjee Somjee Dutt opted for VRS and started a courier company and did very well in the first four years. He was now looking for expansion of his busine

Define fast food restaurant averages customers per hour, 1. A hospital emer...

1. A hospital emergency room averages 50 patients per shift. A shift is 8 hours long, and the average patient requires 20 minutes in the exam room. a. How many exam rooms should

Explain kudler fine food''s marketing strategy and tactics, Resources: Univ...

Resources: University Library, Kudler Fine Foods Virtual Organization Use the Virtual Organization link on the student website to access additional company information on Kudler

Describe the relevance of tqm, Explain the relevance of TQM in decision mak...

Explain the relevance of TQM in decision making and controlling processes.

Explain the differences unsecured credit and secured credit, Compare and co...

Compare and contract unsecured credit and secured credit, and explain the key differences. Provide an example for each.

Elements, what are the elements of production forecasting?

what are the elements of production forecasting?

Describe potential market share, From my experience, companies need to fact...

From my experience, companies need to factor in the competition and determine their market share. How might a company determine its potential market share?

Describe customer-contact matrix perspective, Describe a company of your ch...

Describe a company of your choice from the customer-contact matrix perspective. Discuss the operations of the organization from your perspective using the three elements of the cus

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