written report
MGT603_Assess 3 Written Report Page 1 of 7
ASSESSMENT 3 BRIEF
Subject Code and Title MGT603: Systems Thinking
Assessment Written Report
Individual/Group Individual
Length Up to 2000 words
Learning Outcomes c) Analyse, select and apply systems modelling tools in
integrating, optimising and enhancing business processes
within contemporary organisations.
d) Synthesise technological and non-technological
solutions to business problems that promote integration
and that optimise whole-of-enterprise operations
Submission By 11:55pm AEST/AEDT Friday of Module 6.2 (week 12)
For intensive class:
By 11:55pm AEST/AEDT Friday of Module 6.2 (week 6)
Weighting 40%
Total Marks 40 marks
Context:
There are two approaches towards improving systems, short-term approaches that normally
addresses the symptoms and rarely help understand and address the cause of the problem, and
long-term approaches, which allow managers to address the real cause(s) of the problem. In this
assessment, students will try to solve a practical problem by using Systems Thinking tools called
System Archetypes combined with value stream mapping.
Instructions:
Assessment 3 is about uncovering the complexities in operations management generally,
identifying key themes, intended and unintended consequences and proposing a holistic solution
to the problem using a Systems Thinking lens.
The following scenario study provides you with a brief overview of a hypothetical problem. Be
aware that the scenario provided may not cover every detail that you will need to address in the
Written Report, in which case, you will need to conduct additional research, including further
research on how emergency departments function in any hospital.
MGT603_Assess 3 Written Report Page 2 of 7
Scenario
Overview:
Consider yourself as part of a team responsible for managing the operations of an emergency
department of a public hospital. The emergency department has received feedback from patients
suggesting that the patient wait times need to be improved. The value stream map of the current
operations is shown in the attached diagram.
The Value Stream Map is can be Found via the Assessment Link.
You have been tasked with improving patient turnaround time by reducing the current time to
half. To complete the task you are required to identify the various System Archetypes that affect
the operations of the hospital and the emergency department itself and based on the archetypes,
develop a future State Value Stream Map of the emergency department.
It is recommended that you identify and critically analyse intended and unintended
consequences, recommending holistic solutions that will optimise the operations of the
emergency department without compromising the performance of other functions of the
hospital.
Suggested format: Your Written Report should include the following sections and sub-sections.
Cover Page (Subject Name & Code, Assessment No., Student Name and Surname, Student
Number, Lecturer, Year and Trimester)
Executive Summary
Table of Contents
1. Introduction/Background
2. Main Discussion
2.1. Identification and analysis of the System Archetypes that may impede
performance
2.2. Analysis of the current State Value Stream Map of the emergency
department based on System Archetypes
2.3. Recommended new State Value Stream Map with desired reduction in
patient turnaround time
2.4. Discussion on Intended and unintended consequences of the modified
system
3. Conclusion
4. Recommendations
5. References
6. Appendices (Appendix A, Appendix B, )
MGT603_Assess 3 Written Report Page 3 of 7
Submission Instructions:
This Written Report is to be written according to academic writing guidelines and must be
submitted in compliance with the following;
1. You should make significant references to the subject material and substantial
wider reading. A minimum five (5) academic (books & peer-reviewed journal
articles) & two (2) other sources (newspaper article, trade publications, websites,
etc.) must be used. These should be referenced in the APA style, both in-text and in
a reference list. References to Wikipedia or similar unsubstantiated sources will
not be accepted.
2. The assignment is to include in-text citations and a reference list following the latest
APA referencing style. The APA referencing guide can be located in the Academic
Writing Guide at http://library.think.edu.au/ld.php?content_id=1882254
3. Submit Written Report (with references) via the Assessment link in the main
navigation menu in MGT603 Systems thinking on the Student Portal. The Learning
Facilitator will provide feedback via Grade Centre in the Student Portal. Feedback
can be viewed in My Grades.
Students should use the brief to guide what to include in the assessment and the following
rubric to inform the standard required.
http://library.think.edu.au/ld.php?content_id=1882254
MGT603_Assess 3 Written Report
Learning Rubric: MGT603 Systems Thinking Assessment 3 Written Report
Assessment
Attributes
Fail
(Unacceptable)
Pass
(Functional)
Credit
(Proficient)
Distinction
(Advanced)
High Distinction
(Exceptional)
Understanding of
research principles
and methods
applicable to MBA
The focus for the research
question(s) or basis for the
project is unclear.
