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A Study of Behavioral Signs on the Decision-making in Annual Production Planning

Author: WangYue
Tutor: ZhouShuiYin
School: Huazhong University of Science and Technology
Course: Management Science and Engineering
Keywords: Behavioral Operations Management Annual Production Planning Learning by Doing Anchoring Short-term Behavior
CLC: F273
Type: Master's thesis
Year: 2010
Downloads: 46
Quote: 0
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Abstract


When making the annual production planning, it will be affected by many factors. Firstly, it is very necessary to consider the restrictions of the basic indicators, such as the variety, output, quality and deadline of the product; Secondly, the uncertainty of market demand, the constraints of production capacity, inventory and other related costs, the decision-makers’ capabilities of demand forecasting and their behavior are all the key factors in the process of making annual production planning. This thesis will focus on the behavior of decision-maker and try to fix out how it affect decisions in the make-to-stock enterprises.First, this thesis proposes three hypotheses: with increasing experience, the total cost of annual production planning will reduce; while making the annual production plan, the decision-maker will anchor the production quantity around the reference quantity, and fluctuate around the reference value; short-term behavior will influence the annual production planning, and results in higher total costs. Then we simulate the process of making annual production planning through two experiments. After analyzing the experimental data, we get the conclusion: the improvement of experience will reduce the accumulated costs; there exist anchoring effect in the process of making the annual production planning, and the anchoring effect would affect the level of decisions; there also exists some short-term behavior, and these will increase the total cost. All of these verify the previous assumptions.Finally, based on the analysis of the learning by doing, anchoring effects and short-term decisions in the annual production plan, we respectively propose some suggestions. By improving the cognitive ability and reducing negative behavior of decision maker, we want to support scientific decision-making for the enterprise.

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CLC: > Economic > Economic planning and management > Enterprise economy > Production management
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