Operations Management

In the 5th Edition of Operations Management, Dan Reid and Nada Sanders have strengthened their commitment to improve the teaching and learning experience in the introductory operations management course. The text provides a solid foundation of Operations Management with clear, guided instruction and a balance between quantitative and qualitative concepts. Through an integrated approach, the authors illustrate how all business students will interact with Operations Management in future careers. And, with increased support for students through new pedagogy, worked out examples and WileyPLUS, the 5th Edition provides the help students need to complete the course with greater success. WileyPLUS sold separately from text.

Table of Contents:
CHAPTER 1 Introduction to Operations Management 1 WHAT IS OPERATIONS MANAGEMENT? 2 Links to Practice: The E-tailers 4 DIFFERENCES BETWEEN MANUFACTURING AND SERVICE ORGANIZATIONS 5 Links to Practice: U.S. Postal Service 6 OPERATIONS MANAGEMENT DECISIONS 7 Links to Practice: Texas Instruments Incorporated 9 PLAN OF THIS BOOK 10 HISTORICAL DEVELOPMENT 11 Why OM? 11 Historical Milestones 11 The Industrial Revolution 12 Scientific Management 13 The Human Relations Movement 14 Management Science 14 The Computer Age 15 Just-in-Time 15 Total Quality Management 15 Business Process Reengineering 16 Flexibility 16 Time-Based Competition 16 Supply Chain Management 16 Links to Practice: The Publishing Industry 17 Global Marketplace 18 Sustainability and Green Operations 18 Electronic Commerce 18 Outsourcing and Flattening of the World 19 TODAY’S OM ENVIRONMENT 20 OPERATIONS MANAGEMENT IN PRACTICE 21 WITHIN OM: HOW IT ALL FITS TOGETHER 21 OM ACROSS THE ORGANIZATION 22 THE SUPPLY CHAIN LINK 24 THE SUSTAINABILITY LINK 24 Chapter Highlights 25 Key Terms 25 Discussion Questions 25 CASE: HIGHTONE ELECTRONICS, INC. 26 CASE: CREATURE CARE ANIMAL CLINIC (A) 26 INTERACTIVE CASE: VIRTUAL COMPANY 27 INTERNET CHALLENGE 28 ONLINE RESOURCES 28 Selected Bibliography 28 CHAPTER 2 Operations Strategy and Competitiveness 29 THE ROLE OF OPERATIONS STRATEGY 31 The Importance of Operations Strategy 31 DEVELOPING A BUSINESS STRATEGY 32 Mission 32 Environmental Scanning 33 Core Competencies 35 Putting It Together 36 Links to Practice: Dell Computer Corporation 36 DEVELOPING AN OPERATIONS STRATEGY 37 Competitive Priorities 37 Links to Practice: Southwest Airlines Company 38 Links to Practice: FedEx Corporation 40 The Need for Trade-Off s 40 Order Winners and Qualifiers 41 Translating Competitive Priorities into Production Requirements 42 STRATEGIC ROLE OF TECHNOLOGY 43 Types of Technologies 43 Technology as a Tool for Competitive Advantage 44 PRODUCTIVITY 44 Measuring Productivity 44 Interpreting Productivity Measures 47 Productivity and Competitiveness 47 Productivity and the Service Sector 48 OPERATIONS STRATEGY WITHIN OM: HOW IT ALL FITS TOGETHER 48 OPERATIONS STRATEGY ACROSS THE ORGANIZATION 49 THE SUPPLY CHAIN LINK 49 THE SUSTAINABILITY LINK 50 Chapter Highlights 50 Key Terms 51 Formula Review 51 Solved Problems 51 Discussion Questions 52 Problems 52 CASE: PRIME BANK OF MASSACHUSETTS 53 CASE: BOSEMAN OIL AND PETROLEUM (BOP) 54 INTERACTIVE CASE: VIRTUAL COMPANY 54 