Ch01 p2 ppt
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The document discusses key concepts in operations management including decision making models, quantitative approaches, and trade-off analysis. It also covers systems approaches, limitations of models, and analysis of trade-offs between factors like inventory costs and customer service. Finally, it briefly outlines trends in business operations like globalization, supply chain management, and the use of information technology.
Ch01 p2 ppt
- 1. McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 11 Introduction to Operations Management
- 2. 1-2 Decision MakingDecision Making Models Quantitative approaches Analysis of trade-offs Systems approach
- 3. 1-3 ModelsModels A model is an abstraction of reality. – Physical – Schematic – Mathematical What are the pros and cons of models? Tradeoffs
- 4. 1-4 Models Are BeneficialModels Are Beneficial Easy to use, less expensive Require users to organize Increase understanding of the problem Enable “what if” questions Consistent tool for evaluation and standardized format Power of mathematics
- 5. 1-5 Limitations of ModelsLimitations of Models Quantitative information may be emphasized over qualitative Models may be incorrectly applied and results misinterpreted Nonqualified users may not comprehend the rules on how to use the model Use of models does not guarantee good decisions
- 6. 1-6 Quantitative ApproachesQuantitative Approaches • Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models
- 7. 1-7 Analysis of Trade-OffsAnalysis of Trade-Offs Decision on the amount of inventory to stock Increased cost of holding inventory Vs. Level of customer service
- 8. 1-8 Systems ApproachSystems Approach “The whole is greater than the sum of the parts.” SuboptimizationSuboptimization
- 9. 1-9 Pareto PhenomenonPareto Phenomenon • A few factors account for a high percentage of the occurrence of some event(s). • 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?
- 10. 1-10 Ethical IssuesEthical Issues Financial statements Worker safety Product safety Quality Environment Community Hiring/firing workers Closing facilities Worker’s rights
- 11. 1-11 Business Operations OverlapBusiness Operations Overlap Operations Finance Figure 1.5 Marketing
- 13. 1-13 Historical Evolution of OperationsHistorical Evolution of Operations ManagementManagement Industrial revolution (1770’s) Scientific management (1911) Mass production Interchangeable parts Division of labor Human relations movement (1920-60) Decision models (1915, 1960-70’s) Influence of Japanese manufacturers Table 1.7
- 14. 1-14 Trends in BusinessTrends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Outsourcing Agility Ethical behavior
- 15. 1-15 Management TechnologyManagement Technology Technology: The application of scientific discoveries to the development and improvement of goods and services Product and service technology Process technology Information technology
- 16. 1-16 Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product Supply ChainSimple Product Supply Chain Figure 1.7 Supply Chain: A sequence of activities And organizations involved in producing And delivering a good or service
- 17. 1-17 Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $0.15 Wheat transported to mill $0.08 $0.23 Mill produces flour $0.15 $0.38 Flour transported to baker $0.08 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $0.08 $1.08 Grocery store displays and sells bread $0.21 $1.29 Total Value-Added $1.29 A Supply Chain for BreadA Supply Chain for Bread
- 18. 1-18 Other Important TrendsOther Important Trends Ethical behavior Operations strategy Working with fewer resources Revenue management Process analysis and improvement Increased regulation and product liability Lean production