Production Management of Cooperative Organizations

1. Production Management of Cooperative Organizations July 4, 2000 Young K. Ko

2. Production planning with multiple objectives in decentralized organizations Carsten Homburg Chair of Operations Research, University of Mannheim, Germany 1998, IJPE

3. Introduction • MODM problem considering “Management Hierarchy” of a firm. • It takes into account the top management preference by introducing “weight restrictions” • 전체 조직을 총괄하는 Top management의 추구하는 바와, 각각의 부서 조직에서 추구하는 바가 상충되는 부분이 있을 수 있다. 이러한 문제를 해결하기 위해 Top management의 Objective와 각 Division의 Objective를 모두 추구하는 MODM을 고려한다. • Ex) • 전체회사의 관점에서는 전체 회사의 Profit을 최대화하는 계획을 원한다. • 각 부서의 입장에서는 각 부서의 성과평가를 고려하여 보다 각 부서의 목표 (i.e 생산량, 비용)가 극대화되기를 원한다. • 위의 두 목표는 상충될 수 있다.

4. Model • linear program with multiple objectives Top Management ‘s Goal Divisional Goal Common Resource Capacity Constraint Local Resource Capacity Constraint

5. Model • Because of common resources, the problem can not be decomposed completely. • Within the coordination process the top management has to find a (feasible) resource allocation bTs with respect to the scare resources bT. • For each division, a performance standard zTs consisting of aspiration levels for the central goals has to be determined. • Then, production planning problem can be decomposed into two problem types : TOP, and DIV • TOP : top management decision • DIV : Divisional Decision DIV = ORG +

6. The coordination process

7. The coordination process • Main idea is an iterative process • Top management gives down resource allocations and performance standards. • Each division reports the corresponding use of resources and the corresponding performance with respect to the goals of the top management. Top Management Each Division

8. Information Exchange Top Management Each Division

9. Initialization Phase top management determines minimal and maximal resource allocations divisional managers determines their ideal and pessimistic goal values top management determines weight restrictions WTs(divisional managers may participate) Execution Phase divisional manager solve DIV top management gives down new instructions and/or new weight restrictions WTs top management solves TOP actual instructions (resource allocation and performance standards) become final top management is satisfied with overall performance

10. Conclusion • Production planning problem for decentralized organization with multiple objectives. • Single product production planning problem • 한 회사의 여러 부서의 수행도가 따로 평가 받는 조직의 경우, 회사전체의 목표와 부서의 목표를 동시에 목적함수로 가지는 MODM문제로 보아 해결할 수 있음. • 한 회사 내에서의 여러 조직에 대해서 뿐만 아니라 계약에 의해 맺어진 여러 회사들로 이루어진 가상조직에서도 이용될 수 있음.