The focus for the research
question(s) or basis for
project is adequately
clear.
The focus for the
research question(s) or
basis for project is
clear.
The focus for the
research question(s) or
basis for project is very
clear.
The focus for the
research question(s)
or basis for project is
exceptionally clear.
Percentage for this
criterion
20%
The rationale for the research
methodology is inappropriate
for the research
question/project.
The rationale for the
research methodology is
appropriate for the
research question/project.
The rationale for the
research methodology
is stated and
appropriate for the
research
question/project.
The rationale for the
research methodology is
compared with
alternatives and the
chosen method is
appropriate for the
research
question/project.
The rationale for the
research methodology
is critically compared
and evaluated against
alternatives and the
chosen method is
appropriate for the
research
question/project.
Knowledge and
understanding
(technical and
theoretical
knowledge).
Understands
theoretical models
and concepts and
tools and techniques
of systems thinking
and their applications
to operations
Limited understanding of
required concepts and
knowledge
Key components of the
assignment are not
addressed.
No discussion on systems
principles and tools such as
system dynamic, system
archetypes, causal loop
diagrams. Lack of
understanding and
application of value stream
Knowledge or
understanding of the field
or discipline.
Resembles a recall or
summary of key ideas.
Often confuses assertion
of personal opinion with
information substantiated
by evidence from the
research/course materials
on systems principles and
tools such as system
dynamic, system
Thorough knowledge
or understanding of the
field or discipline/s.
Supports personal
opinion and
information
substantiated by
evidence from the
research/course
materials.
Demonstrates a
capacity to explain and
apply relevant concepts
of systems principles
Highly developed
understanding of the
field or discipline/s.
Discriminates between
assertion of personal
opinion and information
substantiated by robust
evidence from the
research/course
materials and extended
reading.
Well demonstrated
capacity to explain and
A sophisticated
understanding of the
field or discipline/s.
Systematically and
critically discriminates
between assertion of
personal opinion and
information
substantiated by
robust evidence from
the research/course
MGT603_Assess 3 Written Report
management
practices
Percentage for this
criterion
30%
mapping to operations
management decision making
archetypes, causal loop
diagrams. Lack of clear
understanding and
application of value
stream mapping to
operations management
decision making
and tools such as
system dynamic,
system archetypes,
causal loop diagrams.
Demonstrates
understanding and
application of value
stream mapping
apply relevant concepts
of systems principles
and tools such as system
dynamic, system
archetypes, causal loop
diagrams. Demonstrates
good understanding and
application of value
stream mapping
materials and
extended reading.
Mastery of concepts
and application to
new
situations/further
Learning of systems
principles and tools
such as system
dynamic, system
archetypes, causal
loop diagrams.
Demonstrates
excellent
understanding and
application of value
stream mapping
Effective Written
Communication
Percentage for this
criterion
15%
Difficult to understand for
audience, no logical/clear
structure, poor flow of ideas,
argument lacks supporting
evidence.
Audience cannot follow the
line of reasoning.
Information, arguments
and evidence are
presented in a way that is
not always clear and
logical.
Line of reasoning is often
difficult to follow.
Information,
arguments and
evidence are well
presented, mostly clear
flow of ideas and
arguments.
Line of reasoning is
easy to follow.
Information, arguments
and evidence are very
well presented; the
presentation is logical,
clear and well supported
by evidence.
Demonstrates cultural
sensitivity.
Expertly presented;
the presentation is
logical, persuasive,
and well supported by
evidence,
demonstrating a clear
flow of ideas and
arguments.
Engages and sustains
audiences interest in
MGT603_Assess 3 Written Report
the topic,
demonstrates high
levels of cultural
sensitivity
Effective use of
diverse presentation
aids, including
graphics and multi-
media.
Analysis and
application with
synthesis of new
knowledge
Percentage for this
criterion
25%
Limited synthesis and
analysis.
Limited
application/recommendations
based upon analysis.
Demonstrated analysis
and synthesis of new
knowledge with
application.
Shows the ability to
interpret relevant
information and literature.
Well-developed
analysis and synthesis
with application of
recommendations
linked to
analysis/synthesis.
Thoroughly developed
and creative analysis
and synthesis with
application of pretested
models and / or
independently
developed models and
justified
recommendations linked
to analysis/synthesis.
Highly sophisticated
and creative analysis,
synthesis of new with
existing knowledge.
Strong application by
way of pretested
models and / or
independently
developed models.
