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Milestone Developments in Operations Management • 1865-1900 Industrial Revolution, Growth of Railroads, • 1875-1925 Scientific Management Movement • 1925-1960 Human Relations Movement • 1940+ Operations Research • 1955+ Computers Characteristics of Operations Research • • • • • • OR approaches decision-making from a total systems perspective OR is interdisciplinary … uses diverse techniques to solve problems OR constructs models of the system to conduct experiments Model building and mathematical manipulation have been key to OR The primary focus is on decision making Computers are used extensively Operations research helps operations managers make decisions when problems are complex and when the cost of a wrong decision is high OR seeks to replace intuitive decision making for large complex problems with an approach that identifies the optimal, or best alternative through analysis. Use of Computers in OM • • • • Clerical Duties (payroll, billing, inventory, cost reports) Analysis of Operations (scheduling, project planning and control, LP) Manufacturing Planning and Control (forecasting, MRP, shop floor controls Computer-Integrated Manufacturing (robotics, bar coding, CAD/CAM, etc) Computer-Aided Design (CAD) Computer-Aided Manufacturing (CAM) Flexible Manufacturing Systems (FMS) Automated Storage and Retrieval Systems (ASRS) Productive Systems and Systems Theory Russell Ackoff SYSTEM -- An organized complex of interdependent components or subsystems designed to achieve objectives. When one subsystem is acted upon (by force), all the other parts of the system are affected to varying degrees. CLOSED SYSTEM -- A system that doesn’t interact with the external environment. Since internal operations are assumed independent of outside forces, operations can ignore the external environment. OPEN SYSTEM -- A system that has continuous action and reaction with its external environment. The system receives inputs from the external environment, converts the inputs in some way, and exports the outputs back to the external environment by sensing changes in their inputs or the demand for their outputs. SUBOPTIMALITY -- When optimization of one component or subsystem results in less than optimal performance in the larger system OM TOPICS WE WILL COVER • Decision Making in OM: the process and methods • Forecasting in OM: the starting point for all planning – Moving averages, smoothing, regression • Product service design & process planning • Allocating scarce resources to strategic alternatives – Linear programming, transportation, assignment • Long-range capacity planning and facility location • Facility Layout: Manufacturing and Services Queuing, simulation • Product Planning Systems: aggregate and master production scheduling • Inventory, Materials Management & Resource Report Planning – EOQ models, safety stock, MRP • Scheduling and Shop Floor Planning – Line balancing • Materials Management & Purchasing • Quality Control • Maintenance Management and Reliability STATISTICS REVIEW MEASURES OF LOCATION Mean Median Mode Percentile MEASURES OF DISPERSION Range Variance Standard Deviation PARAMETERS vs STATISTICS POPULATION MEAN VARIANCE STANDARD DEVIATION NUMBER SAMPLE
