Question: Measures of performance for a simple operations system may include the efficient management of the throughput, utilisation, inventory, cycle time, lead time, customer service and
Measures of performance for a simple operations system may include the efficient
management of the throughput, utilisation, inventory, cycle time, lead time, customer
service and quality systems. However, the way performance is managed is largely
dependent on what the firms business strategy deems more important. As an example,
a firm may focus on high customer service over low utilisation. Furthermore, it is
established that increasing variability always degrades the performance of an
operations system. More importantly, increasing variability impacts the system along
three general dimensions: time, inventory and capacity. The dimensions can be viewed
as buffers with which the operations manager can control the system, but it also
depends on different business environments. This concept is generally known as paymenoworpaymelater. Now, what is the appropriate buffering strategy for the
following operations? You must justify your answer for each of the dimensions:
a A retailer that sells inexpensive unpredictable ballpoint pens.
b Organ transplants unpredictable demand for, and supply of human organs for
transplant.
c Emergency service unpredictable demand for fire or ambulance services.
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