POMBA1

Page 1

Operations As A Basic Function OPERATIONS

MARKETING

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

FINANCE

Ch 1 - 5


ก ก • : ก ก ก !

! "!# $ % • ก : ก ! %$ &% ' • ก ก ' ( กก ' ( ก ก ' ( ( ก ' %


'#) ภŕ¸

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Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 2


Historical Events In POM • • • • • • •

Industrial Revolution Scientific Management Human Relations Management Science Quality Revolution Information Age Globalization

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 7


Historical Events In POM Industrial Revolution Steam engine Division of labor Interchangeable parts

1769 1776 1790

James Watt Adam Smith Eli Whitney

Scientific Management Principles Time / motion study Activity scheduling chart Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

1911 1911 1912

Frederick W. Taylor Frank & Lillian Gilbreth Henry Gant Ch 1 - 8


Human Relations Hawthorne studies Motivation theories

1930 1940s 1950s 1960s

Elton Mayo Abraham Maslow Frederick Hertzberg Douglas McGregor

Management Science Linear programming Digital computer Simulation, PERT/CPM, Waiting line theory MRP Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

1947 1951 1960

George Dantzig Remington Rand Research groups

1960s Joseph Orlicky, IBM Ch 1 - 9


Quality Revolution JIT TQM Reengineering

1970s Taiichi Ohno, Toyota 1980s W. Edwards Deming, Joseph Juran, et. al. 1990s Hammer, Champy

Information Age EDI, EFT, CIM Internet, World Wide Web

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

1970s Numerous 1980s individuals and 1990s companies 1990s Tim Berners-Lee

Ch 1 - 10


Globalization Worldwide markets and operations Supply chain management Electronic commerce Mass customization

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

1990s Numerous individuals and companies

Ch 1 - 11


Operations As The Technical Core

Operations

Workers

Finance

Personnel

Purchasing

Suppliers

Capital Markets, Stockholders

Marketing Customers

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 6


ภ/ ภ( ภภ# $-

INPUT

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ภŕ¸

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Transformation process

Feedback

OUTPUT

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Issues & Trends In Operations 1. Intense competition 2. Global markets, global sourcing, and global financing 3. Importance of strategy 4. Product variety and mass customization 5. More services Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 29


Issues & Trends In Operations 6. Emphasis on quality 7. Flexibility 8. Advances in technology 9. Worker involvement 10. Environmental and ethical concerns

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 30


ก ก =


ภภ(Productivity Measurement) ภ=

(Total Productivity) % && ' + )*' + +* ,


ภภ(Productivity Measurement) ภ, &-. '(Partial Productivity) ภ% && ' = (Labor Productivity)

ภ)*' = (Capital Productivity)

ภ+* , = (Material Productivity)

% && ' )*' +* ,


ภภ(Productivity Measurement) Years

Units produced Labour (man days) Raw materials(kg) Machine(hours) Total sales Profit

2000 1,250 800 300 750 10,000 1,400

2001 1,750 1,200 450 1,100 21,000 4,550


ภภ(Productivity Measurement) Years Units produced per man hour

2000

2001

1,250 800

= 1.56

1,750 1,200

= 1.46

Units produced per kg raw material 1,250 300

= 4.17

1,750 450

= 3.90

Units produced per machine hour

= 1.67

1,750 = 1.59 1,100

1,250 750


(OUTPUT) PRODUCT = NO&P Q กNR'S QUALITY = WX*YZ WNRS' COST = Q')*'\'ก DELIVERY = ก -.& O,P Q & SAFETY = X O Z \'ก )` & ' MORALE = N aก` &\ ENVIRONMENT = -Z % QO ETHIC = , Y


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MAN


ก 0 12 3 4 5 6789: ; < =>

PQC D

S M

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' # %!#ก ' # %-! #ก " # , ก ( $ " ) & " & # #!( $ ) ก %&*1 ก ก 23 % ' !1ก 24 % , -!ก " " ! Q C D F ก %&*1 ก


24 % % ! *

Cost Product cost Design Productivity Delivery Speed On -time JIT Supply chain Quality Recognition Product quality Flexibility Produce to Order JIT CAD CAM


ภ%&*1 ภภ, ! , ! ภ& ภ!ภ& Job to Order Low Volume Standardization High Volume Short Life cycle Long Life Cycle Introduction /Growth stage Maturity / Decline stage Customer focus Low cost Long time Delivery Short time Delivery


Strategic Planning Mission & Vision Voice of the Business

Marketing Strategy Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 2/e

Business Strategy

Operations Strategy

Voice of the Customer

Financial Strategy Ch 2 - 11


Organization Of Book Strategy of productive systems Designing productive systems Operating Productive systems

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 33


Strategy Of Productive Systems –1. Operations & competitiveness –2. Operations strategy –3. Quality management 70 60 50 40 30 20 10 0 0

©2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 2/e

1

2

3

4

5

6

7

Ch 1 - 34


Designing Productive Systems `4.ภภ0% !#$ % `5. ภภภภ`6.ภ' ( ภ' . `7. ภ`8. ภภŠ 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 35


Operating Productive Systems 9. ภ10 ภ$ ! 11 $ 12 ภภภ13 ภภ' ภ14 ภ! ภ15 ภ! !0- $" Š2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

Ch 1 - 36


Demand

Industry Life Cycle Model

Development

Growth

Maturity

Decline

Time User / buyer Few Competitive Few Conditions Demand : Supply D?

