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Operations Management > Matching Supply and Demand > Flashcards

Matching Supply and Demand Flashcards

1
Q

Plan and Control

A

Planning and control is about matching supply and demand
One of the most difficult tasks in OM due to uncertainty about by
- Production or service systems (supply)
- Consumer behaviour (Demand)

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2
Q

Planning

A
  • What is intended to happen in the future?
  • Short, medium and long-term planning
  • No guarantee it will happen
  • Planning decisions include: capacity, loading, scheduling
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3
Q

Control

A
  • Keeping the operation to the plan
  • Day-to-day
  • Coping with uncertainty
  • Daily management of planning decisions

Long term planning: strategic, high level of aggregation
Medium term: partial disaggregation of demand forecasts
Short term: day to day, total disaggregation of demand forecasts

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4
Q

Dealing with uncertainty

A

Independent

  • external
  • varying degrees of uncertainty

Dependent

  • internal
  • no varying and can be calculated
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5
Q

How demand uncertainty can affect manufacturing/production strategy

  1. Very high uncertainty - resource to order
A
  • Uncertainty so high don’t attempt to anticipate and propose completely reactive process
  • Common with low volume and high variety
  • Actions triggered by request
  • High lead time

EG - Construction site, movie production

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6
Q

How demand uncertainty can affect manufacturing/production strategy

  1. Mid-Level uncertainty - make to order
A
  • Demand stable enough to invest in fixed transforming assets
  • Uncertainty is high enough to only produce when an order comes in
  • Common in high variety,

EG - fast food, car production

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7
Q

How demand uncertainty can affect manufacturing/production strategy

  1. Low uncertainty - make to stock
A
  • Demand is predictable enough to produce and stock
  • Common in high volume low variety
  • Speculative approach
  • Short lead time

EG - coca cola, clothes

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8
Q

Three main activities to planning

A

Loading

Sequencing

Scheduling

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9
Q

Loading

A
  • How much to be allocated to a work centre?
  • Difference between ‘max available time’ and ‘valuable operating time’

Finite loading and infinite loading

  • Is it suitable to limit the load
  • Is it necessary to limit the load
  • Is the cost of limiting the load prohibitive?
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10
Q

Sequencing

A 
In what order will the work be tackled once it's been allocated to a work centre?
Predetermined set of rules 
- Physical constraints 
- Customer priority 
- First in first out

Choice will depend on operation’s objectives

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11
Q

Scheduling

A

Timetabling ob jobs and tasks to be completed by each work centre

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12
Q

Control system

A

A control system can determine how the transformed resources move through the process
Push- make to stock
Pull - make to order

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13
Q

Capacity planning

A

Capacity: maximum level of value added activity over a period of time

Match up capacity with demand

Long term planning
Medium planning
Short term planning

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14
Q

Capacity planning

  1. Measuring capacity and demand
A
  • Design capacity is theoretical and can be viewed as the maximum capacity of the system
  • Effective capacity is what remains after time lost through set up changes; maintenance and technical difficulties are deducted
  • Further time may be lost through quality issues
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15
Q

Capacity planning

  1. Identifying alternative capacity plans
A

Consider different approaches to managing supply given the variation caused by demand

  • Level capacity plan
  • Chase demand plan
  • Demand management
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16
Q

Level Capacity plan

A

Capacity stays fixed despite fluctuations in demand
Suitable when Inventory can be accumulated

+ High process utilisation, high productivity

  • Highly speculative

Suitable for demand with low uncertainty, stackable products

17
Q

Chase demand plan

A

Capacity moves in an attempt to match or chase demand. Suitable when cannot be stored

+ No need for inventory and so less wasteful

  • Quite difficult to achieve

Suitable for demand with high uncertainty

18
Q

Demand Management

A

Capacity is fixed and demand changes around it

19
Q

Yield Management

A

Suitable for operations where

  • Capacity is relatively fixed
  • Market fairly segmented
  • Service cannot be stored
  • Service sold in advance
  • Over booking capacity
  • Price discounted at low demand

EG - Airline, Hotel

20
Q

Capacity planning

Step 3. Choosing a capacity planning approach

A

Depending on if we can stock items, we will either use

  • Cumulative capacity
  • Queuing system

Capacity as a queuing problem

  • Customers satisfied immediately or have to wait
  • Customers arrive and are processed accordingly to the same probability distribution

Operations Management (9 decks)

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