IE 505 PR ODUCTION PLANNING AND CONTR OL 1. In tro duction 1. In tro duction 1. Manufacturing/Pro duction F unction =) Resources W o rk ers Machines R...
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Lectures Notes
c For limited distrubution to IE 505 students All other rights reserved
IE 505 PRODUCTION PLANNING AND CONTROL
Rakesh Nagi Department of Industrial Engineering University at Bualo - State University of New York nagi@bualo.edu
IE 505 PRODUCTION PLANNING AND CONTROL
Course Outline
Introduction Overview of Production and Operations Strategy Forecasting Aggregate Planning Inventory Control (Known and Uncertain Demand) Supply Chain Management Materials Requirements Planning, Just-In-Time Operations Scheduling Project Scheduling Recent Advances
c Rakesh Nagi
University at Bualo - IE
1
PRODUCTION AND OPERATIONS STRATEGY
1. INTRODUCTION
IE 505 PRODUCTION PLANNING AND CONTROL
1. Introduction
1. Introduction
1. Manufacturing/Production Function =)
Raw materials
Resources Workers Machines =) Factory
Finished Goods
2. Functional areas of a rm 2.1. Marketing 2.2. Finance 2.3. Production 3. Dierence between manufacturing and production?
c Rakesh Nagi
University at Bualo - IE
4
IE 505 PRODUCTION PLANNING AND CONTROL
1. Introduction
1.A Problems in Production Management
Inventory Production Scheduling and Control Equipment Selection and Replacement Maintenance Size and Location of Plants Plant Layout and Structure Quality Control and Inspection TraÆc and Material Handling Methods
c Rakesh Nagi
University at Bualo - IE
5
IE 505 PRODUCTION PLANNING AND CONTROL
1. Introduction
NEED: US competitiveness; declining exports What has happened? Failure to recognize the size of competitive challenge
Failure to appreciate the impact of increasing manufacturing capacity in 60's capacity demand; now capacity > demand Failure to invest in R&D Top management's lack of manufacturing experience Production manager's obsession with short term performance measures P rofits ROI Investments =
c Rakesh Nagi
University at Bualo - IE
6
IE 505 PRODUCTION PLANNING AND CONTROL
1. Introduction
1.B Elements of Production and Operations Strategy
1. Time horizon:
Short Medium Long
2. Focus
Process Technologies Market Demands (Price, LT, reliability) Production Volume Quality Level
c Rakesh Nagi
University at Bualo - IE
7
IE 505 PRODUCTION PLANNING AND CONTROL
1. Introduction
Manufacturing tasks 3. Evaluation
Cost Quality Pro tability Customer Satisfaction
4. Consistency
Professionalism Product proliferation Manufacturing tasks should be made explicit
Buy from some outside source: c1=unit Internal production: c2=unit c2 < c1; Set-up or Investment cost $K to expand Cost for c1=unit products BUY c1x MAKE K + c2x
Annual increase in demand Time interval between addition of successive plants Annual discount rate(compounded continuosly) Cost of opening a plant of capacity y Total discounted costs over an 1 horizon; given that a plant opens at time 0 NPV of $1 incurred x years in future f (xD) + f (xD)e rx + f (xD)e 2rx + f (xD)[1 + e rx + e 2rx + ] f (xD) 1 e rx
f (y) = kya a : Indicator of Ratio of incremental to average cost of unit plant capacity a < 1; a = 0:6 in general k(xD)a C (x) = 1 e rx To nd x that minimizes C (x) set