INTERNET CHALLENGE 55 ONLINE RESOURCES 55 Selected Bibliography 56 CHAPTER 3 Product Design and Process Selection 57 PRODUCT DESIGN 59 Design of Services versus Goods 59 THE PRODUCT DESIGN PROCESS 60 Idea Development 60 Links to Practice: IBM Corporation 61 Product Screening 62 Preliminary Design and Testing 64 Final Design 64 FACTORS IMPACTING PRODUCT DESIGN 65 Design for Manufacture 65 Product Life Cycle 66 Concurrent Engineering 67 Remanufacturing 68 PROCESS SELECTION 68 Types of Processes 68 DESIGNING PROCESSES 72 PROCESS PERFORMANCE METRICS 74 LINKING PRODUCT DESIGN AND PROCESS SELECTION 77 Product Design Decisions 78 Links to Practice: The Babcock & Wilcox Company 78 Competitive Priorities 79 Facility Layout 79 Product and Service Strategy 81 Degree of Vertical Integration 81 TECHNOLOGY DECISIONS 82 Information Technology 82 Links to Practice: Using GPS Technology in Product Advertising 83 Automation 83 Links to Practice: Performing Robotic Surgery 85 e-Manufacturing 86 DESIGNING SERVICES 87 How Are Services Different from Manufacturing? 87 How Are Services Classified? 88 The Service Package 89 Differing Service Designs 90 PRODUCT DESIGN AND PROCESS SELECTION WITHIN OM: HOW IT ALL FITS TOGETHER 91 PRODUCT DESIGN AND PROCESS SELECTION ACROSS THE ORGANIZATION 92 THE SUPPLY CHAIN LINK 93 THE SUSTAINABILITY LINK 93 Chapter Highlights 94 Key Terms 94 Formula Review 95 Solved Problems 95 Discussion Questions 97 Problems 97 CASE: BIDDY’S BAKERY (BB) 99 CASE: CREATURE CARE ANIMAL CLINIC (B) 100 INTERACTIVE CASE: VIRTUAL COMPANY 100 INTERNET CHALLENGE 101 ONLINE RESOURCES 101 Selected Bibliography 101 CHAPTER 4 Supply Chain Management 103 WHAT IS A SUPPLY CHAIN? 104 COMPONENTS OF A SUPPLY CHAIN FOR A MANUFACTURER 106 External Suppliers 106 Internal Functions 108 External Distributors 108 THE BULLWHIP EFFECT 108 Causes of the Bullwhip Effect 109 Counteracting the Bullwhip Effect 110 SUPPLY CHAINS FOR SERVICE ORGANIZATIONS 110 Internal Operations 111 The External Distributors 112 MAJOR ISSUES AFFECTING SUPPLY CHAIN MANAGEMENT 112 Information Technology 112 E-Commerce 112 Business-to-Business (B2B) E-Commerce 113 The Evolution of B2B Commerce 113 The Benefits of B2B E-Commerce 114 Business-to-Consumer (B2C) E-Commerce 114 Consumer Expectations and Competition Resulting from E-Commerce 115 Links to Practice: Lands’ End, Inc. 115 Globalization 116 Government Regulations and E-Commerce 118 Green Supply Chain Management 118 Infrastructure Issues 121 Product Proliferation 122 THE ROLE OF PURCHASING 122 The Traditional Purchasing Process 122 The E-purchasing Process 124 SOURCING ISSUES 127 Insourcing versus Outsourcing Decisions 128 Developing Supplier Relationships 130 How Many Suppliers? 130 Developing Partnerships 131 Links to Practice: The Bama Companies 132 Critical Factors in Successful Partnering 133 Links to Practice: Sweetheart Cup Company/ Georgia-Pacific Corporation 133 Benefits of Partnering 135 Ethics in Supply Management 136 SUPPLY CHAIN DISTRIBUTION 137 The Role of Warehouses 137 Links to Practice: Fingerhut Direct Marketing, Inc. 138 Crossdocking 139 Links to Practice: FedEx Freight 139 Radio Frequency Identification Technology (RFID) 141 Third-Party Service Providers 142 IMPLEMENTING