Production system synthesis and application of operations research techniques toward operations management decision making

Abstract

Profitable performance of an industrial unit depends on a rationale production system. The level of performance depends solely on the production policy along with any other relevant factors. Establishment of a clearcut relation between the level of performance and cost of production as a whole would require such considerations as, i. Use~of mathematical tools and Scientific methodology of Operations Research .(OR) and statistics. ii. Scientific approach of record keeping, sorting, and retrieval of basic data etc. The present research work is intended primarily to explore the use of OR techniques and demonstrate their application to an industrial unit through its different stages of production decisions. The work starts with an analysis of the production system of the Mimi Chocolate Factory, with the aim to find out idle time of both man and machine, the bottlenecks in the production system. Secondly, the work is concerned with the estimation of demand of the products through the use of the historical iv sales data of past 24 months of consecutive periods. The Winters' method of exponential smoothing was applied for the purpose. Thirdly, the work is concerned with the determination of the optimal product-mix of the Mimi products. An LP model was developed on the basis of plant capacity,availability of man-hrs. and machine-hrs., ingredients and forecasted demand. Finally, an optimum procurement policy for some of the major raw materials and ingredients of Mimi chocolate factory was formulated on the basis of various cost elements related to inventory. The Dynamic Programming technique was applied to arrive at a solution to each of the ingredients of the problem.