Excel Models for Business and Operations Management
Chapter One
A systems view of business
OVERVIEW
This textbook develops models for various aspects of business and operations management.
In order to illustrate how the activities of a typical manufacturing business are interrelated,
a systems approach is now presented. The systems approach provides an overall view of an
organisation's activities whereby an organisation is separated into identifiable subsystems or
departments. All such departments are interdependent and perform specific tasks of work
which contribute to the organisation's goals. The simplest model of a business system consists
of three basic elements, namely inputs, processes, and outputs (Figure 1.1). Output information
is used as a control mechanism-normally called a feedback loop-to correct deviations from
planned performance.
For example, consider a bakery. The inputs consist of the raw materials that are used to
make bread, namely flour, yeast, and water. The actual process is the baking, performed in an
oven in which the ingredients are converted into outputs, i.e., bread. In this case, the process
is controlled by monitoring the oven's output, i.e., temperature. A temperature feedback loop
thus ensures that t ... read full excerpt from Excel Models for Business and Operations Management ebook
