5 15300 15300 simulation simulation transportation

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Unformatted text preview: riod Apr May 1,000 750 700 50 150 100 $40 per tire $50 per tire $70 per tire $ 2 per tire 700 50 150 tires 700 50 130 Transportation Example Important points 1. Carrying costs are $2/tire/month. If $2 goods are made in one period and held over to the next, holding costs are incurred 2. Supply must equal demand, so a dummy column called “unused capacity” is added capacity” Table 13.6 Transportation Example Important points 3. Because back ordering is not viable in this example, cells that might be used to satisfy earlier demand are not available Transportation Example 4. Quantities in each column designate the levels of inventory needed to meet demand requirements 5. In general, production should be allocated to the lowest cost cell available without exceeding unused capacity in the row or demand in the column Table 13.7 Management Coefficients Model Other Models Linear Decision Rule Builds a model based on manager’s Builds manager’ experience and performance A regression model is constructed regression to define the relationships between decision variables Objective is to remove Objective inconsistencies in decision making Minimizes costs using quadratic cost curves Minimizes Operates over a particular time period Operates Simulation Uses a search procedure to try different Uses combinations of variables Develops feasible but not necessarily optimal Develops solutions Summary of Aggregate Summary Planning Methods Solution Approaches Techniques Aggregate Planning in Services Important Aspects Graphical/charting methods Trial and error Simple to understand and easy to use. Many solutions; one chosen may not be optimal. Transportation method of linear programming Optimization LP software available; permits sensitivity analysis and new constraints; linear functions may not be realistic Management Heuristic coefficients model Simple, easy to implement; tries to mimic manager’s manager’ decision process; uses regression Controlling the cost of labor is critical 1. Close scheduling of labor-hours to laborassure quick response to customer demand 2. Some form of on-call labor resource on3. Flexibility of individual worker skills 4. Individual worker flexibility in rate of output or hours Tabl...
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This note was uploaded on 05/21/2011 for the course ECON 123 taught by Professor Day during the Spring '11 term at Arab Open University, Amman.

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