SUPPLY CHAIN MANAGEMENT 143 Strategies for Leveraging Supply Chain Management 144 SUPPLY CHAIN PERFORMANCE METRICS 145 TRENDS IN SUPPLY CHAIN MANAGEMENT 147 SUPPLY CHAIN MANAGEMENT WIHTIN OM: HOW IT ALL FITS TOGETHER 149 SCM ACROSS THE ORGANIZATION 149 THE SUPPLY CHAIN LINK 150 THE SUSTAINABILITY LINK 150 Chapter Highlights 151 Key Terms 152 Formula Review 152 Solved Problems 152 Discussion Questions 153 Problems 154 CASE: ELECTRONIC POCKET CALENDARS SUPPLY CHAIN MANAGEMENT GAME 155 CASE: SUPPLY CHAIN MANAGEMENT AT DURHAM INTERNATIONAL MANUFACTURING COMPANY (DIMCO) 157 INTERACTIVE CASE: VIRTUAL COMPANY 158 INTERNET CHALLENGE 158 ONLINE RESOURCES 159 Selected Bibliography 159 CHAPTER 5 Total Quality Management 161 DEFINING QUALITY 162 Differences between Manufacturing and Service Organizations 163 Links to Practice: General Electric Company/Motorola, Inc. 164 COST OF QUALITY 165 THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM) 166 Quality Gurus 167 THE PHILOSOPHY OF TQM 171 Customer Focus 171 Continuous Improvement 171 Employee Empowerment 173 Links to Practice: The Walt Disney Company 174 Use of Quality Tools 174 Links to Practice: The Kroger Company/Meijer Stores Limited Partnership 177 Product Design 177 Process Management 182 Managing Supplier Quality 182 QUALITY AWARDS AND STANDARDS 183 The Malcolm Baldrige National Quality Award (MBNQA) 183 The Deming Prize 184 ISO 9000 Standards 184 ISO 14000 Standards 185 WHY TQM EFFORTS FAIL 186 TOTAL QUALITY MANAGEMENT (TQM) WITHIN OM: HOW IT ALL FITS TOGETHER 186 TOTAL QUALITY MANAGEMENT (TQM) ACROSS THE ORGANIZATION 187 THE SUPPLY CHAIN LINK 188 THE SUSTAINABILITY LINK 188 Chapter Highlights 189 Key Terms 189 Formula Review 190 Solved Problems 190 Discussion Questions 191 Problems 191 CASE: GOLD COAST ADVERTISING (GCA) 192 CASE: DELTA PLASTICS, INC. (A) 193 INTERACTIVE CASE: VIRTUAL COMPANY 194 INTERNET CHALLENGE 195 ONLINE RESOURCES 195 Selected Bibliography 196 CHAPTER 6 Statistical Quality Control 197 WHAT IS STATISTICAL QUALITY CONTROL? 198 Links to Practice: Intel Corporation 199 SOURCES OF VARIATION: COMMON AND ASSIGNABLE CAUSES 200 DESCRIPTIVE STATISTICS 200 The Mean 200 The Range and Standard Deviation 201 Distribution of Data 201 STATISTICAL PROCESS CONTROL METHODS 201 Developing Control Charts 202 Types of Control Charts 203 CONTROL CHARTS FOR VARIABLES 204 Mean (x-Bar) Charts 204 Range (R) Charts 208 Using Mean and Range Charts Together 209 CONTROL CHARTS FOR ATTRIBUTES 210 P-Charts 211 C-Charts 214 PROCESS CAPABILITY 216 Measuring Process Capability 216 SIX SIGMA QUALITY 221 Links to Practice: Motorola, Inc. 222 ACCEPTANCE SAMPLING 223 Sampling Plans 223 Operating Characteristic (OC) Curves 224 Developing OC Curves 226 Average Outgoing Quality 227 IMPLICATIONS FOR MANAGERS 229 How Much and How Oft en to Inspect 229 Where to Inspect 229 Which Tools to Use 230 STATISTICAL QUALITY CONTROL IN SERVICES 230 Links to Practice: The Ritz-Carlton Hotel Company, L.L.C./Nordstrom, Inc. 231 Links to Practice: Marriott International, Inc. 231 STATISTICAL QUALITY CONTROL (SQC) WITHIN OM: HOW IT ALL FITS TOGETHER 232 STATISTICAL QUALITY CONTROL (SQC) ACROSS THE ORGANIZATION 232 THE SUPPLY CHAIN LINK 233 THE SUSTAINABILITY LINK 233 Chapter