Theory of Constraints and System Dynamics for Decision Making in Operations Management

Author(s):  
Andreas Größler
2021 ◽  
Author(s):  
Vishal Ahuja ◽  
Carlos A. Alvarez ◽  
John R. Birge ◽  
Chad Syverson

The U.S. Food and Drug Administration (FDA) regulates the approval and safe public use of pharmaceutical products in the United States. The FDA uses postmarket surveillance systems to monitor drugs already on the market; a drug found to be associated with an increased risk of adverse events (ADEs) is subject to a recall or a warning. A flawed postmarket decision-making process can have unintended consequences for patients, create uncertainty among providers and affect their prescribing practices, and subject the FDA to unfavorable public scrutiny. The FDA’s current pharmacovigilance process suffers from several shortcomings (e.g., a high underreporting rate), often resulting in incorrect or untimely decisions. Thus, there is a need for robust, data-driven approaches to support and enhance regulatory decision making in the context of postmarket pharmacovigilance. We propose such an approach that has several appealing features—it employs large, reliable, and relevant longitudinal databases; it uses methods firmly established in literature; and it addresses selection bias and endogeneity concerns. Our approach can be used to both (i) independently validate existing safety concerns relating to a drug, such as those emanating from existing surveillance systems, and (ii) perform a holistic safety assessment by evaluating a drug’s association with other ADEs to which the users may be susceptible. We illustrate the utility of our approach by applying it retrospectively to a highly publicized FDA black box warning (BBW) for rosiglitazone, a diabetes drug. Using comprehensive data from the Veterans Health Administration on more than 320,000 diabetes patients over an eight-year period, we find that the drug was not associated with the two ADEs that led to the BBW, a conclusion that the FDA evidently reached, as it retracted the warning six years after issuing it. We demonstrate the generalizability of our approach by retroactively evaluating two additional warnings, those related to statins and atenolol, which we found to be valid. This paper was accepted by Vishal Gaur, operations management.


2019 ◽  
Vol 39 (1) ◽  
pp. 164-186 ◽  
Author(s):  
Xue Li ◽  
Lucy Gongtao Chen ◽  
Jian Chen

PurposeThe purpose of this paper is to investigate cultural and individual differences in newsvendor decision making.Design/methodology/approachThe online experiment, programmed in the PHP scripting language, had 107 participants: local managers of four large, well-known and supply chain–intensive firms in China (Lenovo, Shenhua, CMST and GM).FindingsThe authors find that, as compared with American subjects, Chinese subjects engage in more demand chasing, order quantities that are closer to the mean demand, have a lower expected profit and exhibit greater variance in order quantities. However, these observations may not hold when the cross-cultural comparison is conducted for each pair of ethnic subgroups whose members have the same cognitive reflection test score, a measure of individual differences. Moreover, cultural differences also affect how individual differences manifest in newsvendor decisions.Practical implicationsThe authors findings have important implications for employee selection, training and management in any cross-cultural business environment.Originality/valueLittle attention has been paid, in the behavioural operations literature, to individual differences and how they interact with culture. This paper is the first to examine the interaction effects of cultural and individual differences in newsvendor decisions, and it highlights an important research area that is currently understudied in operations management.


2004 ◽  
Vol 14 (2) ◽  
pp. 259-272 ◽  
Author(s):  
P. Georgiadis ◽  
D. Vlachos

Reverse logistics is a modern field of consideration, research and study, providing helpful information on the operation of the closed-loop supply chain. Although the starting point of this field is traced back to the early 90?s, no standard method has been suggested, neither prevailed. The purpose of this paper is to introduce a new approach on the study of reverse logistics. It is actually a review on how System Dynamics (SD) can be a helpful tool when it is used in the reverse logistics field. The paper explains the basic theory of the system modeling and next it utilizes the reverse logistics model. Finally, an illustrative example shows how SD modeling can be used to produce a powerful long-term decision-making tool.


