do we have to be exact about Yield Rate?
This was sent to me, but it also reflects a couple of conversations after class.
While this person is technically correct we will also allow the other interpretation.
If your case for recommendation in this case rests on the small differences between the approximate and precise methodologies, then you are making a flawed approach.
This illustrates a key difference between project management and operational management. In PM, you have to plan for all the variables in an approximate way. In ops, the situation is controlled, some variables are eliminated, so that the remaining aspects can be controlled exactly.
"What is Yield Rate?"
"Yield rate is the number of sale quality items that the factory can produce. In this case, 90% - which means that it has to make 10% extra to achieve its target / meet demand."
That seems a bit contradictory. Say I need to make 100 units. If 90% of what is output is saleable, then I would need to make 100/0.9 = ~111.11 units.
But if I make instead 10% extra I would end up with 110*0.9 = 99 saleable units.
Can you please clarify this for me? Is the yield rate not meant to directly apply in the way I have done?
While this person is technically correct we will also allow the other interpretation.
If your case for recommendation in this case rests on the small differences between the approximate and precise methodologies, then you are making a flawed approach.
This illustrates a key difference between project management and operational management. In PM, you have to plan for all the variables in an approximate way. In ops, the situation is controlled, some variables are eliminated, so that the remaining aspects can be controlled exactly.
posted by Matt at
08:49
3 Comments:
Thanks Matt - that's exactly right.
There is a footnote on Page 3 of the case study which tells students what it means and how to interpret it for calcualtion purposes (for simplicty, or so I thought!).
So I can't see why all the queries.
But I'll accept either interpretation.
By
SuperJane, at 21/2/07 09:13
Hi,
I was wondering if the yield rate could also be interpreted as thus;
'If the target is to produce 100 units and the factory has a yield rate of 90% (a shortfall of 10%), could it be that there has to be an increase of 10% in all inputs (raw materials, labour, power etc.) to make up for the shortfall and meet the target of 100.'?
By
Anonymous, at 25/2/07 22:23
Yes, that's fine.
By
Matt, at 26/2/07 10:31
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