Highlights 234 Key Terms 234 Formula Review 235 Solved Problems 235 Discussion Questions 240 Problems 240 CASE: SCHARADIN HOTELS 243 CASE: DELTA PLASTICS, INC. (B) 244 INTERACTIVE CASE: VIRTUAL COMPANY 244 INTERNET CHALLENGE 245 ONLINE RESOURCES 245 Selected Bibliography 245 CHAPTER 7 Just-in-Time and Lean Systems 246 THE PHILOSOPHY OF JIT 248 Eliminate Waste 249 A Broad View of Operations 249 Simplicity 249 Continuous Improvement 250 Visibility 250 Flexibility 250 ELEMENTS OF JIT 251 Just-in-Time Manufacturing 251 Total Quality Management (TQM) 253 Respect for People 253 Links to Practice: Texas Instruments 254 JUST-IN-TIME MANUFACTURING 254 The Pull System 254 Kanban Production 255 Variations of Kanban Production 258 Small Lot Sizes and Quick Setups 258 Uniform Plant Loading 259 Flexible Resources 260 Facility Layout 261 Links to Practice: Ryder Integrated Logistics 261 TOTAL QUALITY MANAGEMENT 262 Product versus Process 263 Quality at the Source 263 Preventive Maintenance 264 Work Environment 264 RESPECT FOR PEOPLE 265 The Role of Production Employees 265 Lifetime Employment 266 The Role of Management 267 Supplier Relationships 268 BENEFITS OF JIT 269 Links to Practice: Alcoa, Inc. 269 IMPLEMENTING JIT 270 JIT IN SERVICES 271 Improved Quality 271 Uniform Facility Loading 271 Use of Multifunction Workers 272 Reductions in Cycle Time 272 Minimizing Setup Times and Parallel Processing 272 Workplace Organization 272 JIT AND LEAN SYSTEMS WITHIN OM: HOW IT ALL FITS TOGETHER 272 JIT AND LEAN SYSTEMS ACROSS THE ORGANIZATION 272 THE SUPPLY CHAIN LINK 273 THE SUSTAINABILITY LINK 274 Chapter Highlights 274 Key Terms 275 Formula Review 275 Solved Problems 275 Discussion Questions 275 Problems 276 CASE: KATZ CARPETING 276 CASE: DIXON AUDIO SYSTEMS 277 INTERACTIVE CASE: VIRTUAL COMPANY 278 INTERNET CHALLENGE 279 ONLINE RESOURCES 279 Selected Bibliography 279 CHAPTER 8 Forecasting 280 PRINCIPLES OF FORECASTING 281 STEPS IN THE FORECASTING PROCESS 282 Links to Practice: Intel Corporation 283 TYPES OF FORECASTING METHODS 283 Links to Practice: Improving Sales Forecasting 284 Qualitative Methods 284 Quantitative Methods 286 TIME SERIES MODELS 288 Forecasting Level or Horizontal Pattern 289 Forecasting Trend 297 Forecasting Seasonality 300 Links to Practice: The Ski Industry Forecast 303 CAUSAL MODELS 303 Linear Regression 303 Correlation Coefficient 306 Multiple Regression 307 MEASURING FORECAST ACCURACY 307 Forecast Accuracy Measures 307 Tracking Signal 309 SELECTING THE RIGHT FORECASTING MODEL 310 FORECASTING SOFTWARE 311 Spreadsheets 311 Statistical Packages 311 Specialty Forecasting Packages 312 Guidelines for Selecting Forecasting Software 312 FOCUS FORECASTING 313 COMBINING FORECASTS 313 Links to Practice: Combining Methods in Weather Forecasting 314 COLLABORATIVE PLANNING, FORECASTING, AND REPLENISHMENT (CPFR) 314 FORECASTING WITHIN OM: HOW IT ALL FITS TOGETHER 315 FORECASTING ACROSS THE ORGANIZATION 315 THE SUPPLY CHAIN LINK 316 THE SUSTAINABILITY LINK 316 Chapter Highlights 317 Key Terms 317 Formula Review 318 Solved Problems 319 Discussion Questions 323 Problems 323 CASE: BRAM-WEAR 327 CASE: THE EMERGENCY ROOM (ER) AT NORTHWEST GENERAL (A) 328 INTERACTIVE CASE: VIRTUAL COMPANY 329 INTERNET CHALLENGE 329 ONLINE RESOURCES 330 Selected Bibliography 330 CHAPTER 9 Capacity Planning and Facility Location 331 CAPACITY PLANNING 333 Why Is Capacity Planning Important? 