Operations Management Is The Core Of Any Business Understand ✓ Solved

Operations Management Is The Core Of Any Business Understanding The B

Operations management is the core of any business. Understanding the basics of operations management and the associated best practices allows you to understand the importance of eliminating waste, while improving quality and customer service. Inventory is no longer simply a necessary evil, but a means by which companies have found ways to gain competitive advantage.

The assessment involves analyzing the role of operations management within an organization, particularly focusing on production decisions, inventory management, forecasting, and planning tools. It uses a scenario involving ABC Manufacturing to explore aggregate planning, inventory decisions, and forecasting methods.

Sample Paper For Above instruction

Operations management is an essential function central to the success of any business organization. It encompasses the planning, organizing, and supervising of processes related to production and delivery of goods and services. The scenario with ABC Manufacturing illustrates the practical importance of operations management in decision-making processes, especially in production planning and inventory control.

In the case of ABC Manufacturing, the core issue revolves around determining the optimal production strategy to meet fluctuating demand for electric motors, while maintaining desired inventory levels and minimizing costs. The use of a level aggregate plan, which involves producing a fixed quantity each month, aims to stabilize production rates, simplify scheduling, and optimize resource utilization. However, it also necessitates careful calculation of the aggregate production rate, workforce requirements, and inventory policies.

To approach such an analysis, a systematic application of operations management tools such as aggregate planning, inventory management techniques (EOQ and reorder point), and forecasting methods is essential. This allows the company to balance demand and supply effectively, reduce waste, and improve customer satisfaction by ensuring timely deliveries.

Specifically, in this scenario, calculating the aggregate production rate involves understanding the total demand over a six-month period, the initial and desired ending inventory, and formulating an algebraic equation to ensure satisfied demand. Similarly, determining the workforce required considers the hourly productivity rate, that is, how many hours of work are needed per unit, and then deriving the number of workers based on that rate.

Inventory decisions, such as the economic order quantity, play a critical role in minimizing costs related to ordering and holding stock. Calculating EOQ involves balancing the fixed order cost against holding costs and the demand rate, offering an optimal order size that minimizes total inventory costs. The reorder point, on the other hand, ensures that replenishment occurs in time to prevent stockouts, factoring in the lead time and demand during that period.

Forecasting demand accurately is pivotal for operations planning. Various methods such as naive, mean, moving averages, exponential smoothing, and trend analysis aid in developing reliable demand estimates. Each method has its pros and cons; for example, naive forecasting is simple but often inaccurate for variable demand, whereas exponential smoothing balances recent demand with historical data to produce smoothed forecasts that adapt over time.

Effective application of these operations management principles enhances a company’s ability to produce efficiently, reduce waste, and respond to market changes rapidly. Consequently, firms like ABC Manufacturing can better align their production capacity with demand, reduce costs, and improve service levels, ultimately gaining a competitive advantage in their industry.

References

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• Heizer, J., Render, B., & Munson, C. (2020). Operations management (13th ed.). Pearson.
• Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2019). Operations management for competitive advantage (15th ed.). McGraw-Hill Education.
• Silver, E. A., Pyke, D. F., & Peterson, R. (2016). Inventory Management and Production Planning and Scheduling. Wiley.
• Nair, N. (2019). Forecasting methods in operations management. Journal of Business Forecasting, 2020.
• Stevenson, W. J. (2018). Operations management (13th Ed.). McGraw-Hill Education.
• Sharma, S., & Gupta, P. (2021). Supply chain and inventory management strategies. International Journal of Operations & Production Management.
• Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.