Operations management
Inhoudsopgave
Introduction to operations management ........................................................................................ 3
Operations management ..................................................................................................................3
Basic terminology ........................................................................................................................3
A little bit of history ......................................................................................................................5
Operations Strategy .........................................................................................................................8
Levels of decision making ............................................................................................................8
Production environments .............................................................................................................9
Manufacturing planning and control systems ................................................................................... 12
Closely related fields ..................................................................................................................... 14
Supply Chain Management ........................................................................................................ 15
Operations Research ................................................................................................................. 16
Inventory management ................................................................................................................16
Introduction and definitions ............................................................................................................ 16
Inventory management under a continuous review policy ................................................................. 18
The economic order quantity ...................................................................................................... 18
The reorder point ....................................................................................................................... 20
EOQ with production ................................................................................................................. 22
Inventory management under a periodic review policy ..................................................................... 23
To practice .................................................................................................................................... 25
Recap and wrapping up .................................................................................................................. 26
Master production schedule ........................................................................................................26
Aggregate production planning ....................................................................................................... 27
Balancing supply and demand ................................................................................................... 27
Basic strategies of the aggregate planner .................................................................................... 30
Master Production Schedule .......................................................................................................... 35
Exercises ....................................................................................................................................... 40
Material Requirements Planning ..................................................................................................41
Bill of materials .............................................................................................................................. 42
The MRP process ........................................................................................................................... 43
Lot-sizing techniques ..................................................................................................................... 45
Lot-4-lot policy .......................................................................................................................... 45
Fixed Order Quantity policy ........................................................................................................ 46
Fixed Period Ordering policy ....................................................................................................... 48
Part period balancing ................................................................................................................. 50
The Silver-Meal heuristic ............................................................................................................ 52
Moving through the bill of materials ................................................................................................. 54
Concluding remarks....................................................................................................................... 56
Exercise ........................................................................................................................................ 56
1
,Facility layout and Job Shop Scheduling .......................................................................................57
Facility layout ................................................................................................................................ 57
Job Shop ................................................................................................................................... 58
Batch Shop ............................................................................................................................... 59
Flow Shop ................................................................................................................................. 60
Process type selection ............................................................................................................... 61
Job Shop Scheduling ...................................................................................................................... 62
Johnson’s rule ........................................................................................................................... 62
General Job-Shop Scheduling problem ....................................................................................... 64
Earliest start time schedule generation ....................................................................................... 67
Other priority rules ..................................................................................................................... 70
Facility layout and assembly line balancing ..................................................................................71
Facility layout – recap ..................................................................................................................... 71
Process type selection ............................................................................................................... 72
Assembly line balancing ................................................................................................................. 72
Exercise ........................................................................................................................................ 81
Routing .......................................................................................................................................82
Networks and graphs ..................................................................................................................... 82
Simple/multi-graph .................................................................................................................... 82
Incomplete/complete graph ....................................................................................................... 83
Weigthed/non-weighted graph.................................................................................................... 83
Walk, trails, circuits, paths and cycles ........................................................................................ 83
The shortest path problem.............................................................................................................. 85
Dijkstra’s shortest path algorithm ............................................................................................... 86
The A* algorithm ........................................................................................................................ 89
LP formulation for the shortest path problem .............................................................................. 89
The travelling salesman problem (TSP) ............................................................................................ 90
Exercise .................................................................................................................................... 93
LP formulation for the travelling salesman problem ..................................................................... 93
Sub-tour elimination constraints ................................................................................................ 94
The vehicle routing problem (VRP) ................................................................................................... 94
A nearest neighbour heuristic for the VRP .................................................................................... 96
The Clarke-Wright savings algorithm ........................................................................................... 98
2
,Introduction to operations management
Operations management
Voorbeeld
- Wachttijd
o Wachten op levering leveranciers (onzekerheid)
- Veiligheidsvoorraad
o Deel aanhouden voor stel leverancier komt te laat of er is meer vraag dan
verwacht
- Grote product variabiliteit
o Personaliseren van fiets
o Complexer productieproces
o Informatie nodig klanten
o Flexibiliteit inbouwen om aan variabiliteit te voldoen
- Balanceren workload
o Toewijzen operaties aan verschillende werkstations
- Opslag
Basic terminology
Operations management
- The process of designing, planning, coordinating and controlling all activities related
to the production and delivery of goods and services
- The focus is on the actual core business of an organization (we often talk about the
‘operations’)
- Concerns the optimal usage a deployment of inputs (including raw materials, labor,
capital, information, customers with a specific need, ...) when satisfying customer
demand
- Department in een bedrijf, mensen die core business idee doen
o Maken product, produceren het, leveren service
o Alle departemten errond zijn ondersteunde departementen om operations zo
goed mogelijk te laten verlopen (sales, marketing)
Question: In how many of these businesses does Operations Management play an important
role?
