Operations Management

From the Authors v Making Operations Management Personal vi Changes to This Edition viii Improved Learning Outcomes with WileyPLUS x Acknowledgments xii About the Authors xiv 1 Introduction to Operations Management 1 Chapter Overview 1 What is Operations Management? 2 Differences between Manufacturing and Service Organizations 4 Operations Management Decisions 6 Historical Development 9 Today's OM Environment 17 Operations Management in Practice 17 Within OM: How It All Fits Together 18 The Supply Chain Link 20 The Sustainability Link 20 Case: Hightone Electronics, Inc. 21 Case: Creature Care Animal Clinic (A) 21 Case: Analytics in Decision Making 22 Interactive Case: Virtual Company 22 Internet Challenge: Demonstrating Your Knowledge of OM 23 Chapter Highlights / Key Terms / Discussion Questions / Selected Bibliography 2 Operations Strategy and Competitiveness 25 Chapter Overview 25 The Role of Operations Strategy 26 The Importance of Operations Strategy 27 Developing a Business Strategy 27 Developing an Operations Strategy 31 Strategic Role of Technology 36 Productivity 37 Operations Strategy within OM: How It All Fits Together 40 The Supply Chain Link 41 The Sustainability Link 42 Solved Problems 42 Case: Prime Bank of Massachusetts 43 Case: Boseman Oil and Petroleum (BOP) 44 Case: Analytics in Decision Making 45 Interactive Case: Virtual Company 45 Internet Challenge: Understanding Strategic Differences 46 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 3 Product Design and Process Selection 49 Chapter Overview 49 Product Design 50 The Product Design Process 51 Factors Impacting Product Design 55 Process Selection 58 Designing Processes 61 Process Performance Metrics 64 Linking Product Design and Process Selection 65 Technology Decisions 70 Designing Services 74 Product Design and Process Selection within OM: How It All Fits Together 79 The Supply Chain Link 80 The SustainabilIty Link 80 Solved Problems 81 Case: Biddy's Bakery (BB) 83 Case: Creature Care Animal Clinic (B) 83 Case: Analytics in Decision Making 84 Interactive Case: Virtual Company 84 Internet Challenge: Country Comfort Furniture 85 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 4 Supply Chain Management 89 Chapter Overview 89 Basic Supply Chains 90 Issues Affecting Supply Chain Management 96 The Role of Purchasing 105 Sourcing Decisions 108 The Role of Warehouses 116 Implementing Supply Chain Management 121 Supply Chain Management within OM: How It All Fits Together 124 The Supply Chain Link 125 The Sustainability Link 125 Solved Problems 126 Case: Electronic Personal Heart Rate Monitors Supply Chain Management Game 127 Case: Supply Chain Management at Durham International Manufacturing Company (DIMCO) 129 Case: Analytics in Decision Making 130 Interactive Case: Virtual Company 130 Internet Challenge: Global Shopping 131 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 5 Total Quality Management 135 Chapter Overview 135 Defining Quality 136 Cost of Quality 138 The Evolution of Total Quality Management (TQM) 139 The Philosophy of TQM 143 Quality Awards and Standards 154 Why TQM Efforts Fail 156 Total Quality Management (TQM) within OM: How It All Fits Together 157 The Supply Chain Link 158 The Sustainability Link 159 Solved Problems 159 Case: Gold Coast Advertising (GCA) 160 Case: Delta Plastics, Inc. (A) 160 Case: Analytics in Decision Making 162 Interactive Case: Virtual Company 162 Internet Challenge: Snyder Bakeries 163 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 6 Statistical Quality Control 167 Chapter Overview 167 What is Statistical Quality Control? 168 Sources of Variation: Common and Assignable Causes 169 Descriptive Statistics 169 Statistical Process Control Methods 171 Control Charts for Variables 173 Control Charts for Attributes 179 Process Capability 185 Six Sigma Quality 189 Acceptance Sampling 190 Implications for Managers 196 Statistical Quality Control in Services 198 Statistical Quality Control (SQC) within OM: How It All Fits Together 199 The Supply Chain Link 200 The SustainabilIty Link 200 Solved Problems 201 Case: Scharadin Hotels 206 Case: Delta Plastics, Inc. (B) 207 Case: Analytics in Decision Making 207 Interactive Case: Virtual Company 208 Internet Challenge: Safe-Air 208 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 7 Just-in-Time and Lean Systems 214 Chapter Overview 214 The Philosophy of JIT 215 Elements of JIT 217 Just-in-Time Manufacturing 220 Total Quality Management 227 Respect for People 230 Benefits of JIT 233 Implementing JIT 234 JIT in Services 236 JIT and Lean Systems within OM: How It All Fits Together 237 The Supply Chain Link 238 The Sustainability Link 238 Solved Problems 239 Case: Katz Carpeting 239 Case: Dixon Audio Systems 240 Case: Analytics in Decision Making 241 Interactive Case: Virtual Company 241 Internet Challenge: Truck-Fleet, Inc. 242 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 8 Forecasting 245 Chapter Overview 245 Principles of Forecasting 246 Steps in the Forecasting Process 246 Types of Forecasting Methods 247 Time Series Models 251 Causal Models 266 Measuring Forecast Accuracy 270 Selecting the Right Forecasting Model 273 Collaborative Planning, Forecasting, and Replenishment (CPFR) 276 Forecasting within OM: How It All Fits Together 277 The Supply Chain Link 278 The Sustainability Link 278 Solved Problems 279 Case: Bram-Wear 284 Case: The Emergency Room (ER) at Northwest General (A) 285 Case: Analytics in Decision Making 286 Interactive Case: Virtual