333 Links to Practice: Capacity Planning in the ER 333 Measuring Capacity 334 Capacity Considerations 336 Links to Practice: Focus in the Retail Industry 339 MAKING CAPACITY PLANNING DECISIONS 339 Identify Capacity Requirements 340 Develop Capacity Alternatives 341 Evaluate Capacity Alternatives 341 DECISION TREES 341 LOCATION ANALYSIS 344 What Is Facility Location? 345 Factors Affecting Location Decisions 345 Links to Practice: Locating in Silicon Valley 346 Globalization 347 MAKING LOCATION DECISIONS 349 Procedure for Making Location Decisions 349 Procedures for Evaluating Location Alternatives 349 CAPACITY PLANNING AND FACILITY LOCATION WITHIN OM: HOW IT ALL FITS TOGETHER 360 CAPACITY PLANNING AND FACILITY LOCATION ACROSS THE ORGANIZATION 360 THE SUPPLY CHAIN LINK 361 THE SUSTAINABILITY LINK 361 Chapter Highlights 361 Key Terms 362 Formula Review 362 Solved Problems 362 Discussion Questions 365 Problems 365 CASE: DATA TECH, INC. 368 CASE: THE EMERGENCY ROOM (ER) AT NORTHWEST GENERAL (B) 369 INTERACTIVE CASE: VIRTUAL COMPANY 369 INTERNET CHALLENGE 370 ONLINE RESOURCES 370 Selected Bibliography 371 CHAPTER 10 Facility Layout 372 WHAT IS LAYOUT PLANNING? 373 TYPES OF LAYOUTS 374 Process Layouts 374 Links to Practice: Wal-Mart Stores, Inc. 376 Product Layouts 376 Links to Practice: Toyota Motor Corporation 378 Hybrid Layouts 378 Fixed-Position Layouts 379 DESIGNING PROCESS LAYOUTS 379 Step 1: Gather Information 379 Step 2: Develop a Block Plan 382 Step 3: Develop a Detailed Layout 385 SPECIAL CASES OF PROCESS LAYOUT 385 Warehouse Layouts 385 Office Layouts 388 DESIGNING PRODUCT LAYOUTS 389 Step 1: Identify Tasks and Their Immediate Predecessors 389 Step 2: Determine Output Rate 391 Step 3: Determine Cycle Time 391 Step 4: Compute the Theoretical Minimum Number of Stations 393 Step 5: Assign Tasks to Workstations (Balance the Line) 393 Step 6: Compute Efficiency, Idle Time, and Balance Delay 394 Other Considerations 395 GROUP TECHNOLOGY (CELL) LAYOUTS 396 FACILITY LAYOUT WITHIN OM: HOW IT ALL FITS TOGETHER 397 FACILITY LAYOUT ACROSS THE ORGANIZATION 397 THE SUPPLY CHAIN LINK 398 THE SUSTAINABILITY LINK 398 Chapter Highlights 399 Key Terms 399 Formula Review 399 Solved Problems 400 Discussion Questions 402 Problems 403 CASE: SAWHILL ATHLETIC CLUB (A) 407 CASE: SAWHILL ATHLETIC CLUB (B) 408 INTERACTIVE CASE: VIRTUAL COMPANY 409 INTERNET CHALLENGE 409 ONLINE RESOURCES 410 Selected Bibliography 410 CHAPTER 10 Work System Design 411 DESIGNING A WORK SYSTEM 412 JOB DESIGN 413 Designing a Job 413 Links to Practice: Google 413 Machines or People? 414 Level of Labor Specialization 415 Eliminating Employee Boredom 416 Team Approaches to Job Design 416 Links to Practice: The SCO Group 417 The Alternative Workplace 417 Links to Practice: AT&T 418 METHODS ANALYSIS 419 THE WORK ENVIRONMENT 421 WORK MEASUREMENT 422 Costing 422 Performance 423 Planning 423 SETTING STANDARD TIMES 423 How to Do a Time Study 423 Elemental Time Data 429 Predetermined Time Data 429 Work Sampling 431 Links to Practice: Pace Productivity 433 COMPENSATION 433 