Customs Clearance Agency and Process
Any Organization that is engaged in Imports or Exports would require the services of third party Customs Clearance Agent as well as a Freight Forwarder. While freight forward manages the transportation part of the exports and imports, customs clearance and the approval and co-ordination with the rest of the regulatory authorities to affect the imports […]
Operational Challenges in Inventory Management
The latest trend in all industries has been to outsource inventory management functions to Third Party Service providers. Companies outsource both Raw Material Inventory as well as Finished Goods to the Service Provider. In case of finished goods inventory, depending upon the supply chain design, there may be multiple stocking points at national, regional and […]
Contract Logistics Pricing Methods
Warehousing and Contract Logistics forms an important part of Supply Chain Networks. Contract Logistics projects are of two kinds. The first being a flow through the warehouse that can be a Finished Goods warehouse for the purpose of consolidation and merging or documentation purposes or in the case of supplier shipments, inventories being consolidated to […]
Types of Inventories – Independent and Dependant Demand Inventories
Inventory Management deals essentially with balancing the inventory levels. Inventory is categorized into two types based on the demand pattern, which creates the need for inventory. The two types of demand are Independent Demand and Dependant Demand for inventories. Independent Demand An inventory of an item is said to be falling into the category of […]
The Fight over Rare Earth Minerals
The fight between China and the United States has gone to the next level. Up until now, the United States had been flexing its muscles, trying to beat China into submission. However, backed up in a corner, China has also decided to respond ferociously. The country has decided to escalate the trade war by threatening […]
Decision making is crucial for survival of business. Businesses have to make decision considering the limited amount of information. Decision making problems are divided into two types deterministic and probabilistic.
Deterministic model of problem solving depends on the relationship between uncontrollable factors and continuing process of optimizing system performance. A model is developed in under assumption related to existing business condition. If the variables under assumption do not truly reflect the current business conditions, the model developed also will not reflect the reality.
Mathematical optimization utilizes mathematical equation to determine the business decision. The business decision derive is in a numerical form.
A business model for decision making is constructed by analyst based on inputs of a decision maker. A business model is developed over a period of time using a progressive approach method.
Optimization model is developed in three steps, 1st step is describing the problem, 2nd step is elaborating the solution and 3rd step is controlling the problem.
The optimized problem of the 1st step can be classified into linear and non-linear depending upon on nature of variables. Optimization problem has three following aspects:
The solution of optimized problem satisfying all parameters and constraints is referred as feasible solution. The objective of an optimization process is to value of variables, which minimize or maximize objective giving out an optimal solution.
Linear programming is a mathematical procedure of determining linear allocation of business variables. For constructing linear program following factors are essential:
In formulating a linear program certain variables are integer in nature, such as function with integer variable is known as integer programming.
In a certain decision-making process, probability plays an important role. On the decision model based upon probability is decision trees.
Business environment is always unpredictable and can throw up unusual situation more than often. Thus, organizations find themselves in the middle of dynamic environment. Here model and methods like sensitivity analysis, stability analysis, what-if analysis, scenario modeling, etc. is utilized.
Therefore, model under used uncertainties are as follows:
Theory of constraints is a management concept which helps organization deal with situation, which hampers its growth and march towards higher level of performance. Theory of constraint encourages an organization to deal one constraint at a time and consist of following steps:
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