Recommendations
are clearly justified
based on the
analysis/synthesis.
Applying knowledge
to new
situations/other
cases.
MGT603_Assess 3 Written Report
Correct citation of
key resources and
evidence
Percentage for this
criterion
10%
Demonstrates inconsistent
use of resources to support
and develop ideas.
Demonstrates use of
credible and relevant
resources to support and
develop ideas, but these
are not always explicit or
well developed.
Demonstrates use of
high quality, credible
and relevant resources
to support and develop
ideas.
Demonstrates use of
good quality, credible
and relevant resources
to support and develop
statements. Shows
evidence of wide scope
for sourcing evidence.
Demonstrates use of
high-quality, credible
and relevant
resources to support
and develop
statements. Shows
evidence of wide
scope for sourcing
evidence.
Context:
Instructions:
The Value Stream Map is can be Found via the Assessment Link.
Suggested format: Your Written Report should include the following sections and sub-sections.
Submission Instructions:
Learning Rubric: MGT603 Systems Thinking Assessment 3 Written Report Value Stream Map – Emergency Room
Wait
Out Patient
Registration
Taken to ER
Room
Nurse
Examines
Patient
Doctor
Examines
Patient
Nurse brings
Medical
Supplies
Doctor Treats
Patient
Patient Goes
Home
Patient
Hospital
Records
Attending
Nurse
Attending
Physician
Material Flow
Information Flow
Go to
Waiting
Area
Wait Wait Wait Wait
Insurance
Company
Departing
Instructions
Wait
Available Room
Patient history
Vital Statistics
Patient history
Vital Statistics
Treatment
Information
Diagnosis &
Supply Needs
Treatment
Information
Insurance Info
Nature of Injury
Patient history
Patient Info
Patient ready
for Treatment
Patient history
Vital Statistics
Diagnosis &
Departing Inst.
Departing
Instructions
Source: http://image.slidesharecdn.com/12may1345deanblisstrackarev1-1324465696655-phpapp01-111221051739-phpapp01/95/lean-what-is-
it-and-how-does-it-work-22-728.jpg?cb=1324445291
http://image.slidesharecdn.com/12may1345deanblisstrackarev1-1324465696655-phpapp01-111221051739-phpapp01/95/lean-what-is-it-and-how-does-it-work-22-728.jpg?cb=1324445291 Assessment 3 Guidelines
Executive Summary
In this section, you will need to provide a summarized version of your MGT603 Assessment 3 report in maximum 200 words.
Mainly this section of the assessment report is written after you have developed, written and completed your MGT603 Assessment 3 task.
NO REFERENCES in this section as this is the summarized version of your assessment report from your perspective and in your own words.
Please also keep in mind that in academia we mainly practice writing in the third person. For instance, instead of referring to yourself as I, me, my, and myself, it is highly advised to refer to yourself as The author, The writer, or The researcher.
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5
)
Table of Contents
Insert the Table of Contents in this section.
Simply Table of Contents is the list of all the numbered sections and sub-sections of the assessment/report with page numbers.
You can use Microsoft Word to insert the Table of Contents (TOC) automatically by defining headings.
Table of Contents is not included in the word count.
For Example the Table of Content (TOC) for MGT603 Assessment 3 should look like as follows:
Table of Contents
Executive Summary 1
Introduction/Background 3
Main Discussion 3
Identification and analysis of those System Archetypes that may impede performance 3
Analysis of the current State VSM of the emergency department based on System Archetypes 3
Recommend new State VSM with desired reduction in patient turnaround time 3
Discussion on intended and unintended consequences of the modified system 4
Conclusion 4
Recommendations 4
References 5
Appendices (if any) 5
Appendix A 5
Appendix B 5
1.
Introduction/Background
In this section introduce your assessment/report to the reader. Think of the purpose and objectives of your assessment and ask this question from yourself that why this assessment task is important? Overall, the Introduction section is about What the assessment is going to be about?
IMPORTANT NOTE:
Please keep in mind that MGT603 Assessment 3 is based on a hypothetical problem for a hypothetical public hospital.
Please make sure to highlight all the references for all the used information where required and necessary.
2.
Main Discussion
2.1.
Identification and analysis of those System Archetypes that may impede performance
In this section, you ONLY need to focus on those system archetypes which you believe they may impede the performance of the emergency department of this public hospital in its current situation. For this you will need to focus on the provided State Value Stream Map (VSM).
Please make sure to highlight all the references for all the used information where required and necessary.