Time-Based Systems 433 Output-Based Systems 433 Group Incentive Plans 434 Links to Practice: Accounatable Care Organizations (ACO) 434 Incentive Plan Trends 435 LEARNING CURVES 435 WORK SYSTEM DESIGN WITHIN OM: HOW IT ALL FITS TOGETHER 438 WORK SYSTEM DESIGN ACROSS THE ORGANIZATION 438 THE SUPPLY CHAIN LINK 439 THE SUSTAINABILITY LINK 439 Chapter Highlights 440 Key Terms 440 Formula Review 441 Solved Problems 441 Discussion Questions 444 Problems 444 CASE: THE NAVIGATOR III 447 CASE: NORTHEAST STATE UNIVERSITY 447 INTERACTIVE CASE: VIRTUAL COMPANY 448 INTERNET CHALLENGE 449 ONLINE RESOURCES 450 Selected Bibliography 450 CHAPTER 12 Inventory Management 451 TYPES OF INVENTORY 452 HOW COMPANIES USE THEIR INVENTORY 453 OBJECTIVES OF INVENTORY MANAGEMENT 455 Customer Service 455 Cost-Efficient Operations 456 Minimum Inventory Investment 457 RELEVANT INVENTORY COSTS 459 Item Costs 459 Holding Costs 459 Ordering Costs 461 Shortage Costs 461 ABC INVENTORY CLASSIFICATION 461 Procedure for an ABC Inventory Analysis 463 Inventory Control Using ABC Classification 463 INVENTORY RECORD ACCURACY 464 Links to Practice: Cisco Systems, Inc. 464 INVENTORY IN SERVICE ORGANIZATIONS 466 DETERMINING ORDER QUANTITIES 467 MATHEMATICAL MODELS FOR DETERMINING ORDER QUANTITY 468 Economic Order Quantity (EOQ) 468 Calculating the EOQ 471 Economic Production Quantity (EPQ) 473 Quantity Discount Model 477 WHY COMPANIES DON’T ALWAYS USE THE OPTIMAL ORDER QUANTITY 481 JUSTIFYING SMALLER ORDER QUANTITIES 481 Links to Practice: Kenworth Trucks 481 Understanding the EPQ Factors 482 DETERMINING SAFETY STOCK LEVELS 483 How Much Safety Stock? 483 PERIODIC REVIEW SYSTEM 485 Comparison of Continuous Review Systems and Periodic Review Systems 487 THE SINGLE-PERIOD INVENTORY MODEL 488 INVENTORY MANAGEMENT WITHIN OM: HOW IT ALL FITS TOGETHER 490 INVENTORY MANAGEMENT ACROSS THE ORGANIZATION 491 THE SUPPLY CHAIN LINK 491 THE SUSTAINABILITY LINK 492 Chapter Highlights 492 Key Terms 493 Formula Review 493 Solved Problems 494 Discussion Questions 497 Problems 498 CASE: FABQUAL LTD. 500 CASE: KAYAKS!INCORPORATED 501 INTERACTIVE CASE: VIRTUAL COMPANY 502 INTERNET CHALLENGE 503 ONLINE RESOURCES 503 Selected Bibliography 504 CHAPTER 13 Aggregate Planning 505 THE ROLE OF AGGREGATE PLANNING 507 Marketing Plan 507 Aggregate or Production Plan 507 Financial and Engineering Plans 508 Master Production Schedule 508 Links to Practice: Coca-Cola Midi (CCM) 509 TYPES OF AGGREGATE PLANS 509 Level Aggregate Plan 509 Chase Aggregate Plan 510 Hybrid Aggregate Plan 511 AGGREGATE PLANNING OPTIONS 511 Demand-Based Options 512 Capacity-Based Options 512 EVALUATING THE CURRENT SITUATION 514 Links to Practice: UPS Hires Seasonal Workers 515 DEVELOPING THE AGGREGATE PLAN 515 AGGREGATE PLANS FOR COMPANIES WITH TANGIBLE PRODUCTS 517 AGGREGATE PLANS FOR SERVICE COMPANIES WITH NONTANGIBLE PRODUCTS 520 AGGREGATE PLANNING WITHIN OM: HOW IT ALL FITS TOGETHER 524 AGGREGATE PLANNING ACROSS THE ORGANIZATION 525 THE SUPPLY CHAIN LINK 525 THE SUSTAINABILITY LINK 526 Chapter Highlights 526 Key Terms 526 Solved Problems 527 Discussion Questions 533 Problems 534 CASE: NEWMARKET INTERNATIONAL MANUFACTURING COMPANY (A) 535 CASE: JPC, INC.: KITCHEN COUNTERTOPS MANUFACTURER 536 