2021 ◽  
Author(s):  
◽  
Edward Johnson

<p><b>The gold mining industry in Ghana is characterised by complexity in terms of its extended/sequential operations, its system-wide reach, its multiple stakeholders, and the variety of formal and informal organisations that constitute the industry. Perceptions of the industry differ considerably amongst stakeholders, depending on their stakes and interests, knowledge, understanding, involvement and agency within or without the sector. Studies of the industry to date have overlooked these diverse viewpoints and used limited-scope, single-frame analyses. However, they have highlighted wide-ranging industry issues that impact the diversity of stakeholders, which could benefit from a fuller and more comprehensive analysis.</b></p> <p>This study addresses this need by adopting a multi-framing systems-based approach. Data was examined and analysed through a variety of systems-based lenses and frames, including a stakeholder analysis (SA) frame, a causal loop modelling (CLM) frame, supply chain analysis (SCA) frame and the Theory of Constraints (TOC) Thinking Processes analytical frames lenses. First the Current Reality Tree (CRT) tool of the Theory of Constraints (TOC) was used to synthesise information from the literature examined, providing an initial provisional CRT model. Interview data was collected by sharing and seeking feedback to the CRT model at multiple levels of the industry, giving voice to stakeholders throughout the sector. Subsequent analysis used all the modelling frameworks mentioned above in a multi-framing analysis.</p> <p>In particular, the evaporating cloud (EC) tool from TOC was used to structure and develop potential solutions to conflict highlighted by the literature review, the SA, SCA and CLM. Building on this, a final CRT was developed, and a goal tree (GT) used to design the desired future whilst employing the future reality tree (FRT) to test the plausibility of solutions from the EC to deliver the desired future. The prerequisite tree (PRT) was then used to identify obstacles and intermediate objectives that must be overcome for successful transition to the desired future.</p> <p>Insights from the research shows a desire by multi-national large scale-gold mining companies and government alike to minimise adverse impacts and maximise the sector’s outcomes for key stakeholders, including those at the community level. However, the research has documented many instances of actions taken to address issues and improve outcomes that have instead resulted in unresolved dilemmas and paradoxes, failing to achieve desired outcomes.</p> <p>A number of factors have been identified as being responsible for these situations. Key amongst them is a limited understanding to deliver desired outcome for stakeholders without compromises, a focus on short-term goals, no collective effort, and arms-length/win-lose relationships amongst the Ghanaian stakeholders of the industry.</p> <p>The study’s concluding findings and results allow decision makers to benefit significantly from the study through its recommendations and showcasing of tools that may allow them to make sound decisions and address endogenous and exogenous cause-effect relationships limiting desirable outcomes from actions taken.</p> <p>Theoretical and knowledge-based contributions are made by conceptualising and offering evidence for three key factors or dimensions that can explain a significant number of issues limiting desirable outcomes for stakeholders of the gold mining industry. These include difficulty to transition from theory (espoused aims) to practice, a relative focus on local optima (silo thinking), poor monitoring (lack of evaluation), and a control culture. Methodological contributions are made by demonstrating the application of a multi-framing approach in a more organic and iterative manner as opposed to its use in a designed sequence, working down through layers of various systemic levels of an industry (in this case, the gold mining industry in Ghana). By so doing, the study builds on and extends the practicality of the multi-framing approach and stimulates further research in the field.</p> <p>In terms of its contribution to practice, the study provides Government, political and mining sector policy decision makers, and other interested actors, with a platform for understanding the sector in order to support their decision making about the industry to ultimately improve outcomes for key stakeholders. In particular, the study allows mining sector policy decision makers and other stakeholders to recognise complexity, uncertainty and conflicts that are embedded in the mining system and in their everyday decision-making activities about the industry. It also allows these stakeholders to become more aware that such issues can be addressed and improved by identifying and focusing on one or few underlying causes.</p> <p>This thesis draws on systems-based frameworks drawn both from functional management, for example, the supply chain and value chain frameworks of operations management and the stakeholder framework of strategic management, and from the broad domain of systems thinking (ST) and systems-based methodologies; and then focuses on the intersection of these frameworks in relation to the gold mining sector in Ghana. Due to the wide range of techniques applied, none are over-explored, creating potential for further research. On the other hand, with regard to explanations, depending on background, practitioners, and researchers familiar with some techniques may consider those sections over-explained. The researcher has sought a balance for the purpose of this study. Whilst limiting the scope of this work has been necessary in the context of doctoral study, topics ripe for future research are set out in the conclusion.</p>


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marcilio Andrade ◽  
Dermeval Carinhana Jr

Purpose This purpose of this study is to structure complex problems to be solved with greater efficiency, optimising the relationship between root causes (RC) relevance of the problem and utilisation of human resources to treat them, minimising the use of manpower in problem-solving activity and thus contributing to greater productivity within organisations. Design/methodology/approach The authors built an approach under the concepts of theory of constraints and multiattribute and multiobjective decision-making methods that were applied in a real complex problem of the low development of Brazilian space industry, by theoretical perspective. Also, the authors submitted it in a simulation environment to assess in which situations it is successful considering number of problem’s RC, system complexity and number of people in the system. Findings The approach was successful on the real case, finding the optimal relationship between the RC relevance and the number of people involved to treat them. For certain complex problem inputs configurations, simulation results reveal that the approach is reliable obtaining more than 95% chance of success in finding the optimal relationship, when comparing with traditional prioritising methods. Originality/value This approach introduces an unprecedented way to locate and evaluate non-physical constraints within a system, which is used to determine RC relevance, as well as an unprecedented way of defining a single optimal solution for structuring a problem, considering the relevance of RC and the use of human resources. The approach is useful for organisations in general which often need managing complex problems with few resources.


Author(s):  
Alireza Hassanzadeh ◽  
Hoda Eskandari

In its reality, the world is more complex than we expect it to be predicated and controlled; so, by minor view to issues and suppose many phenomena to be independent, it would be impossible to understand their totality and complexity. Utilizing appropriate scientific tools can provide us with useful information to manage decision making to improve methods to carry out operations and apply resources; one of these scientific tools is system dynamics approach. Therefore, based on stages in the methodology of system dynamics and by taking experts comments, in the present study, causal relations between influential factors in improvement of customs service are identified. So, by knowing these causal relations, one can allocate resources and prioritize activities leading to influence on other factors following with the best results. Finally, after validation and having the confirmation of the experts, the researcher has presented a causal model to improve customs services.


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