Growing Saturate Drop Entry Fight to maintain Some Exit Fight for share efficiency/low cost Selective distribution D>S D_>S D<S


Decision Analysis • i# & "# ภ!- 2 -! j ! *+ ! !#!

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!#=> ภ"!# $ % ' ( ภŠ 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

# ' ' ( ภ' ( ภ' ( ภ$! ' ( ภ?##@ C2 Supp - 2


, #

Schematic ภ$

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Physical

mathematical

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%# ภ(. E , ภภ$ 1. ภ'ภ0F% ( ภ! &% (Alternative acts or Strategies) 2. ภ' ( ?, ( $- ' !ภ0% ( Event or State of Nature) 3. 0 $ ภ( Payoff) 4. ภภ?#$ "!# $ % 5. ' ( ภ' ( ภภภ$ 'ภ0F% # ' Payoff Table Decision 1 2

States Of Nature a b Payoff 1a Payoff 1b Payoff 2a Payoff 2b


• States of nature – events that may occur in the future – decision maker is uncertain which state of nature will occur – decision maker has no control over the states of nature

A payoff is the outcome of the decision

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 3


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2 +%! 2

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Decision making Criteria Under Uncertainty • Maximax criterion – choose decision with the maximum of the maximum payoffs

• Maximin criterion – choose decision with the maximum of the minimum payoffs

• Minimax regret criterion – choose decision with the minimum of the maximum regrets for each alternative C2 Supp - 6


Decisionmaking Under Uncertainty Example States Of Nature

Decision Expand *, # " %ภŕ¸

Competitive Conditions $ 800,000 1,300,000 320,000

Competitive Conditions $ 500,000 -150,000 320,000

C2 Supp - 8


Maximax Solution "% % *, # " %ภŕ¸

$800,000 1,300,000 -- Maximum 320,000

Decision: *, #

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 9


Maximin Solution "% % *, # " %ภŕ¸

$500,000 -- Maximum -150,000 320,000

Decision: "% %

Š 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 10


Decision making With Probabilities • Risk involves assigning probabilities to states of nature • Expected value is a weighted average of decision outcomes in which each future state of nature is assigned a probability of occurrence

© 2000by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 14


Expected Value n EV( x) = ∑ p( xi) xi i=1 where xi = outcome i p( xi) = probability of outcome i

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 15


Expected Value Example 70% 1 ภ$ '#) , 30% 1 ภ$ '#) , ? EV , = $ 800,000 (0.70) + 500,000 (0.30) = $710,000 EV ? ?

= 1,300,000 (0.70) -150,000 (0.30) = 865,000 -- Maximum

EV , ภŕ¸

= 320,000 (0.70) + 320,000 (0.30) = 320,000

Decision: ? ?


Expected Value Of Perfect Information • The maximum value of perfect information to the decision maker • EVPI = (expected value given perfect information) - (expected value without perfect information)

© 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e

C2 Supp - 17


EVPI Example Good conditions will exist 70% of the time, choose maintain status quo with payoff of $1,300,000 Poor conditions will exist 30% of the time, choose expand with payoff of $500,000 Expected value given perfect information = $1,300,000 (0.70) + 500,000 (0.30) = $1,060,000 EVPI = $1,060,000 - 865,000 = $195,000


Sequential Decision Trees • A graphical method for analyzing decision situations that require a sequence of decisions over time • Decision tree consists of – Square nodes - indicating decision points – Circles nodes - indicating states of nature – Arcs - connecting nodes


Decision Tree Example 0.60

$2,000,000

Market growth

2 0.40 No market growth

Expand (-$800,000)

1

$225,000 Expand (-$800,000)

Market growth (3 years, $0 payoff)

Purchase Land (-$200,000)

Market $3,000,000 growth 0.80 6 0.20 No market growth

4 Sell land

0.60 3

Market growth

0.40

No market growth (3 years, $0 payoff)

Warehouse (-$600,000) 5 Sell land

$700,000

$2,300,000

0.30 7 $1,000,000 0.70 No market growth $210,000


Evaluations At Nodes Compute EV at nodes 6 & 7 EV(node 6) = 0.80($3,000,000) + 0.20($700,000) = $2,540,000 EV(node 6) = 0.30($2,300,000) + 0.70($1,000,000) = $1,390,000 Expected values written above nodes 6 & 7 Decision at node 4 is between $2,540,000 for Expand and $450,000 for Sell land Choose Expand Repeat expected value calculations and decisions at remaining nodes


Decision Tree Solution $1,290,000

$2,000,000 0.60

Market growth

2 0.40 No market growth

Expand (-$800,000)

$225,000 $2,540,000

$1,740,000 $1,160,000 Market growth (3 years, $0 payoff) Purchase Land 0.60 (-$200,000) 1

3

0.40

$1,360,000 No market growth (3 years, $0 payoff)

Expand (-$800,000)

0.80 6 0.20 No market growth

4 Sell land

$1,390,000 Warehouse $790,000 (-$600,000) 5 Sell land

Market $3,000,000 growth

Market growth

$700,000

$2,300,000

0.30 7 $1,000,000 0.70 No market growth $210,000


Decision Matrix

Decision Trees

- ภ*&ภj !

ภ24. * + ( ( #!

- ภj ! *+ +%

ภ24. *(+ ( #! !- %" k! #!


Break-ภb) Sales (Price = $18)

Sales (Price = $12)

Costs and Revenue ($)

900

Sales (Price = $7) Total Cost

700

500

300 Break-Even Points

100 10

30

50

70

Production in Units

90


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