INTERACTIVE CASE: VIRTUAL COMPANY 537 INTERNET CHALLENGE 537 ONLINE RESOURCES 538 Selected Bibliography 538 CHAPTER 14 Resource Planning 539 ENTERPRISE RESOURCE PLANNING 541 ERP Modules 542 THE EVOLUTION OF ERP 542 First-Generation ERP 542 Second-Generation ERP 543 Links to Practice: Arapahoe County Government 544 THE BENEFITS OF ERP 545 Links to Practice: i2 Technologies 545 Links to Practice: SAP AG 546 THE COST OF ERP SYSTEMS 546 MATERIAL PLANNING SYSTEMS 547 AN OVERVIEW OF MRP 547 TYPES OF DEMAND 548 OBJECTIVES OF MRP 550 MRP INPUTS 550 Authorized MPS 550 Inventory Records 550 Bills of Material 552 THE MRP EXPLOSION PROCESS 555 ACTION NOTICES 559 COMPARISON OF LOT SIZE RULES 559 THE ROLE OF CAPACITY REQUIREMENTS PLANNING (CRP) 560 RESOURCE PLANNING WITHIN OM: HOW IT ALL FITS TOGETHER 562 RESOURCE PLANNING ACROSS THE ORGANIZATION 563 THE SUPPLY CHAIN LINK 564 THE SUSTAINABILITY LINK 564 Chapter Highlights 565 Key Terms 565 Formula Review 566 Solved Problems 566 Discussion Questions 569 Problems 569 CASE: NEWMARKET INTERNATIONAL MANUFACTURING COMPANY (B) 571 CASE: DESSERTS BY J.B. 573 INTERACTIVE CASE: VIRTUAL COMPANY 573 INTERNET CHALLENGE 574 ONLINE RESOURCES 574 Selected Bibliography 575 CHAPTER 15 Scheduling 576 SCHEDULING OPERATIONS 578 HIGH-VOLUME OPERATIONS 578 Characteristics of Flow Operations 578 LOW-VOLUME OPERATIONS 579 Gantt Chart 579 SCHEDULING WORK 580 Infinite Loading 580 Finite Loading 581 Forward Scheduling 581 Backward Scheduling 582 Monitoring Workflow 582 HOW TO SEQUENCE JOBS 584 Priority Rules 584 How to Use Priority Rules 585 MEASURING PERFORMANCE 586 Links to Practice: Airline Scheduling 586 Job Flow Time 586 Average Number of Jobs in the System 587 Makespan 587 Job Lateness and Tardiness 587 COMPARING PRIORITY RULES 588 Comparing SPT and S/RO 591 SEQUENCING JOBS THROUGH TWO WORK CENTERS 591 SCHEDULING BOTTLENECKS 593 Links to Practice: 1-800-FLOWERS.com 595 THEORY OF CONSTRAINTS 596 SCHEDULING FOR SERVICE ORGANIZATIONS 596 Scheduling Services Demanded 596 Scheduling Employees 598 DEVELOPING A WORKFORCE SCHEDULE 599 SCHEDULING WITHIN OM: PUTTING IT ALL TOGETHER 600 SCHEDULING ACROSS THE ORGANIZATION 601 THE SUPPLY CHAIN LINK 602 THE SUSTAINABILITY LINK 602 Chapter Highlights 602 Key Terms 603 Formula Review 603 Solved Problems 603 Discussion Questions 607 Problems 607 CASE: AIR TRAFFIC CONTROLLER SCHOOL (ATCS) 610 CASE: SCHEDULING AT RED, WHITE AND BLUE FIREWORKS COMPANY 610 INTERACTIVE CASE: VIRTUAL COMPANY 611 INTERNET CHALLENGE 611 ONLINE RESOURCES 612 Selected Bibliography 612 CHAPTER 16 Project Management 613 PROJECT LIFE CYCLE 615 Conception 615 Feasibility Analysis or Study 615 Planning 616 Execution 616 Termination 616 NETWORK PLANNING TECHNIQUES 616 Links to Practice: PERT and the Polaris Missile 616 Step 1: Describe the Project 617 Step 2: Diagram the Network 618 Step 3: Estimate the Project’s Completion Time 619 Step 3 (a): Deterministic Time Estimates 620 Step 3 (b): Probabilistic Time Estimates 622 Step 4: Monitor the Project’s Progression 628 Links to Practice: Managing the Olympic Games 628 ESTIMATING THE PROBABILITY OF COMPLETION DATES 629 REDUCING PROJECT COMPLETION TIME 631 Crashing Projects 631 THE CRITICAL CHAIN APPROACH 634 Adding Safety Time 634 