Sensitivity Analyses folow the utes of milling, 5 minutes for inspection, and 10
ID: 367800 • Letter: S
Question
Sensitivity Analyses folow the utes of milling, 5 minutes for inspection, and 10 minutes of drilling which all follow the same three-step process. consisting of millia A small firm makes three similar products, ofne inspection, and drilling Product A requires 12 minutes of millie three-step pr ion, and drilling Product A requires 12 inspection, and 8 minutes of drilling per unit, and per unit, product B requires 10 minutes of milling, 4 minutes for in ires 8 minutes of milling. 4 minutes for inspection, and 16 minutes of drilling rS for ringrent has 20 contributes $2.40 per unit to profit, B contributes $2.50 per unit, and C contriut maximize profit. hours available during the next period for milling, 15 hours for inspect es $2.50 per unit, and C contributes $2.5 per unit. The aim is to The computer solution of the problem is provided below Variable Cellsto Final Reduced Objective Allowable Allowable Coefficient Increase Decrease Value Cost Name 24 0.620833333 Cell SCS2 XI SDS2 X2 SES2 X3 E 30 0 -0.620833333 5 0625 0 5321428 so 50 0 Final Shadow Constraint Allowable Allowable Decreast Constraints R.H. Side Increase Cell NameValuePrice SBS6 Milling LHS sns7 Inspection l.Hs 1520 SBS8 Drilling LHS 600 IE+30 960 480 1200 0.208333333 0 1200 900 1440 380 480 1440 0052083333 a. Fermulate the LP model? b. A new competitor entered the market providing product B with a competitive price, the manager decided to If the manager wants to produce product A, what change should be made to the objective function? d. Calculate the range of optimality of product C and interpret the result e. If the cost of product B increased by 0.25 and cost of product C decreased by 0.20? What is the effect on the decrease the profit contribution of product B by $0.4 What is the effect of the manager decision? optimal solution? f. Are there any non-binding constraints? Does it have a slack or surplus? Explain? R g Calculate the range of fcasibility for drilling and interpret the result. h. Would you recommend increasing the capacity of milling time by I hour? Explain i. Would you recommend increasing the capacity of drilling time by 2 hours, knowing that the drilling increa per hour will cost the firm $4? Explain? j If you would either increase the drilling time or the milling time by 1 5 hour, which you will select? Why I. Will you recommend decreasing the inspection time by 7 hours, knowing that every hour decrease in the m. If you still want to consider the money saving by decreasing the inspection time "refer to part 1 what is n. The manager would like to make sure that the number of Product B produced not exceed 80% of the tota The milling time is to be decreased by 2 hours and Drilling time to be increased by 5 hours, what is the ef on the objective function? inspection will save the company S!? best decision? units produced?Explanation / Answer
OPERATIONS MANAGEMENT :
The set of interrelated management activities which are involved in manufacturing certain products is called as production management.If the same concept is extended to service management, then the corresponding set of management activities is called as operation management.
Thus operation management is the process which combines and transforms various resources used in operation subsystem in the organisation into value added product/services in the controlled manner as per the policies of the organisation.Thus JOSEPH G. MONKS defines operation mangement as a process whereby resources flowing within a defines system are combined and transformed by a controlled manner to add value in accordance to the policies communicated by management.
OBJECTIVES OF OPERATION MANAGEMENT:
It can be categorised into
CUSTOMER SERVICE
RESOURCE UTILISATION
The first objective of operating systems is to utilize resources for the satisfaction of customer wants. Therefore, customer service is a key objective of operations management. The operating system must provide something to a specification, which can satisfy the customer in terms of cost and timing. Thus, providing the ‘right thing at a right price at the right time’ can satisfy primary objective.The aspects of customer service – specification, cost and timing are the principal sources of customer satisfaction and must therefore be the principal dimension of the customer service objective for operations managers.
