CHAPTER 18
Dynamic Characteristics of a Customer-Producer- Employment System

Section 18.1 of this chapter examines the dynamic behavior of the system described in Chapter 17. Variations in system parameters are tested in Section 18.2 to determine the policies to which the system is most sensitive. In Sections 18.3 through 18.7 changes in system organization and policies are made to improve the stability of employment, cash position, backlog variation, and delivery delay without requiring larger inventories or inventory fluctuations.

CHAPTER 17 described a case study and developed a model of the practices that had seemed to exist previously within an industrial system. In this chapter we shall first examine the characteristics of the model system that was developed in Chapter 17, to see if its behavior is a reasonable representation of the actual system described in Sections 17.1, 17.2, and 17.3. After that we shall alter certain of the assumptions in the model that was developed in Section 17.4, to see how sensitive the system is to the management policies that were initially included. Then some of the policies of the model will be modified to obtain an improved management system, and the characteristics of the new system will be compared with those of the old.


18.1 The Old System

As in Chapter 15, we shall first test the system under idealized inputs for the insights these will give us into the dynamic character of the system. These will first be a step change in the level of ordering rate entering the customer sector and then a periodic fluctuating change. After that, the effect of random variation at the engineering department output of the customer will be examined.

18.1.1 Step Change in Demand. To obtain a first indication of the kind of system with which we are dealing, a sudden step input will be used. From this we should be able to see if there are any predominant natural frequencies that die out only slowly. If there are, we can form an estimate of their period and also of rate of attenuation, or if the system is unstable, their rate of expansion in amplitude.

Figure 18-1 shows a 10% step input to the independent ordering rate entering the customer sector of the model.1 The system shows a periodic fluctuation in response to the step input. The period of this fluctuation is about 100 weeks, with manpower peaks appearing at 68 weeks, 168 weeks, and 266 weeks.2

____________________
1
This is obtained by setting STT1 = 8 weeks and STH1 = 100 units/week in the input parameters of Section 17.6. This means that at the 8th week the independent-order input will rise 100 units per week, which is a value of 10%. See Figure 17-14 for the point of input, and Figure 17-17 for the input flow diagram.
2
Many of the numerical values given in the text have been taken from the tabular print-out of results of model runs and may not be readable from the figures included here.

-253-

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