Wasting Safety Time 634 PROJECT MANAGEMENT WITHIN OM: HOW IT ALL FITS TOGETHER 636 PROJECT MANAGEMENT OM ACROSS THE ORGANIZATION 636 THE SUPPLY CHAIN LINK 637 THE SUSTAINABILITY LINK 637 Chapter Highlights 637 Key Terms 638 Formula Review 638 Solved Problems 638 Discussion Questions 642 Problems 642 CASE: THE RESEARCH OFFICE MOVES 645 CASE: WRITING A TEXTBOOK 645 INTERACTIVE CASE: VIRTUAL COMPANY 646 INTERNET CHALLENGE 647 ONLINE RESOURCES 647 Selected Bibliography 648 APPENDIX A Solutions to Odd-Numbered Problems 649 APPENDIX B The Standard Normal Distribution 671 APPENDIX C P-Chart 672 NAME INDEX 675 SUBJECT INDEX 678 SUPPLEMENT A Spreadsheet Modeling: An Introduction A1 WHAT ARE MODELS? A2 THE SPREADSHEET MODELING PROCESS A4 EVALUATING SPREADSHEET MODELS A5 Planning the Model A7 Implementing the Model in Excel A8 Assessing the Model A9 Using the Model for Analysis A11 Adding Data Tables A14 Graphing the Model Results A17 Planning the Model A18 Constructing the Model in Excel A19 Reviewing Relative and Absolute Cell Referencing A20 Entering Formulas in the Model A21 USEFUL SPREADSHEET TIPS A26 IMPORTANT EXCEL FORMULAS A27 SPREADSHEET MODELING WITHIN OM: HOW IT ALL FITS TOGETHER A28 Supplement Highlights A29 Key Terms A29 Discussion Questions A29 Problems A30 CASE: DIET PLANNING A31 ONLINE RESOURCES A32 Selected Bibliography A32 SUPPLEMENT B Introduction to Optimization B1 INTRODUCTION B2 ALGEBRAIC FORMULATION B4 Examining the Formulation B6 SPREADSHEET MODEL DEVELOPMENT B7 Testing the Model B8 SOLVER BASICS B9 SETTING UP AND RUNNING SOLVER B9 Solving the Problem B12 INTERPRETING THE SOLUTION B13 SOLVER SOLUTION REPORTS B14 RECAP B16 OUTCOMES OF LINEAR PROGRAMMING PROBLEMS B16 OPTIMIZATION WITHIN OM: HOW IT ALL FITS TOGETHER B18 Supplement Highlights B18 Key Terms B19 Solved Problems B19 Discussion Questions B23 Problems B24 CASE: EXETER ENTERPRISES B25 ONLINE RESOURCES B26 Selected Bibliography B26 SUPPLEMENT C Waiting Line Models C1 ELEMENTS OF WAITING LINES C2 Links to Practice: Waiting for Fast Food C3 The Customer Population C3 The Service System C4 Arrival and Service Patterns C6 Waiting Line Priority Rules C6 WAITING LINE PERFORMANCE MEASURES C7 SINGLE-SERVER WAITING LINE MODEL C7 MULTISERVER WAITING LINE MODEL C10 CHANGING OPERATIONAL CHARACTERISTICS C13 LARGER-SCALE WAITING LINE SYSTEMS C14 WAITING LINE MODELS WITHIN OM: HOW IT ALL FITS TOGETHER C15 Supplement Highlights C15 Key Terms C16 Formula Review C16 Solved Problems C16 Discussion Questions C18 Problems C19 CASE: THE COPY CENTER HOLDUP C19 ONLINE RESOURCES C20 Selected Bibliography C20 SUPPLEMENT D Master Scheduling and Rough-Cut Capacity Planning D1 MASTER PRODUCTION SCHEDULING D2 MPS AS A BASIS OF COMMUNICATION D3 OBJECTIVES OF MASTER SCHEDULING D4 DEVELOPING AN MPS D4 ROUGH-CUT CAPACITY PLANNING D6 EVALUATING AND ACCEPTING THE MPS D9 USING THE MPS D10 USING THE ATP RECORDS D11 STABILIZING THE MPS D14 MASTER PRODUCTION SCHEDULING AND ROUGH-CUT CAPACITY PLANNING WITHIN OM: HOW IT ALL FITS TOGETHER D15 Supplement Highlights D16 Key Terms D16 Formula Review D16 Solved Problems D17 Discussion Questions D22 Problems D22 CASE: NEWMARKET INTERNATIONAL MANUFACTURING COMPANY (C) D23 ONLINE RESOURCES D24 Selected Bibliography D24