- All 4
Good versus service
Good Service
- Physical object / tangible asset - Intangible asset
- Ownership is clearly defined (and - There is typically no transfer of
can be transferred) ownership
- Can be kept in storage - Cannot be stored
3
, - Little to none interaction with the - Often in interaction with the
end customer customer
- There is no strict separation between goods and services
Products are typically positioned on a continuum, acknowledging that they consist of
a blend of both goods and services
- Product
o Waar product is, wie het vast heeft is duidelijk
o Ergens leggen en het erna weer ophalen
o Geen interactie met klant nodig om product te verkopen, klant kan het zien in
winkel
- Service
o Minder tastbaar
o Naar concert gaan, kan je niet opslaan
o Bepaalde beveling tussen producent en klant
o Moeilijk vasthouden
o Afhankelijk van interactie tussen maker/producent/beheerder en klant
- Suiker: niet geïnteresseerd in after sale service
- Auto: fysiek product, maar ook met aantal services
o Onderhoud, after sales service
- Restaurant: niet enkel over eten, ook geïnteresseerd in service erbij
o Niet kunnen vasthouden, maar wel deel van product dat je hebt gekocht
vanavond
- Legal advice, hoorcollege
o Papier krijgen
o Gaat over interactie en services
The transformation process
- Transformation of inputs (energy) to outputs (good or service a client wants to buy)
- Feedback: output show what needed input it
o Interest of clients
o Bepalen welke inputs nodig zijn
- Transformatieproces heel ruimt zien
o Fysische karakteristieken van material veranderen
o Producten van plaats veranderd (andere locatie gekregen)
o Ownership geëindigd
4
Inhoudsopgave
Introduction to operations management ........................................................................................ 3
Operations management ..................................................................................................................3
Basic terminology ........................................................................................................................3
A little bit of history ......................................................................................................................5
Operations Strategy .........................................................................................................................8
Levels of decision making ............................................................................................................8
Production environments .............................................................................................................9
Manufacturing planning and control systems ................................................................................... 12
Closely related fields ..................................................................................................................... 14
Supply Chain Management ........................................................................................................ 15
Operations Research ................................................................................................................. 16
Inventory management ................................................................................................................16
Introduction and definitions ............................................................................................................ 16
Inventory management under a continuous review policy ................................................................. 18
The economic order quantity ...................................................................................................... 18
The reorder point ....................................................................................................................... 20
EOQ with production ................................................................................................................. 22
Inventory management under a periodic review policy ..................................................................... 23
To practice .................................................................................................................................... 25
Recap and wrapping up .................................................................................................................. 26
Master production schedule ........................................................................................................26
Aggregate production planning ....................................................................................................... 27
Balancing supply and demand ................................................................................................... 27
Basic strategies of the aggregate planner .................................................................................... 30
Master Production Schedule .......................................................................................................... 35
Exercises ....................................................................................................................................... 40
Material Requirements Planning ..................................................................................................41
Bill of materials .............................................................................................................................. 42
The MRP process ........................................................................................................................... 43
Lot-sizing techniques ..................................................................................................................... 45
Lot-4-lot policy .......................................................................................................................... 45
Fixed Order Quantity policy ........................................................................................................ 46
Fixed Period Ordering policy ....................................................................................................... 48
Part period balancing ................................................................................................................. 50
The Silver-Meal heuristic ............................................................................................................ 52
Moving through the bill of materials ................................................................................................. 54
Concluding remarks....................................................................................................................... 56
Exercise ........................................................................................................................................ 56
1
,Facility layout and Job Shop Scheduling .......................................................................................57
Facility layout ................................................................................................................................ 57
