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Operations Planning

Operations Planning. Lecture #7. Forecasting. Forecasting. Estimating future events Has NO value to an organization unless the forecasts are included in organization’s decision-making process. Contingency Planning.

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Operations Planning

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  1. Operations Planning Lecture #7

  2. Forecasting

  3. Forecasting • Estimating future events • HasNOvalue to an organization unless the forecasts are included in organization’s decision-making process

  4. ContingencyPlanning • Preparation of a course of action to meet a situation that is not expected, but that, if it occurs, will have a significant impact on the organization.

  5. Contingency Planning • Example: Sales plummet 20% in a quarter

  6. Operations Planning Your example?

  7. Contingency Planning • Event could be positive • A 20%increasein sales in a quarter

  8. Keys to Successful Contingency Planning • Identify contingent events • Establish an action point • Develop new strategies and plans (shhh!)

  9. Identify Contingent Events • A significant decline in sales • A product recall

  10. Establish an Action Point • When sales decline at least 20% in two consecutive quarters • When more than 5,000 vehicles of any single model are recalled

  11. Strategies and Plans • Lay off 30% of production line workers and first line supervisors • Seniority? • Merit rating?

  12. Layout Patterns • How the flow of work is laid out for efficient production and minimal “bottlenecks”

  13. Layout Patterns • Process Layout • Product Layout • Fixed Position Layout

  14. Process Layout(Functional Arrangement) • Manufacturing of Chairs, Tables, and Hat Racks

  15. Chairs, Tables, Hat Racks Sanding Cutting Finishing Assembling

  16. Process Layout Example • Chairs, tables and hat racks all pass through the four functional areas, but not necessarily in the same sequence. • Major advantage is economy of scale in the functional areas.

  17. Product Layout • As product lines increase, and/or volume increases, this form tends to replace the Process Layout

  18. Product Layout • Chairs, Tables, and Hat Racks

  19. CHAIRS Cut Assembly Sand Fin TABLES Cut Sand Fin Assembly HAT RACKS Cut Sand Assembly Fin

  20. Product Layout Example • Can make a change to any product line without affecting production of other products. • Major disadvantage is duplication of resources in the production areas.

  21. Fixed Position Layout • Product remains stationary • Labor and tools come to the product

  22. Fixed Position Layout

  23. TV Ads

  24. How Many Units to Produce? • Known (or firm) orders • Forecasts of demand

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