RESOURCE UTILISATION
Another major objective of operating systems is to utilize resources for the satisfaction of customer wants effectively. Customer service must be provided with the achievement of effective operations through efficient use of resources. Inefficient use of resources or inadequate customer service leads to commercial failure of an operating system. Operations management is concerned essentially with the utilisation of resources, i.e. obtaining maximum effect from resources or minimising their loss, under utilisation or waste. The extent of the utilisation of the resources’ potential might be expressed in terms of the proportion of available time used or occupied, space utilisation, levels of activity, etc. Each measure indicates the extent to which the potential or capacity of such resources is utilised. This is referred as the objective of resource utilisation.
SCOPE OF OPERATION MANAGEMENT
Following are the activities which are listed under operation and production managment:
location of facilities
plant layout and material handling
product design
process design
production and planning control
quality control
material management
KEY CONCEPTS OF OPERATION MAMANGENT:
1. Using operation to compete
this will be used to analyse various operation of the organisation and could be used as a competitive weapon.
2.Managing process
it includes
Process Strategy and Analysis- One feature of this approach that is crucial to competitiveness is market-based view of strategic planning. It suggests that any strategic business unit of a company operates in the context of its corporate resources, the general and competitive industry environment, and the specific corporate goals of the company. In any area in which the company chooses to compete is a set of specific market-based criteria for success. A low-cost, high productivity operation makes efficiency possible. Minimum use of scarce resources while sustaining high outputs is the key to productivity. Effectiveness is how well a company is able to meet specific criteria such as delivery schedules and technical capability
SIX SIGMA PROGRAMME- Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service
WAITING LINES
Total quality management- it seeks to improve the quality of firm's goods and services. it mainly stress that all the activities be directed to its goals.
QUALITY CONTROL- Quality Control may be defined as ‘a system that is used to maintain a desired level of quality in a product or service’. It is a systematic control of various factors that affect the quality of the product. Quality Control aims at prevention of defects at the source, relies on effective feedback system and corrective action procedure. Quality Control can also be defined as ‘that Industrial Management technique by means of which product of uniform acceptable quality is manufactured’. It is the entire collection of activities, which ensures that the operation will produce the optimum quality products at minimum cost. The main objectives of Quality Control are:
1. To improve the companies income by making the production more acceptable to the customers i.e. by providing longlife, greater usefulness, maintainability, etc.
2. To reduce companies cost through reduction of losses due to defects.
3. To achieve interchangeability of manufacture in large-scale production.
4. To produce optimal quality at reduced price.
5. To ensure satisfaction of customers with productions or services or high quality level, to build customer good will, confidence and reputation of manufacturer.
6. To make inspection prompt to ensure quality control.
7. To check the variation during manufacturing
PRODUCT DESIGN
A product’s design has tremendours impact on what materials and components would be used, which suppliers will be included, what machines or what type of processes will be used to manufacture it, where it will be stored, how it will be transported. Since a customer does not necessarily imply an already tied-up customer, but also a potential one, what and how will the general yet target customer community be informed depends upon what the design of the product is
STRATEGIC ROLE OF OPERATIONS:
The operations manager will make strategic decisions about the overall design of the operations system. A strategic decision is one that affects the business in the long term. For example, Finance manager Managing director Human resource manager Materials purchasing officer Production manager Quality manager Marketing manager Inventory manager Maintenance supervisor Operations manager Figure 1.2 Operations in a functional organisational structure. where the business chooses to make its products will affect the location of operations. Or from where will the business get its inputs. Will the business buy inputs and raw materials from a local supplier or look offshore and buy from another country? The strategic goals are to improve productivity, efficiency and quality of outputs. Strategic operational decisions will also need to fit the overall strategic goals and vision in the business plan and fit the changing business environment. Long-term decisions will cover three broad areas: • planning production and delivery • controls to manage quality • improving operations. Therefore, all strategic decisions will focus on lower costs to an industry benchmark through efficiency and producing a good or service that is different to and competitive against rivals in the market.
Thus basically 3 important strategic role of operations are
Implementing Be dependable
Operationalize strategy
Explain practicalities
Supporting Be appropriate
Understand strategy
Contribute to decisions
Driving Be innovative
Provide foundation of strategy
Develop long-term capabilities.
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