www.izmirekonomi.edu.tr asst. prof. dr. mahmut ali gÖkÇe, izmir university of economics spring,...
TRANSCRIPT
Week 1
1www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
ISE 102 – Introduction to Systems Engineering
Asst. Prof. Dr. Mahmut Ali GÖKÇE
Faculty of Computer Sciences
Department of Industrial Systems Engineering
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
2 of 52
Course Contact Information
Instructor : Asst. Prof. Dr. Mahmut Ali GÖKÇEOffice : A-409Phone : 488 8465
Wednesday 15:30-16:30 Thursday 10:30-12:20 ( and by appointment)
[email protected] :Office Hours :
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
3 of 52
Course Contact Information (Cont.)Teaching Asistant:
Utku Guruşçu - Görkem Sarıyer
Email: [email protected] and [email protected]
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
4 of 52
Course Description An overview of design, analysis, operation and
control of industrial systems; systems analysis of industrial systems and their interactions with other systems in the enterprise; system dynamics analysis of complex interactions among the entities within and without the production system.
Prerequisites : None
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
5 of 52
Text Book(s) Main Textbook: Blanchard, B.S and Fabrycky W.J.,Systems
Engineering and Analysis, (4th ed.) : NJ Prentice Hall, 2006.
References Vollmann, T.E., W.L. Berry, and D.C. Whybark,
Manufacturing Planning and Control Systems, 4th edition, Irwin/McGraw-Hill, 1997.
Goldratt, E.M. J. Cox, The Goal - A Process of Ongoing Improvement, North River Press; 2nd Rev edition, 1992.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
6 of 52
Objectives After ISE 102, the students are expected to learn,
1. What Manufacturing Systems/Industrial Engineering is.
2. how to approach a decision making problem, how to model a problem and make abstractions.
3. to taste the complexity of real life problems and get insights from simple techniques.
4. obtaining familiarity with basic IE/SE terminology.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
7 of 52
Course Contents
In this course, we will discuss, some of the basic SE/IE problems and methodologies.
The following is the tentative list of the content of the course;
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
8 of 52
Course Contents - Problems Introduction to Systems and Engineering The System Design Process Forecasting Systems Design Alternatives and Models in Decision Making Models for Economic Evaluation Optimization in Design and Operations Queueing Theory and Analysis Reliability and Availability of Systems Inventory Planning in Production Systems Quality Planning and Assurance Project Management
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
9 of 52
Course Contents - Methods
Modelling and Graphical Techniques Mathematical and other Analytical Approches Computerized Algorithms and Simulation Queueing Analysis LP/IP/NLP and other Programming Models Probability and Statistics Economic Analysis Techniques
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
10 of 52
Course Grading/Evaluation
Attendance ( 5%) Assignments (10%) Midterm (35%) Final Exam (50%)
The final exam will be comprehensive and will cover the entire syllabus material.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
11 of 52
Class Information
Exams will be closed book & closed notes. The Final Exam will be given during the Final
Exam Week as scheduled by the university.
What is Expected From Students ? Class Attendance and Participation Significant Effort in Learning Materials Ask Challenging Questions Discuss Knowledge & Ideas with the Class Put Forth Best Effort on All Assignments
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
12 of 52
Late AssignmentsLate Assignments Assignments are due on the date and at the time
designated; otherwise, they are late. Unless the instructor has granted prior permission, late assignments turned in by 5:00 p.m. the day they are due will be graded for ½ credit.
DisclaimerThe instructor reserves the right, when necessary, to alter the grading policy, change examination dates, and modify the syllabus and course content. Modifications will be announced in class. Students are responsible for announced changes.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
13 of 52
Content
Business Organizations Key Functions Manufacturing Systems Manufacturing Systems Engineering Manufacturing vs. Service Operations Operations Management Supply Chain Management
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
14 of 52
Business Organizations
Organizations are formed to pursue goals that are achieved more efficiently by the concerted efforts of a group of people than by the individuals working alone.
Business organizations are devoted to producing good and/or providing services.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
15 of 52
What is Production?Production is the making of something new - either
tangible(products) or intangible (services).
Modes of Production Primary - Agriculture, cattle breeding, poultry, fishing,
mining, refining of metals (e.g., copper, iron, aluminum).
Secondary - Manufacturing, construction, energy generation.
Tertiary - Services (e.g., transportation, insurance, banking, education)
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
16 of 52
Factors of Production
Land - natural resources. Labour - human effort both physical and mental. Capital - financial resources and physical goods for
reproduction. Knowledge - becomes an increasingly larger
portion of the cost of goods, particularly of information goods; increasing emphasis on intellectual property rights.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
17 of 52
Key Functions of Business Organizations
Marketing
Operations
Finance
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
18 of 52
The operation function consist of all activities directly related to producing good and services.
Hence it exists both in manufacturing and assembly operations, which are goods-oriented and in areas such as health care, transportation, food handling and retailing which are primarily service- oriented
Operations
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
19 of 52
Manufacturing - A Narrow Definition
In a narrow sense, manufacturing is defined to be the purposeful transformation of raw materials through human labour and knowledge into products by a series of tool and energy applications, each of which aims at well defined changes in the physical, chemical, and biological characteristics of the materials.
