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‡ Management --------- requires to take decisions.
‡ Decision should be taken logically not arbitrarily.
‡ Decision makers require to know:
1. The objective or mission of the organization, that is the purpose for
which the undertaking is in being.
2. The policies of the organization, that is the means whereby the mission
or objectives are to be achieved.
‡ In the absence of such knowledge the decisions can only be taken
capriciously.
V * A short term decision may determine some long-term action which is
undesirable but inescapable.
V m M ------- not a self-contained or self ± sufficient
body.
V It depends upon integration with rest of the system.
V Government legislation may force to make a change
which requires a service modification. In turn this
can alter processes in such a way that
µoperators/workers¶ are displaced with consequent
redundancy and retaining problems.
V m M manager should look outside the four walls of
his unit ------------------- the problems foreseen and
rectified.
V The m M strategy must try to link the policy decisions associated with
production and/or operations to the market place, the environment in
which the organization operates and the overall objectives of the
organization.
V The successful manager must plan, execute and control operations
within the framework of the corporate plan.
V Indeed, unless the production/operations plan is part of the corporate
plan, the total enterprise can only be a failure or at best a partial
success.
V From the corporate policy of the organization, through its links into the
market place, The m M function then must drive a m M Strategy.
V These activities must be linked in a two way flow of information and
decision making.
Corporate policy

m M strategy
  
V m M ---- a part of the whole organization.
V rganization can succeed only by carrying on active transactions
with their environment, and any production/operations unit stands
within two identifiable, but not independent environments --- the
community at large and the parent corporation.

V These interdependences produce two important consequences of

high practical value:
1. Changes in the environment impose changes in the
organization.
2. Changes within the organization affect the environment.
* rganizations must be prepared to respond to change.
*No decision is eternal.
!   
1. Where multiple objectives exist, it is unwise to try to satisfy
them all simultaneously.
A public swimming pool can be designed to satisfy at
least three objectives:
a) To allow divers to practice;
b) To enable serious swimmers to swim;
c) To let µfun¶ swimmers enjoy themselves.
*An operation manager may identify a number of possible
objectives:
I. Maximum customer satisfaction;
II. Minimum cash flow;
III. Minimum scrap and/or rework;
IV. Minimum inventory;
V. Maximum resource utilization;
VI. Maximum employ satisfaction.
2. The greater the diversity the greater the difficulty.
V Diversity must not be restricted at all costs, but the costs of
diversity must be realized when taking the µjust one more¶
decision.
3. mroblems become easier if broken into parts.
V Some problems when first viewed seem to vast to be dealt
with.
V Breaking the problem up can result in solving the parts
which can be resolved, and hence displaying the rest in a
form which indicates how they may be dealt with.
º. rganizations should be kept as small as the market and the
technology permit.
V Age of change
V Larger organization -------- slower its response to change
5. rganization structures should serve the needs of the
customer.
V Enterprises must create that which satisfies the consumer.
"  
#$ %&'()
Whatever the technology, an attempt to satisfy two
significantly different market positions is often doomed to
failure.
*$%& '
To attempt to produce high and low volume through the
same resources can result in considerable organizational
difficulties.
+$%&'),%
Simple products or services cannot readily be produced in
organizations designed to make complex ones --- the
infrastructure of the organization will impose enormous
burdens.
 Forecasting
Forecasting is the prediction of future events on the
basis of
- Historical Data
- pinions
- Trends
- Known Future Variables
 m
m SE F F ECAST
V To prepare sales and other budgets
V To plan production
V To plan investment in production capacity
V To determine resource requirement
V To provide basis for business planning;
V To establish targets
V To plan promotional strategy
V To provide basis for decision making
VMarketing opportunity analysis is at the
heart of marketing and this requires
accurate sales forecast
 %)&&
Two basic forecasts:

1. The long-term market forecast

(5 years and more)
2. The short-term market forecast
(1 budgetary year)
-.''(&
V mroduction/operations manager has little
responsibility for it.
V It should be carried out by marketing people
backed by economic, statistical, political and
technical advisers, and will be based upon
information on such matters as:
i) Levels of activity, both national and international;
ii) Government expenditure;
iii) Availability of human and other resources;
iv) mossible changes in price structures;
v) variations in living standards;
 vi) competition, both national and international;
vii) mossible new products and/or services;
viii) Market potential;
ix) Technological changes;
x) esources of the organization;
xi) History of the organization;
xii) long-term objectives, policies and plans of the
organization.

* Long-term forecast is particularly necessary when

considerable expansion is required and when heavy
capital expenditure is contemplated.
 " "
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0 


V mrediction covering the next budget period, usually 12 months, of:
1. The products/services to be sold, defined in as much detail as
possible;
2. The prices which the market can bear;
3. The quantity } of each product or service
º. The quality } ----- do ------
5. The reliability } ------ do ------
6. The required delivery dates/timings.
And will be in agreement with the general policy of the organization.

V Items for stock

V Customers¶ design, or
V A company offering a service rather than a product
V mroduct or service groups ----- defining a group as
work offered having a stable and similar cost
pattern
V The short-term forecast will then detail:
a) The product/service groups offered;
b) The volume of business measured financially to be
derived from each group;
c) The distribution of this business throughout the
year.
The procedure for setting up a forecast:
1. A target figure for profit and/or volume for the
forthcoming year
2. The market people ------- set a tentative forecast, which is
submitted to the operating and finance people.
3. The feasibility of meeting the tentative forecast, having
regard to the appropriate facilities available and obtainable.
º. The finance people will examine the emended forecast to
see if it will satisfactorily meet the company¶s policy on
earning and investment.
5. With the comments of the operations and finance people
available, marketing will produce another forecast which
again is scrutinized.
6. Acceptable to all concerned.
7. The final forecast is then submitted to the top management
for approval.
 " m
/ /
V A system within a system
V It generally employs the bulk of the people,
utilizes the bulk of the physical assets, requires the
bulk of the financial resources and is made up of
many sub-systems in the organization.
V perating decisions to be made rapidly
V Before any system can be set up, developed or
used, it is essential to audit the situation, discover
what is extant and what is desirable. Corporate
strategists have long suggested that in setting up a
strategy it is useful to consider:
1. The strengths and the weaknesses -- -- of the
enterprise, and
2. The opportunities and threats -- -- offered to the
enterprise.
 -1 2(1
)) 1 -1

mroduct

mlant

mrocesses

mrogrammes

meople
V Consider a proposal to use a computer for production control
in place of an existing manual system.
V In this discussion only some of the cells are highlighted:
m3
)) 1 An effective computer system
offers the chance of significantly increasing
utilization of resources.
m3 -1 All processes are well-defined
for purpose of a quality system.
m''3 2(1 The present method of
production control will not easily transfer to a
computerized system.
m)3 -1 The existing staff believe that a
computerized system will result in the loss of jobs
and a reduction in a status for those remaining.
  
/
4
V m''
V .)''
m'' are repetitive and routine, so that a
fixed procedure can be set down to solve them.
.)'' decisions are moved, unstructured, and
are often associated with people, their resolution depending
upon the decision-maker¶s judgment, knowledge and
experience.

V Clearly, the more problems which can be formulated so that

their decisions can be programmed, the more time will be
available for dealing with the non-programmable problems
which are frequently the most important.

&%
1. Materials management
2. Methods and procedures
3. Timetabling
º. mreparation of estimates
5. Quality management
6. Safety procedures
7. Maintenance policies
8. mayment policies