Operations Management Lecture Notes PDF

MGT 303: Operations Management 1.​ Upper-Management Processes -​ Govern the operation of the entire organization -​ Organ...

MGT 303: Operations Management 1.​ Upper-Management Processes -​ Govern the operation of the entire organization -​ Organizational governance and Organizational OPERATIONS strategy -​ Part of Business Organizations responsible for providing goods or services -​ Conceptualize everything -​ System of processes -​ Used supply chain management (a)​ Supply Chain -​ Involved in producing and delivering a good or services -​ Process of flow (b)​ Logistics -​ Process of transportation from one place to another 2.​ Operational Processes 3 BASIC FUNCTIONS OF ORGANIZATION -​ Core process that make up the value of stream 1.​ FINANCE (production/services) 2.​ OPERATIONS 3.​ Supporting Processes 3.​ MARKETING -​ Support the core processes PROCESS MANAGEMENT OPERATIONS DECISION-MAKING -​ Organize way to achieve what you want to achieve -​ Management as a science or based on scientific characterized -​ A procedure or a Method by: 1.​ Organized principle of knowledge PROCESS 2.​ Use of empirical data or mathematical computations -​ One or more actions that transform inputs into outputs 3.​ Systematic Analysis of data 4.​ Repeatable results CHARACTERISTICS OF DECISION-MAKING: -​ Operations decisions range from single judgement to RISK AND UNCERTAINTY METHODS complex analysis, which also involves judgement. -​ Information about the decision variables or the outcome is probabilistic THE APPROPRIATENESS OF A GIVEN TYPE OF ANALYSIS DEPENDS ON: Useful Approach: -​ Significant or long lasting decisions 1.​ Statistical Analysis -​ Time availability and the costs of analysis and -​ Either objective or subjective with the use of -​ Degree of complexity of the decision probability and probability decision. -​ Will use sample size FRAMEWORK OF DECISION-MAKING: -​ Analytical and Scientific framework for decision implies the TECHNIQUES USED FOR following systematic steps: DECISION-MAKING: 1.​ Defining the problem 1.​ Hypothesis 2.​ Establish the decision criteria 2.​ Statistics 3.​ Formulation of a model 3.​ Decision Theory 4.​ Generating alternatives 4.​ Correlation and Regression 5.​ Evaluation of the alternatives 5.​ Technique for forecasting 6.​ Implementation and monitoring 6.​ Analysis of Variance (ANOVA) DECISION METHODOLOGY 2. Queuing Theory -​ Kind and amount of information available helps to determine -​ Analysis of queues in terms of waiting-time length which analytical methods are most appropriate for modeling and mean waiting time is useful in analyzing service a given decision. systems, maintenance activities, and shop floor control activities. 3. Simulation -​ Possible happenings in the future -​ Duplicates the essence of an activity or series of action. “Ignorance of the law excuses no one” 4. Heuristic Method  -​ Involve set of rules, which facilitate solutions of ​ (4) POSSIBLE DECISION CRITERIA: scheduling, layout and distribution problems when 1.​ Maximin applied in a consistent manner. -​ Determine the worst possible pay-off for -​ Manifest solution for a particular problem each alternative, and choose the alternative that has the “best worst” HEURISTIC TECHNIQUES: -​ Pessimistic approach 1.​ Network Analysis Techniques -​ The actual outcome establishes a -​ Network approaches include “guaranteed minimum” decision trees, CPM and PERT 2.​ Maximax Methods. -​ Determine the best possible pay-off. Choose -​ It is helpful in identifying the alternative with that pay-off. alternative courses of action and -​ Best out of the best controlling the project activities. -​ Optimistic approach, “Go for it” -​ Process of making or choosing a 3.​ Laplace decisions -​ Determine the best average pay-off for each -​ CPM AND PERT methods alternative and choose the best average. determine the fastest way to finish a -​ Treats the state of nature as equally likely project 4.​ Minimax Regret 2.​ Utility Theory -​ Determine the worst regret for each -​ Also called as Preference Theory alternative, and choose the “best worst” -​ Allows decision-makers to -​ Seeks to minimize the different between the incorporate their own experiences pay-off that is realized and the best pay-off and values into a relatively for each state of nature formalized decision structure DECISION-MAKING UNDER UNCERTAINTY EXTREME UNCERTAINTY METHODS -​ No information is available on how likely the various states -​ No information is available to assess the likelihood of of nature are under those conditions. alternative outcomes. STRATEGIES: 1.​ Game Theory -​ Helps decision-makers to choose course of action when there is no information available about what conditions will prevail 2.​ Coin flip -​ Sometimes used in situations where the decision makers are wholly indifferent.