2.2.
Analysis of the current State VSM of the emergency department based on System Archetypes
In this section, you will need to simply discuss and analyse what the current State VSM of the emergency department is indicating/showing based on the System Archetypes that you have already learnt in this subject. You will need to review your lecture notes about the System Archetypes.
Please keep in mind that you ONLY need to focus on those system archetypes which can help and support you to analyse the current state VSM.
Please make sure to highlight all the references for all the used information where required and necessary.
2.3.
Recommend new State VSM with desired reduction in patient turnaround time
Based on the above-mentioned discussions in sub-sections 2.1 and 2.2, in this section, you require to recommend your newly proposed State VSM which supports the emergency department of this public hospital with desired reduction in patient turnaround time.
IMPORTANT NOTE:
You will require to draw the newly proposed VSM (hand written or by your laptop and any application) and insert it here in this section as a Figure. Please keep in mind
that you will need to first introduce your new State VSM and then number and label (e.g. Figure 1: New Proposed State VSM ) them appropriately. Finally, you will need to explain and discuss the Figure in-detail and in-depth.
Please make sure to highlight all the references for all the used information where required and necessary.
2.4.
Discussion on intended and unintended consequences of the modified system
Based on the above-mentioned discussions and analysis
, highlight and discuss any intended or unintended consequences of the newly proposed State VSM on the emergency department.
Please make sure to highlight all the references for all the used information where required and necessary.
3.
Conclusion
The conclusion section is where you will need to wrap up your discussions in a clear and simple way. Please keep in mind that the Conclusion section is not a summary of the main points covered in your assessment but a synthesis of the main points.
In this section, you restate your aims/objectives and summarize the main findings and evidence for your reader. You can use academic phrases such as:
This assessment concludes .
In summary, this assessment argued that .
In conclusion, it would appear that .
Results provide a basis for and etc.
Overall, the Conclusions section reminds the reader what the paper has been about.
4.
Recommendations
In this section, you will need to recommend holistic solutions (2-3 recommendations) that will optimise the operations of the emergency department without compromising the performance of other functions of the hospital.
Please make sure to highlight all the references for all the used information where required and necessary.
5.
References
This is a research assignment and as such you are required to read and research widely.
A minimum of 7 references are required which
minimum 5 needs to be academic related references
(e.g. journal articles, books chapters, university resources, conference papers) and minimum 2 other references
(e.g. newspaper articles, industry reports, and etc.). Please make sure to list the used references in your report, alphabetically.
Make sure to use more recent references (from the last five years). It is essential that you use appropriate APA style (APA 6th Edition) for citing and referencing research.
References are not included in the word count.
6.
Appendices (if any)
IMPORTANT NOTE:
Please ONLY highlight anything which is EXTRA/ADDITIONAL to your assessment report in this section. Any important and necessary information, visuals (e.g. New proposed VSM) and Tables require being inserted WITHIN the document/report.
6.1.
Appendix A
6.2.
Appendix B
IMPORTANT NOTES:
Please submit ONE WORD DOCUMENT (.doc OR .docx) via the MGT603 Assessment 3 Section found in the Main navigation menu of the MGT603 Blackboard Site.
MGT603 Assessment 3 is an individual assessment and should be submitted by 11:55 PM AEST/AEDT Friday of Module 6.2 (Week 12).
This Assessment should be Maximum 2000 Words and is 40% of the final mark.
The Cover Page, Executive Summary, Table of Contents, References and Appendices are not included in the word count.
All Figures/Tables require being labelled and numbered appropriately.
All Figures/Tables require being initially highlighted and introduced and then discussed in-detail and in-depth.
The sources for the used information within the Figures/Tables require being clearly highlighted.
Please make sure to review the MGT603 Assessment 3 Brief and the Marking Rubric and be in touch with your Lecturers if any further clarification is required. (
8/1/2020
)
Welcome to
MGT603/MGMT6003
Systems Thinking
(
8/1/2020
)Module 5
(
Strategic
Planning
of
Operations
Methods
)
(
8/1/2020
)Module 5 Will Help in Achieving:
Analyse, select t and apply systems modelling tools in integrating, optimising and enhancing business operations within contemporary organisations.
Synthesise technological and non- technological solutions to business problems that promote integration and that optimise whole-of-enterprise operations.
(
8/1/2020
)Key Concepts in Module 5.1
Qualitative forecasting methods
Quantitative forecasting using patterns of demand
Long-range quantitative forecasting methods
Short-range quantitative forecasting methods
Selecting a forecasting method
(
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)Forecast is a prediction of future events, used for planning purposes.