Job Shop ................................................................................................................................... 58
Batch Shop ............................................................................................................................... 59
Flow Shop ................................................................................................................................. 60
Process type selection ............................................................................................................... 61
Job Shop Scheduling ...................................................................................................................... 62
Johnson’s rule ........................................................................................................................... 62
General Job-Shop Scheduling problem ....................................................................................... 64
Earliest start time schedule generation ....................................................................................... 67
Other priority rules ..................................................................................................................... 70
Facility layout and assembly line balancing ..................................................................................71
Facility layout – recap ..................................................................................................................... 71
Process type selection ............................................................................................................... 72
Assembly line balancing ................................................................................................................. 72
Exercise ........................................................................................................................................ 81
Routing .......................................................................................................................................82
Networks and graphs ..................................................................................................................... 82
Simple/multi-graph .................................................................................................................... 82
Incomplete/complete graph ....................................................................................................... 83
Weigthed/non-weighted graph.................................................................................................... 83
Walk, trails, circuits, paths and cycles ........................................................................................ 83
The shortest path problem.............................................................................................................. 85
Dijkstra’s shortest path algorithm ............................................................................................... 86
The A* algorithm ........................................................................................................................ 89
LP formulation for the shortest path problem .............................................................................. 89
The travelling salesman problem (TSP) ............................................................................................ 90
Exercise .................................................................................................................................... 93
LP formulation for the travelling salesman problem ..................................................................... 93
Sub-tour elimination constraints ................................................................................................ 94
The vehicle routing problem (VRP) ................................................................................................... 94
A nearest neighbour heuristic for the VRP .................................................................................... 96
The Clarke-Wright savings algorithm ........................................................................................... 98
2
,Introduction to operations management
Operations management
Voorbeeld
- Wachttijd
o Wachten op levering leveranciers (onzekerheid)
- Veiligheidsvoorraad
o Deel aanhouden voor stel leverancier komt te laat of er is meer vraag dan
verwacht
- Grote product variabiliteit
o Personaliseren van fiets
o Complexer productieproces
o Informatie nodig klanten
o Flexibiliteit inbouwen om aan variabiliteit te voldoen
- Balanceren workload
o Toewijzen operaties aan verschillende werkstations
- Opslag
Basic terminology
Operations management
- The process of designing, planning, coordinating and controlling all activities related
to the production and delivery of goods and services
- The focus is on the actual core business of an organization (we often talk about the
‘operations’)
- Concerns the optimal usage a deployment of inputs (including raw materials, labor,
capital, information, customers with a specific need, ...) when satisfying customer
demand
- Department in een bedrijf, mensen die core business idee doen
o Maken product, produceren het, leveren service
o Alle departemten errond zijn ondersteunde departementen om operations zo
goed mogelijk te laten verlopen (sales, marketing)
Question: In how many of these businesses does Operations Management play an important
role?
- All 4
Good versus service
Good Service
- Physical object / tangible asset - Intangible asset
- Ownership is clearly defined (and - There is typically no transfer of
can be transferred) ownership
- Can be kept in storage - Cannot be stored
3
, - Little to none interaction with the - Often in interaction with the
end customer customer
- There is no strict separation between goods and services
Products are typically positioned on a continuum, acknowledging that they consist of
a blend of both goods and services
- Product
o Waar product is, wie het vast heeft is duidelijk
o Ergens leggen en het erna weer ophalen
o Geen interactie met klant nodig om product te verkopen, klant kan het zien in
winkel
- Service
o Minder tastbaar
o Naar concert gaan, kan je niet opslaan
o Bepaalde beveling tussen producent en klant
o Moeilijk vasthouden
o Afhankelijk van interactie tussen maker/producent/beheerder en klant
- Suiker: niet geïnteresseerd in after sale service
- Auto: fysiek product, maar ook met aantal services
o Onderhoud, after sales service
- Restaurant: niet enkel over eten, ook geïnteresseerd in service erbij
o Niet kunnen vasthouden, maar wel deel van product dat je hebt gekocht
vanavond
- Legal advice, hoorcollege
o Papier krijgen
o Gaat over interactie en services
The transformation process
- Transformation of inputs (energy) to outputs (good or service a client wants to buy)
- Feedback: output show what needed input it
o Interest of clients
o Bepalen welke inputs nodig zijn
- Transformatieproces heel ruimt zien
o Fysische karakteristieken van material veranderen
o Producten van plaats veranderd (andere locatie gekregen)
o Ownership geëindigd
4
