1. By
Praveen Sidola
1021026
Lean Operation & System
Overproduction
For the completion of the assignment I reviewed two article on Overproduction
Micro prospective & totally cost benefit oriented (Cheatham, 1989)1
Macro Prospective, (KAJII, 2009)2
I feel zeroed of following findings
Over-production
Overproduction occurs when more products is produced than is required at that time by
customers. One common practice that leads to this muda is the production of large batches, as
often consumer needs change over the long times large batches require. Overproduction is
considered the worst muda because it hides and/or generates all the others. Overproduction
leads to excess inventory, which then requires the expenditure of resources on storage space
and preservation, activities that do not benefit the customer but manufacturer point of view
some issue has to identified & rectified accordingly.
1) - Strategic Issue
1.1) - Appropriate Forecasting model & demand estimation
With the help of proper demand estimation the volume of production can controlled for
which appropriate forecasting model is needed.
1.2) - Push & Pull Model of business & market requirement
Business nature is also a critical factor for example if there is a commodity business there is
always excess quantity is needed neither opportunity cost is very high, so it should be celery
identify the business is Push Or Pull
1
Cheatham, C. (1989, NOVEMBER). REPORTING THE EFFECTS OF EXCESS
INVENTORIES. Retrieved from JOURNAL OF ACCOUNTANCY.
2
KAJII, A. (2009, March 1). SUNSPOT EQUILIBRIA IN A PRODUCTION ECONOMY: DO
RATIONAL ANIMAL SPIRITS CAUSE OVERPRODUCTION. Retrieved from The Japanese
Economic Review.

2. 2) - Operational Issue
2.1) - Theory of constraint
2.2) - Optimum batch quantity model for a lean production system
2.3) - Trade off between change management & over product inventory
2.4) - Economic Order Quantity
3) -Opportunity Cost
3.1) - Inventory Holding Cost
Finished goods holding cost play a very significant role in the price decision so
3.2) - Perishability & absolution of the finished product
Nature of finished goods wills also a considerable factor to determine the production quantity
4)-Technology Involvement
4.1) - RFID System implementation
4.2) - ERP
4.3) - JIT implementation
4.4) - Real Time Flow of information among all channel partners