Place: Factory / Workshop.
Organization: Manufacturing firm.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
20 of 52
Manufacturing - A Broader Definition*
Manufacturing can be defined as a series of interrelated activities and operations involving the design, material selection, planning, manufacturing process, quality assurance, management and marketing of the products of the manufacturing industries.
*International Institution for Production Engineering Research (CIRP)
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
21 of 52
Definition of a Manufacturing Process*External Disturbances
INP
UT
S
A Manufacturing Processis a complex arrangement
of physical elementscharacterized by measurable
parameters
Internal DisturbancesMaterial
Social-PoliticalEnvironment
Knowledge
Demand
Energy OU
TP
UT
S
Customer
Physical ElementsMachine ToolsToolsMat Handl. Equ.People
Measurable Parameters
e.g., Production Rate
Percent on Time Delivery
Manufacturing Lead Time
Defects per MillionUnit Cost
*Adapted from Parnaby and Black
Products
Service
Knowledge
Return
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
22 of 52
Production System - A Definition*
Production system is defined as an organization in the industrial sector for the creation of manufacturing goods and commodities and/or providing services.
*International Institution for Production Engineering Research (CIRP)
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
23 of 52
Manufacturing System - A Definition*
Manufacturing system can be viewed as an integrated combination of processes, machine systems, people, organizational structures, information flows, control systems and computers, designed and operated in order to properly support a coherent manufacturing strategy.
*B. Wu, Manufacturing Systems Design and Analysis, Chapman
& Hall, 1992.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
24 of 52
Flows in Manufacturing Systems
One distinguishes between three different types of flows in manufacturing systems:
Material.
Information.
Cost.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
25 of 52
Flows in Manufacturing Systems
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
26 of 52
Material Flows in Manufacturing Systems
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
27 of 52
Information Flows in Manufacturing Processes
Information flow can be conceived of flowing from the beginning to the end of the manufacturing process and vice versa. According to the direction, these approaches are called push system and pull system respectively. Push systems are based on a forecast generated at the outset of the production plan. The plan drives the production through issuing work orders for various stages of production. In pull systems, customer demands for the end products pull the component and materials through the system.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
28 of 52
Flow of Costs in Manufacturing SystemsCost Classification:
Direct labour cost (Direct labour is the labour of those people who work, either with machines or hand tools directly on the materials converted into finished products)
Direct material cost (Direct material are the commodities that enter directly into and become a part of the finished product)
Overhead costs Indirect labour and material cost Rent on land, equipment and building Maintenance and repairs to buildings and equipment Taxes on plant, equipment, material, inventory Taxes on all wages and salaries of the personnel Insurance on all personnel and physical facilities Depreciation on plant and equipment, etc.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
29 of 52
Manufacturing Systems Engineering
Manufacturing systems engineering is a methodology which is associated with the optimum design, analysis, operation and control of manufacturing systems.
It fosters an understanding of the whole manufacturing process and studies it as a system in order to fulfil the objective(s) of the company.It incorporates the new manufacturing technologies and methodologies into manufacturing so that manufacturing systems can efficiently support the manufacturing strategy of the company.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
30 of 52
The operation function consist of all activities directly related to producing good and services.
Hence it exists both in manufacturing and assembly operations, which are goods-oriented and in areas such as health care, transportation, food handling and retailing which are primarily service- oriented
Recall Operations…
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
31 of 52
Buys some components from suppliers, do some fabrication and assembles bicycles and sells through a network to customers;
Key management tasks include; Deciding the style of bicycles Where to locate the facilities Make or buy decisions Ordering parts and materials Forecasts and determine how much to produce? Scheduling the production When and how to maintain the equipments,tools, etc. Pricing.
Manufactures goods!
Think about a bicycle factory…
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
32 of 52
Consists of airplanes, airport facilities, maintenance facilities,
Key management tasks include; Where to locate the facilities Lease or buy airplanes Manage the inventory of foods, beverages, and parts of
planes Forecasts seat demand and determine required capacity Scheduling flight crew and airplanes Maintain the facilities etc. Pricing.
Provides services…
What About an Airline company?
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
33 of 52
…operations are common for both manufacturing and service companies.
The problems are similar, You either schedule flight crew or your machinery You route the planes or trucks those carries finished goods Decide the price of the seat for a specific flight or the
bicycles you produce Decide to rent a plane or outsource some of your parts
from your supplier Decide how much “coke” you have to keep at each airport
facilities, or how much bicycles at which warehouse Etc.
Either goods or services…
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
34 of 52
Steel productionAutomobile fabrication
House buildingRoad construction
DressmakingFarming
Auto RepairAppliance repair
Maid ServiceManual car wash
TeachingLawn mowing
Low service contentHigh goods content
High service contentLow goods content
Increasinggoods content Increasing
service content
Good-Service Continuum
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
35 of 52
Manufacturing vs. Services
They are similar often in terms of what is done but they are different in terms of how it is done. E.g. there is often more customer contact for
service organizations then manufacturing ones
Read the differences between two types of organizations from the text book or other sources.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
36 of 52
Recall Business Organizations Business organizations are devoted to producing
good and/or providing services. Three basic functions are Operations-Marketing-
Finance The focus of this course is Operations. We have just seen that either the organization
produces goods or services the operations are similar.
