1. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 0000 X Supporting Slides Professor David K Harrison Glasgow Caledonian University Dr David J Petty The University of Manchester Institute of Science and Technology Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture ISBN 0 7506 49771

2. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Qualitative Analysis Quantitative Analysis Management Science Operations Research Overview 10 1001

3. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - The Quantitative Analysis Process Implement Results Define Problem Formulate a Clear and Unambiguous Statement of the Problem Develop Model Models can take several forms Acquire Data Accurate Input Data is Essential Develop Solution Algebraic or Numerical Solution Test Solution Validation Analyse Results Implications 10 1002

4. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Basic Rules Events Mutually Exclusive Collectively Exhaustive MECE Draw a Card Face and Number King and 7 and,, Basic Probability - Definitions 10 and 7 and Black and 1003

5. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Basic Probability - Law of Addition - 1 Take a Standard 52 Card Deck (No Jokers) Draw a Card and Write Down Result Replace Card Draw a Second Card and Write Down Result What are the Probabilities of Drawing:- a) A Heart or a Diamond? b) A Five or a Diamond? ?? 10 1004

6. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Adding Mutually Exclusive Events AB AB Adding Non Mutually Exclusive Events Basic Probability - Law of Addition - 2 10 1005

7. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Marginal or Simple Probability Joint Probability Independent Events a b Conditional Probability Then a b Basic Probability - Independence 10 1006

8. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 30 Blue 10 Spot 20 Plain 30 Red 6 Spot 24 Plain Bayes Theorem If a red ball is drawn, what is the probability that it will have a spot? NOT Independent Statistically Dependent Events 10 1007

9. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - H (0.5) T (0.5) TH (0.25) TT (0.25) HT (0.25) HH (0.25) HHT (0.125) HTH (0.125) HTT (0.125) THH (0.125) THT (0.125) TTH (0.125) TTT (0.125) HHH (0.125) H T H H H H H H H T H T H T H T H T H T H T H T T T T T T T HHHH (0.0625) HHHT (0.0625) HHTH (0.0625) HHTT (0.0625) HTHH (0.0625) HTHT (0.0625) HTTH (0.0625) HTTT (0.0625) THHH (0.0625) THHT (0.0625) THTH (0.0625) THTT (0.0625) TTHH (0.0625) TTHT (0.0625) TTTH (0.0625) TTTT (0.0625) 01234 14641 01234 Probability Trees 10 1008

10. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Throwing Four Coins 0 1234 0.1 0.2 0.3 Probability P(x) Score x Throwing a Die 0.1 0.05 0.15 0.2 123456 Probability P(x) Score x Probability Distributions 10 1009

11. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - x1x1 x2x2 M The Normal Distribution 10 1010

12. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Statistical Formulae 10 1011

13. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - To Provide Information To Anticipate Changes Rationale ShortLongMedium Forecasting - Overview 11 1101

14. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Judgement Conference Survey Delphi ExtrapolationIntuitionPrediction Graphical Moving Average Exponential Smoothing Regression Multiple Regression Forecasting Forecasting Approaches 11 1102

15. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Intuitive Forecasting Approaches 11 Judgment Conference Survey Delphi The Opinion of One Person The Collective Opinion of a group of People Collecting the Independent Opinion of Several People Combining the Conference and Survey Approaches 1103

16. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - JanFebMarAprMayJunJulAugSepOctNovDec 2001 105100106105100108107106113109113112 114118116115114117116122120122121125 DecNovOctSepAugJulJunMayAprMarFebJan 2002 Forecasting Exercise (1) 11 1104

17. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - December 2002 Sales - Forecasting Exercise (2) 11 1105

18. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Moving Average Exponential Smoothing Forecast for next period is the average of previous n data points Advantage Simple Analytical Extrapolation 11 n = Number of data points k = Number of points used to average x i = Data element F (i+1) = Forecast for next period.  = Smoothing factor Forecast is a weighted average (most recent is most important) of all data points Advantage Logical Only two data elements needed Move up by 1106

19. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing - 1 11 1107

20. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Trend Exponential Smoothing - 2 11 1108

21. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing - 3 Seasonal 11 1109

22. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Exponential Smoothing - 4 Combined 11 1110

23. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing Correction “Anticipates” Changes in the Data. Also Called Trend Correction Trend Correction 11 1 st Order Smoothing 2 nd Order Smoothing 1111

24. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing - 1 11 Random 1112

25. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Trend Second Order Smoothing - 2 Trend 11 1113

26. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Second Order Smoothing - 3 Seasonal 11 1114

27. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Combined Second Order Smoothing - 4 Combined 11 1115

28. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Regression Analysis - 1 11 Aftermarket Disc Brake Pads Sales + 5 Yrs vs Car Sales Now Student Attendance vs Student Marks Is There a Correlation Between Students Marks and Attendance? Is There a Correlation Between Car Sales Now and Demand for DBPs in 5 Years? 1116

29. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - x y (x 1, y 1 ) (x 2, y 2 ) (x 3, y 3 ) (x 4, y 4 ) (d 1 ) (d 2 ) (d 3 ) (d 4 ) y=a+bx What Line Will Minimise Total Distance? Regression Analysis - 2 11 a 1117

30. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Regression Analysis – 3 11 1118

31. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Use of Regression Analysis Inside the company Inside the Industry Outside the Industry 11 1119

32. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Perfect Positive r =+1 Positive Correlation 0 < r < 1 Perfect Negative r =-1 Negative Correlation 0 > r > -1 No Correlation Correlation Coefficients 11 1120

33. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Multiple Regression Analysis 11 New Mark Attendance Old Mark Multiple Regression y=a+b 1 x 1 +b 2 x 2 1121

34. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Reduce Lead Time Aggregate Forecast Improving Forecast Accuracy - 1 11 1122

35. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Improving Forecast Accuracy - 2 11 1123

36. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Essential for all Businesses Three Approaches Uncertainty is Inherent Uncertainty Must be Anticipated Forecast Accuracy can be Improved If We Make this Man Accountable for the Weather, Will it make the Sun Shine? Forecasting Summary 11 1124

37. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - The most favourable conditions; the best compromise between opposing tendencies; the best or most favourable. Objective Functions Basic Optimisation Linear Programming Sensitivity Analysis Optimisation 12 1201

38. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Different Objectives e.g.:Profit Cashflow Sales Strategic and Judgmental Basis for Optimisation Objective Functions 12 1202

39. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 6.38 Simple Optimisation (1) 12 1203

40. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Simple Optimisation (2) 12 Low Resolution Medium Resolution High Resolution 1204

41. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - (7.1, 6.7) Optimisation - 2 Variables 12 1205

42. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Linear Programming (1) Linear Objective Function A Set of Linear Constraints Non-Negativity 12 1206

43. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Optimum Point 102030405060708090100110120130140150 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 X 1. Power Limitation: 160 = 1.34X + Y Power 160 Linear Programming (2) 12 112 = 1.6X + 1. 4Y Objective Function - Sales 3. Objective Function: Sales = 1.6X + 1.4Y Machining Capacity 2. Machining Capacity: 150 = X + 1.25Y 1207

44. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 102030405060708090100110120130140150 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 1. Power Limitation: 160 = 1.34X + Y 2. Machining Capacity: 150 = X + 1.25Y X Y Machining Capacity Power 160 Linear Programming (3) 12 Lab Capacity 3. Labour Capacity: 130 = X + Y 1208

45. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - 102030405060708090100110120130140150 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 X Y 160 1. Power Limitation: 160 = 1.34X + Y 2. Machining Capacity: 150 = X + 1.25Y 3. Labour Capacity: 130 = X + Y Linear Programming (4) 12 224 = 1.6X + 1. 4Y 196 = 1.6X + 1. 4Y Objective Function: Sales = 1.6X + 1.4Y Optimum Point Optimum: X= 50, Y = 80 1209

46. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - X Y Z Y Material X Material Z Material Total Capacity Objective Function Multiple Variables 12 1210

47. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Problems So Far Assume Perfect Information Sensitivity Analysis Determines Criticality of Base Data 5.95 6.38 f(x) g(x) Sensitivity Analysis - 1 12 1211

48. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sales Cost Profit Different Variables May Have Different Effects Sensitivity Analysis - 2 12 Costs = £1000K 1212

49. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sensitivity Analysis – 3 12 1213

50. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Sensitivity Analysis – 4 Test the Sensitivity of the Model Itself Test the Sensitivity of the Model to Input Variables Can be Used for a Variety of Problems 12 1214

51. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Optimisation Requires an Objective Function Analytical or Numerical Methods Can be Used Sensitivity Analysis Checks the Robustness of any Model Constants Parameters Optimisation Supports, not Replaces Management Summary 12 1215

52. Systems for Planning & Control in Manufacturing Produced by D K Harrison and D J Petty 21/04/02 Sld - Course Book Systems for Planning & Control in Manufacturing: Systems and Management for Competitive Manufacture Professor David K Harrison Dr David J Petty ISBN 0 7506 49771 X 0000