engleski

POTENTIAL APPLICATIONS OF SYSTEM DYNAMICS TO OPTIMIZATION OF PRODUCTION CAPACITIES - TWO DEMAND SCENARIOS

This paper examines potential applications of system dynamics in the process of managing organizational adjustments. With a view to simplify the situation of a manufacturing company which bases its operations on market demands and optimization of its capacities, a system-dynamics model was designed and simulations were performed on the basis of relatively standard assumptions. The system dynamics model is composed of two components, while simulations involve basic scenarios of important business decisions - primarily those relative to the change of product prices. It is shown that in the situation where a manufacturer pursues different levels of adjustments to customer needs by cutting down the prices of his products - this model creates specific requirements for the modification of production capacities in a given period. The changing of production capacities has both positive and negative character. The flexibility of the capacities and the implementation of necessary changes should ensure the desired effectiveness. Preparations of and timely interventions into the capacities may pave the way for achievement of a competitive advantage. In conclusion, when it comes to certain business activities or particular segment of an enterprise, and definitely where there is a possibility to make fast, cheap and relatively error-free changes to the levels of production capacities, the application of system-dynamics simulations may be useful when preparing future optimization requirements.

demand; flexibility; model; production capacities; scenario; simulation; system dynamics

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