Forecasts of future demand are needed at all levels of Organizational Decision Making
Operations managers need reliable estimates of the demand for goods and services.
Operations managers need estimates of the resources necessary to produce those goods and services and the time required to do so.
(
8/1/2020
)Forecasting Demand for Services is just as important as
Forecasting Demand for Manufacturing Products, especially when heavy capital investment is needed to provide those services.
For Example:
How could airlines plan their purchases of aeroplanes without forecasts of demand for air travel?
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)
(
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)Quantitative (Statistical)
Qualitative (Judgmental)
(
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)Quantitative Forecasting Methods Uses Historical data
and is based on assumptions that current trends will continue into the future.
This type of forecasting is based on the observation of a pattern in levels of demand over time. This pattern is known as a
time series.
(
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)There are 5 basic patterns of time series:
Historicalthis illustrates
an average level of demand
.
Trenda trend is
represented by an upward or downward slope
.
Cyclical
business cycles often span 4 to 8 years
, while life cycles vary widely in duration. It is difficult to quantitatively address this component because a sufficient data history is rarely available.
Seasonalthis
usually repeats annually, but could be based on a day, week or month.
Randomthe magnitude of this component means it
cannot be precisely forecast at a given time
. However, the significance of the random factor’s size can be observed, and it may be possible to predict the bounds of the random factor, which can help to determine the reliability of a forecast.
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)
Any forecast based on a pattern of demand relies on that pattern continuing in the future.
When using such forecasts it is important to identify the conditions that existed when the data were collected, and compare these against the conditions that now exist and those that are likely to exist in the future.
There are 2 factors that cause changes in the patterns
of demand for a particular product or service over time:
External Factors Internal Factors
(
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)Those factors that management cannot directly control.
Some economic factors, such as a booming economy, may influence demand, but their influence may not be equal for all products and services.
Other factors may positively affect one product while reducing the demand for another.
Those factors that are easier for management to control.
Examples include advertising and promotions to encourage customers to make purchases during off-peak demand periods, and developing products that have different seasonal peak demands in order to level production resource requirements.
(
8/1/2020
)Long-Range Quantitative Forecasting:
Involves timeframes for more than one year.
Statistical techniques are necessary to quantify probable future demand.
Three methods are used to conduct long-range forecasts:
1. Simple Leaner regression Analysis
Enables estimation of statistical relationships between variables.
It is a causal method that relates a dependent variable to one or more independent variables by linear equation.
The independent variables might be the external or internal variables that are assumed to affect demand.
2. Multiple Regression Analysis
Reflects the relationship between a dependent variable and two or more independent variable.
3. Coefficient of correlation
Is the statistical means of quantifying the relative importance of the relationship between two variables.
(
8/1/2020
)Short-Range Quantitative Forecasting:
Operations Managers also need to make short-term forecasts. For example, number of workers to schedule next week OR the amount of inventory to order for next month.
These events are not so much affected by trend patterns and cycles as by random or short-term factors.
Common methods in this regard are as follows:
1. Simple Moving Average
2. Weighted-moving Average
3. Exponential Smoothing Method
4. Adjusted Exponential Smoothing
(
8/1/2020
)Qualitative Forecasting:
When historical data is not available or current trends are likely to change. For example, if we need to forecast the length of time before a current technology becomes obsolete, we may base such a forecast on the opinions and expertise of people who are knowledgeable about changing technology.
Qualitative forecasting methods may also be used in combination with quantitative methods to adjust quantitative forecasts when their record of accomplishment is poor, when the decision maker has important contextual knowledge or to compensate for specific events.
Different methods are available such as:
1. Market Research
2. Surveys
3. Opinions
4. Delphi method
(
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)Qualitative
OR
Quantitative Forecasting Method?
(
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)Forecasting Method Selection:
Cost and accuracya trade-off is sometimes necessary between these two factors.
Data availablethis will determine which type of qualitative or quantitative forecasting method should be used.
Time spanlong-range forecasts have different factors to short-range forecasts.
Nature of products and servicesdifferent forecasting methods are appropriate for different products and services.
Impulse response and noise dampening the performance of the selected model must be continuously tracked because forecasting models differ in their impulse response and noise dampening capabilities.
