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In manufacturing, the purpose of scheduling is to keep due dates of customers and then minimize the production time and costs, by telling a production facility when to make, with which staff, and on which equipment. Production scheduling aims to maximize the efficiency of the operation, utilize maximum resources available and reduce costs.
Improving operational efficiency begins with measuring it. Since operational efficiency is about the output to input ratio, it must be measured on both the input and output side. Quite often, company management is measuring primarily on the input side, e.g., the unit production cost or the man hours required to produce one unit.
In this way, inventory levels were kept low, investment in in-process inventories was at a minimum, and the investment in purchased natural resources was quickly turned around so that additional materials were purchased." Plenert goes on to explain Toyota's key role in developing this lean or just-in-time production methodology. [12]
Typically, supply-chain managers aim to maximize the profitable operation of their manufacturing and distribution supply chain. This could include measures like maximizing gross margin return on inventory invested (balancing the cost of inventory at all points in the supply chain with availability to the customer), minimizing total operating expenses (transportation, inventory and ...
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of cost (production cost) . A decrease in cost per unit of output enables an increase in scale that is, increased production with lowered cost. [1]
An individual production system is usually analyzed in the literature referring to a single business; therefore it is usually improper to include in a given production system the operations necessary to process goods that are obtained by purchasing or the operations carried by the customer on the sold products, the reason being simply that ...
Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project [1] or the construction of a building. [2] In the public sector, cost reduction programs can be used where income is reduced or to reduce debt levels. [3]
Process optimization is the discipline of adjusting a process so as to make the best or most effective use of some specified set of parameters without violating some constraint. Common goals are minimizing cost and maximizing throughput and/or efficiency. Process optimization is one of the major quantitative tools in industrial decision making.