Operations Management Principles Essay Example | Topics and Well Written Essays - 1000 words

Operations Management Principles - Essay Example This essay explores the old Economic Order Quantities. I think it is an issue because old data about EOQs do not reflect the current state of affairs. The Economic Order Quantity model (EOQ) is a mathematical model for deriving the optimal purchase quantity. The EOQ model seeks to minimize total carrying and ordering costs by balancing purchase costs, ordering costs, carrying costs and stockout costs. In order to compute the economic order quantity, the supervisor needs the following information: forecasted demand during a period, cost of placing the order, that value of the purchase price, and the carrying cost for maintaining the total inventory. The fourth problem is the impossibility to engage trained or trainable temporary workers. I think it is associated with a lack of process planning and therefore should be solved in connection with it. I think that the plan must consist of strategic decisions that are made typically over a longer time horizon. These are closely linked to th e corporate strategy and guide supply chain policies from a design perspective. (Ganeshan & Harrison, 1995) The strategy includes the development of a management information system that will store the data about the company’s activity and help to make operational decisions. Management information systems (MIS) are information systems, typically computer-based, that are used within an organization. A management information system may be defined as "a system that collects and processes data (information) and provides it to managers at all levels that use it for decision making, planning, program implementation, and control." An information system is comprised of all the components that collect, manipulate, and disseminate data or information. It usually includes hardware, software, people, communications systems such as telephone lines, and the data itself. The activities involved include inputting data, processing of data into information, storage of data and information, and the production of outputs such as management reports. (Management information system from Wikipedia, 2006) A standard is any guideline established as the basis for measurement. It is a precise, explicit statement of expected results from a product, service, machine, individual, or organizational unit. It is usually expressed numerically and is set for quality, quantity, and time. Tolerance is a permissible deviation from the standard. (Allen, 1998) A set of controls should be developed. Time controls relate to deadlines and time constraints. Material controls relate to inventory and material-yield controls. Equipment controls are built into the machinery, imposed on the operator to protect the equipment or the process. Cost controls help ensure cost standards are met. Employee performance controls focus on the actions and behaviors of individuals and groups of employees. Examples include absences, tardiness, accidents, quality, and quantity of work. Budgets control cost or expense r elated standards. Financial controls facilitate achieving the organization's profit motive. One method of financial controls budgets.