Gaither and Frazier (2002, p. 9295)
(
8/1/2020
)Short-term Forecasts: Quantitative
time series methods are commonly used in the short-term as it is inexpensive
to generate large numbers of forecasts, and good quality results (minimal errors) can be obtained. Causal models are not used as extensively for short-term forecasts. Whilst they are more accurate than simple time series forecasts, they take more time to develop, they are less likely to be understood and used, and they require more training. Qualitative judgment methods are rarely used. They are too costly to apply to thousands of routine short-term forecasts.
Medium-term Forecasts: Quantitative time series methods should not be used for medium-term forecasts, as it is unlikely that existing patterns will continue very far into the future.
Causal models are most often used in the medium-term, as they are better at identifying turning points in trends. Qualitative judgment methods can also identify turning points and can be used when historical data are not available.
Long-term Forecasts: For long-term forecasts, aggregate demand for a product family expressed in homogeneous units, such as dollars of sales or tonnes of steel is more appropriate than forecasts for individual products or services.
Causal models (adjusted for judgment) and judgment methods are preferred for long-term forecasting.
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) (
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)
(
Module
5.1
Essential
Resources
)
(
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)
Min, H. and Wen-Bin, V.Y. (2008). Collaborative Planning, Forecasting and Replenishment: Demand Planning in Supply Chain
Management.
International Journal of Information Technology and Management, 7(1), 4-20.
Acar, Y. & Gardner, E.S. (2012). Forecasting method selection in a global supply chain.
International Journal of Forecasting, 28, 842-848.
Weatherford, L.R. & Kimes, S.E. (2003). A comparison of forecasting methods for hotel revenue management.
International Journal of Forecasting, 19, 401-405.
Rai. B. (2016). Introduction to forecasting With Examples. YouTube. Retrieved
from https:
//w
ww
.youtube.com/watch?v=98K7AG3
2qv8&feature=youtu.be
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) (
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)
(
Learning
Activities
)
(
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)Learning Activity 5.1
Please answer the following questions and discuss in the module 5 discussion forum.
1. Investigate the types of qualitative forecasting techniques used in your organisation. How do senior managers identify the appropriate forecasting technique to use in different circumstances? Do you think these techniques are used appropriately in your organisation.
2. Visit the website of the government statistician in your country to examine and discuss the past year’s breakdown (by month) of economic indicators. For example, Australian economic indicators can be found under Key Products on the Australian Bureau of Statistics website:
Australian Bureau of Statistics. (2018). Australian Bureau of Statistics. General site. Retrieved from
http://www.abs.gov.au
Comparative international statistics are provided with Australian economic indicators are also available from the OECD and ILO websites
Please place your answers to the above questions on the module 5 discussion forum. The recommended word count is 300 – 400 words. You may like to use images and diagrams. You are also welcome to include factors that may not be explicitly stated but which you believe fit within the context of the subject and are worthy of inclusion.
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) (
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)
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) (
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)
Week 9
Conclusion
(
8/8/2020
)
Welcome to
MGT603
Systems Thinking
Dr. Arezou PourMirza Subject Coordinator & Lecturer
(
8/8/2020
)Module 5
(
Strategic
Planning
of
Operations
Methods
)
(
8/8/2020
)Module 5 Will Help in Achieving:
Analyse, select and apply systems modelling tools in integrating, optimising and enhancing business operations within contemporary organisations.
Synthesise technological and non- technological solutions to business problems that promote integration and that optimise whole-of-enterprise operations.
(
8/8/2020
)Key Concepts in Module 5.2
Production Capacity
Capacity Planning Strategy
Capacity Planning Decisions
(
8/8/2020
)
Capacity Planning is a crucial element of operations
strategy because it has major
cost
and
operational implications
.
(
8/8/2020
)Capacity Decisions are:
Made when there is uncertainty about future demand.
Depend on the growth (or decline) of demand for products/services.
Aimed at using an organization’s resources to maximize long-term profit while meeting cash-flow requirements.
The cost of potential excess capacity must be balanced against the cost of potential lost sales due to too little capacity.
Excess capacity costs money, especially for capital-intensive organisations (e.g. paper mills, utilities and steel mills). However, too little capacity can result in the inability to meet customer demand, particularly in service industries. Tight capacity does allow for higher equipment utilisation and a better return on investment.
(
8/8/2020
)Four activities that are relevant to Capacity Planning Decisions:
Estimating the capacities of the present facilities.
Forecasting the long-range future capacity needs for all products and services.
Identifying and analysing sources of capacity to meet future capacity ne