In ISE program of FCS at IEU, we study how to make good decisions that aims to manage optimally the operations of all kinds of organizations with respect to the objectives of the firms.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
37 of 52
Some Definitions: Objectives of a Firm
Firms are established to create value for all its stakeholders. Shareholders of the firm, personnel of the firm, companies and individuals doing business with the firm, customers, society directly affected and society at large constitute the stakeholders of the company.
Firm Objectives Profit objective. Social objective.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
38 of 52
Some Definitions: Objectives of a Firm Profit objective. Profit is defined here as the
difference between the revenue and the expenses of a firm before taxes and investment. Profit is needed by a firm for its stability and survivability. It provides the firm with the necessary resources to redefine itself.
Social objective. A firm should also try to contribute to the welfare of the society. This is particularly expected from a firm of a reasonable size. A firm cannot exist in isolation from the society in which it operates. Thus, social objectives are related to the long term survivability of the firm.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
39 of 52
How to Measure Added Value?The added value* generated by a manufacturing firm is defined as the difference between the output and the input, where:
Input: The value of input is calculated by subtracting the total value of stock of material and fuel at the end of the year and goods purchased to be resold without any further processing from the total value of purchases of goods and services, and stock of material, and fuel at the beginning of the year.
Output: The value of output is calculated by subtracting the total value of stock of trade goods at the beginning of the year and goods purchased to be resold without any further processing from the total value of sales of goods and services, stock of trade goods at the end of the year and production value of fixed assets produced by the firm’s own staff.
* State Institute of Statistics, Turkey
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
40 of 52
Some Definitions: ProductivityProductivity is defined as the ratio of output to input.
Kinds of Productivity: Factor productivity (output is related to one of the
resources of production, such as labour, capital, land, raw material, etc.)
Total factor productivity (an overall measure expressing the contribution of the resources of production to the efficiency attained by a firm.)
Both types of productivity can be expressed as physical productivity with output being measured in physical units and as well as value productivity with output being measured in monetary units.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
41 of 52
Added Value at Operational LevelThe aim of the business organization should
be to add value at each component of the production system. All non-value adding operations need to be carefully screened and eliminated. A non-value adding operation is an operation that does not add value directly transferable to the customer, i.e., if it is eliminated, the benefit accrued by the customer from the product does not diminish.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
42 of 52
What is Operations Management?
Operations Management – the design, operation, and improvement of the production systems that create the firm’s products or services
operations management is primarily concerned with transformation processes:
Inputs Transformation Processes Outputs
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
43 of 52
Recall the Value Adding Process
Value Adding (Transformation)
Process
Value Adding (Transformation)
Process
ProductProduct
ServiceService
WorkforceWorkforce
KnowledgeKnowledge
CapitalCapital
MaterialMaterial
InputsOutputs
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
44 of 52
Examples of OM Decisions Intel needs to construct a new fabrication plant
to produce its next generation of computer chips. Where should it build the facility? What should the capacity of the facility be?
United Airlines needs to allocate resources to meet all of its customer demand for air travel next month. How should it assign different-sized aircraft to flight
routes? How should it assign crews to flights while adhering
to government regulations and union agreements? How should it schedule aircraft maintenance?
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
45 of 52
Examples of OM Decisions
Charter Cable needs to plan tomorrow’s service visits. Which customers will get serviced? How should customer site visits be
assigned to service personnel?
All decisions in operations management involve trade-offs.
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
46 of 52
Decision Making
System Design–capacity– location–arrangement of departments–product and service planning–acquisition and placement of
equipment
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
47 of 52
Decision Making
System operation– personnel– inventory– scheduling– project
management– quality assurance
Note that in most cases system design determines the system operations parameters! Hence system design decisions are crucial and vital
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
48 of 52
Responsibilities of Operations Management
Products & services
Planning– Capacity– Location–– Make or buy– Layout– Projects– Scheduling
Controlling– Inventory– Quality
Organizing– Degree of centralization– Subcontracting
Staffing– Hiring/laying off– Use of Overtime
Directing– Incentive plans– Issuance of work orders– Job assignments
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
49 of 52
Typical operations performance measures
Profit Cost Productivity Quality Delivery Customer service
tradeoffs
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
50 of 52
Business Operations Reference Model
Source Make Deliver
Plan
Material FlowInformation Flow Funds Flow
Suppl
ier
Cus
t
ome
r
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
51 of 52
Systems of Processes
Operations management involves making decisions about the entities and activities within systems of processes
Beyond the central transformation process, a business can be seen as a collection of processes to be designed, managed, and improved
Furthermore there is the concept of Supply Chain Management…
Week 1 www.izmirekonomi.edu.tr
Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics
SpringSpring, 2007, 2007
52 of 52
A Supply Chain Example
Material, Information and Funds FlowMaterial, Information and Funds Flow
Raw Material and Semi-Finished Products Suppliers
ConsumersManufacturing Centres
Distributors and Warehouses