OPIM101 - Spring 2012 - Lecture 1 (3)

OPIM101 - Spring 2012 - Lecture 1 (3) - An Introduction to...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Slide 1 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 An Introduction to Process Analysis Lecture 1 January 17, 2012
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Slide 2 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 Examples of processes Factory wood metal guitars University students alumni Distribution center bulk items small parcels Calculate credit risk mortgage applications approved loans rejected loans § Processes can involve both goods and services. § Processes can have multiple inputs and/or multiple outputs.
Background image of page 2
Slide 3 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 Defining a process’ scope Calculate credit risk mortgage applications approved loans rejected loans § A process is a set of activities that accepts inputs and produces outputs. § A process can be defined at an aggregate level: § A process can be defined at a micro level, with multiple sub-processes: mortgage applications approved loans rejected loans Collect data from client Evaluate loan metrics Underwriting decision Communicate decision to sales
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Slide 4 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 Defining a process’ flow unit § The flow unit is what is tracked through the process and generally defines the process output of interest. University students A person alumni Processing plant milk Lbs of milk powder milk powder Blood donation center people blood Pints of type AB blood Processes Flow unit
Background image of page 4
Slide 5 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 Metrics of process analysis § I = Inventory = how many flow units are in the process § R = Flow Rate = rate at which flow units enter or leave the process § T = Flow Time = total time a flow unit is in the process § Little’s Law: § For example: Call center incoming calls completed calls Inventory = Flow Rate x Flow Time or I = R x T R = On average 11 callers per minute T = On average a caller spends 2.5 minutes with the call center I = Average number of callers on the phone with the call center = R x T = 11 x 2.5 = 27.5 callers
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Slide 6 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 A Little’s Law application: In-transit inventory § O’Neill, based in California (CA), buys wetsuits from a supplier in Thailand: Each month they order on-average 15,000 wetsuits, R = 15,000 Shipping between Thailand and CA takes on-average 2 months, T = 2 I = R x T = 15,000 x 2 = 30,000 units are in-transit on average T = 2 months R = 15000/month R = 15000/month I = 30,000 wetsuits
Background image of page 6
Slide 7 OPIM 101, Spring 12, Profs Cachon/Savin, Lecture #1 Four different ways to count inventory § In terms of flow units (The “ I ” in I = R x T ): Number of wetsuits, patients, tons of wheat, semiconductor chips, etc. Useful when the focus is on one particular flow unit. § In terms of $s (The “ I ” in I = R x T ): The $ value of inventory This is an intuitive measure of a firm’s total inventory. § In terms of days-of-supply: The average number of days a unit spends in the system.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 32

OPIM101 - Spring 2012 - Lecture 1 (3) - An Introduction to...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online