Company 286 Internet Challenge: Online Data Access 286 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 9 Capacity Planning and Facility Location 293 Chapter Overview 293 Capacity Planning 294 Making Capacity Planning Decisions 299 Decision Trees 301 Location Analysis 304 Making Location Decisions 308 Capacity Planning and Facility Location within OM: How It All Fits Together 318 Capacity Planning and Facility Location across the Organization 318 The Supply Chain Link 318 The Sustainability Link 319 Solved Problems 319 Case: Data Tech, Inc. 322 Case: The Emergency Room (ER) at Northwest General (B) 323 Case: Analytics in Decision Making 323 Interactive Case: Virtual Company 323 Internet Challenge: EDS Office Supplies, Inc. 324 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 10 Facility Layout 329 Chapter Overview 329 What is Layout Planning? 330 Types of Layouts 330 Designing Process Layouts 333 Special Cases of Process Layout 339 Designing Product Layouts 343 Group Technology (Cell) Layouts 349 Facility Layout within OM: How It All Fits Together 350 The Supply Chain Link 351 The Sustainability Link 351 Solved Problems 352 Case: Sawhill Athletic Club (A) 354 Case: Sawhill Athletic Club (B) 355 Case: Analytics in Decision Making 356 Interactive Case: Virtual Company 356 Internet Challenge: D J and Associates, Inc. 356 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 11 Work System Design 363 Chapter Overview 363 Work System Design 364 Job Design 364 Work Measurement 372 Compensation 385 Work System Design within OM: How It All Fits Together 386 The Supply Chain Link 387 The Sustainability Link 388 Solved Problems 388 Case: The Navigator III 391 Case: Northeast State University 391 Case: Analytics in Decision Making 392 Interactive Case: Virtual Company 392 Internet Challenge: E -commerce Job Design 393 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 12 Inventory Management 399 Chapter Overview 399 Basic Inventory Principles 400 Inventory Management Objectives 402 Minimum Inventory Investment 404 Relevant Inventory Costs 406 ABC Inventory Classification 408 Inventory Record Accuracy 411 Determining Order Quantities 413 Determining Safety Stock Levels 428 The Periodic Review System 430 Inventory Management within OM: How It All Fits Together 433 The Supply Chain Link 434 The Sustainability Link 434 Solved Problems 434 Case: FabQual Ltd. 438 Case: Kayaks!Incorporated 438 Case: Analytics in Decision Making 439 Interactive Case: Virtual Company 440 Internet Challenge: Community Fundraiser (A) 440 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 13 Aggregate Planning 447 Chapter Overview 447 Business Planning 448 Aggregate Planning Options 450 Aggregate Plan Strategies 454 Developing the Aggregate Plan 456 Aggregate Planning within OM: How It All Fits Together 465 The Supply Chain Link 466 The Sustainability Link 466 Solved Problems 467 Case: Newmarket International Manufacturing Company (A) 473 Case: JPC, Inc.: Kitchen Countertops Manufacturer 474 Interactive Case: Virtual Company 474 Case: Analytics in Decision Making 475 Internet Challenge: Cruising 475 Chapter Highlights / Key Terms / Discussion Questions / Problems / Selected Bibliography 14 Resource Planning 480 Chapter Overview 480 Enterprise Resource Planning 481 The Benefits and Costs of ERP 484 Material Planning Systems 486 How MRP Works 494 Capacity Requirements Planning (CRP) 500 Resource Planning within OM: How It All Fits Together 502 Resource Planning across the Organization 503 The Supply Chain Link 504 The Sustainability Link 504 Solved Problems 504 Case: Newmarket International Manufacturing Company (B) 508 Case: Desserts by J.B. 510 Case: Analytics in Decision Making 510 Interactive Case: Virtual Company 511 Internet Challenge: The Gourmet Dinner 512 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 15 Scheduling 517 Chapter Overview 517 Basic Scheduling Concepts 518 Developing a Schedule of Operations 523 Optimized Production Technology 532 Scheduling Issues for Service Organizations 534 Scheduling within OM: Putting It All Together 538 The Supply Chain Link 539 The SustainabilIty Link 539 Solved Problems 539 Case: Air Traffic Controller School (ATCS) 543 Case: Scheduling at Red, White, and Blue Fireworks Company 544 Interactive Case: Virtual Company 544 Case: Analytics in Decision Making 545 Internet Challenge: Batter Up 545 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography 16 Project Management 550 Chapter Overview 550 The Project Life Cycle 551 Project Management Concepts 552 Estimating the Probability of Completion Dates 564 Reducing Project Completion Time 566 The Critical Chain Approach 569 Project Management within OM: How It All Fits Together 570 The Supply Chain Link 571 The Sustainability Link 572 Solved Problems 572 Case: The Research Office Moves 576 Case: Writing a Textbook 576 Case: Analytics in Decision Making 577 Interactive Case: Virtual Company 578 Internet Challenge: Creating Memories 578 Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography Appendix A Solutions to Odd Problems 584 Appendix B The Standard Normal Distribution 608 Appendix C p-Chart 609 Company Index 613 Subject Index 615 Available in WileyPLUS and Wiley Custom: Supplement A Spreadsheet Modeling: An Introduction A1 Supplement B Introduction to Optimization B1 Supplement C Waiting Line Models C1 Supplement D Master Scheduling and Rough-Cut Capacity Planning D1

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• Gestão da produção e do controlo de qualidade