Rochester Institute of Technology
McGraw-Hill
Irwin
Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis
Bangkok Bogota Caracas Kuala Lumpur Lisbon London Madrid Mexico City
Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
Reading:
Productivity Gains Curb Inflation
part 1 Introduction 1
51
Implications of Organization Strategy for
Operations Management
Introduction
52
Transforming Strategy into Action: The Balanced
4
Process Management
Scorecard
10
52
Productivity
Reading:
The Challenges of Managing Services
The Scope of Operations Management
10
11
Reading:
Why Manufacturing Matters
Readings:
Why Productivity Matters
56
Productivity Improvement
59
Summary
14
Why Learn About Operations Management?
Operations Management and Decision Making
15
18
Reading:
53
59
Key Terms
60
Solved Problems
60
Discussion and Review Questions
Need a Systems Approach?
20
Taking Stock
The Historical Evolution of Operations
Critical Thinking Exercises
Management
Problems
22
Key Trends and Issues in Business
26
27
Summary
Hazel Revisited
64
66
"Your Garden Gloves"
35
Discussion and Review Questions
Taking Stock
63
Home-Style Cookies
32
35
Key Terms
62
Company Died
Operations Tour:
Wegmans Food Markets
The U.S. Postal Service
67
Selected Bibliography and Further Reading
36
Case:
Total Recall
66
Operations Tour:
35
36
Critical Thinking Exercises
61
Cases:
An American Tragedy: How a Good
Reading:
Universities Embrace Sustainability
61
61
part 2 Forecasting 69
36
Selected Bibliography and Further Reading
37
Introduction
72
73
Features Common to All Forecasts
and Productivity
Introduction
38
Elements of a Good Forecast
40
Competitiveness
74
Steps in the Forecasting Process
40
Forecasting Accuracy
Mission and Strategies
Operations Strategy
68
49
42
74
75
Reading:
High Forecasts Can Be Bad News
75
XXV
Contents
XXVI
Approaches to Forecasting
77
Forecasts Based on Judgment and Opinion
Forecasts Based on Time-Series Data
Associative Forecasting Techniques
Monitoring the Forecast
78
Reading:
Do You Want Pickled Beets with That?
94
99
Choosing a Forecasting Technique
Using Forecast Information
Reading:
105
Vlasic on a Roll with Huge Pickle Slices
105
Designing for Production
Reading:
Gazing at the Crystal Ball
Summary
The Kano Model
Service Design
110
Solved Problems
Discussion and Review Questions
Taking Stock
126
Highline Financial Services, Ltd.
Problems
126
Selected Bibliography and Further Reading
Reading:
Design as a Business Strategy
166
167
Operations Tour:
127
High Acres Landfill
168
Selected Bibliography and Further Reading
part 3 System Design 129
Pratilyct and Service Design
166
166
Critical Thinking Exercises
M&L Manufacturing
130
Reliability
170
132
132
Reading:
Product Redesign, Not Offshoring, Holds Cost
Advantages for U.S. Manufacturers 133
services
Introduction
Reading:
185
Excess Capacity Can Be Bad News!
Reading:
Dutch Boy Brushes Up Its Paints
The Key Questions
134
135
Capacity Decisions Are Strategic
187
Defining and Measuring Capacity
187
Determinants of Effective Capacity
Reading:
Motorola Warms Up to Cool Phone Design
Legal and Ethical Considerations
Sustainability
166
Taking Stock
117
Introduction
165
Discussion and Review Questions
117
Cases:
4
160
165
Key Terms
117
Critical Thinking Exercises
Problems
Summary
116
156
159
Operations Strategy
110
152
152
Quality Function Deployment
106
108
Key Terms
150
Phases in Product Design
and Development 151
103
105
Computer Software in Forecasting
Operations Strategy
77
Recycle City: Maria's Market 141
Other Considerations in Product and Service
Design 143
135
136
137
Readings:
Making It (Almost) New Again 139
Xerox Diverts 2 Billion Pounds of Waste from
Landfills through Green Initiatives 141
186
189
Reading:
Less Trash Leaves Landfills in a Bind
Strategy Formulation
189
191
Forecasting Capacity Requirements
192
Additional Challenges of Planning Service
Capacity
194
Do It In-House or Outsource It?
195
169
xxvii
Contents
Reading:
Critical Thinking Exercises
My Compliments to the Chef, er, Buyer
Developing Capacity Alternatives
Constraint Management
Evaluating Alternatives
Operations Strategy
Summary
196
207
1
208
Discussion and Review Questions
Choosing Incentive Plans
Job Design
210
Selected Bibliography and Further Reading
Decision Theory
Motion Study
213
213
336
339
Operations Strategy
350
350
Key Terms
351
Solved Problems
Technology
352
Discussion and Review Questions
236
Introduction
332
Work Measurement
Summary
214
326
327
Methods Analysis
Case:
Layout
322
Reading:
210
Outsourcing of Hospital Services
320
321
Quality of Work Life
210
210
Critical Thinking Exercises
Problems
Design of Work Systems
Introduction
Solved Problems
Taking Stock
238
Problems
239
353
Making Hotplates
243
356
Selected Bibliography and Further Reading
Reading:
Tour de Force
SUPPLEMENT TO CHAPTER 7:
Learning Curves 357
248
Process Strategy
Facilities Layout
353
Case:
Operations Tour:
Morton Salt
352
353
Critical Thinking Exercise
238
Process Selection
249
249
Reading:
Designing Supermarkets
261
The Need for Location Decisions
Designing Product Layouts: Line Balancing
Reading:
261
The Nature of Location Decisions
Global Locations
BMW's Strategy: Flexibility
Designing Process Layouts
Summary
270
276
Discussion and Review Questions
Taking Stock
280
370
372
General Procedure for Making Location
Decisions 376
276
Solved Problems
369
Reading:
Not-So-Clear Choices: Should You Export,
or Manufacture Overseas? 374
270
275
Key Terms
287
SUPPLEWEiT TO CHAPTEi 6:
Linear Programming 288
202
208
Taking Stock
281
Selected Bibliography and Further Reading
201
207
Key Terms
Problems
196
280
280
Identifying a Country, Region, Community,
and Site 376
356
Contents
XXVIII
Reading:
Innovative MCI Unit Finds Culture Shock in
Colorado Springs 377
Service and Retail Locations 383
Readings:
Where to Put the New Store? 383
Vying for Patients, Hospitals Think Location,
Location 384
Evaluating Location Alternatives 385
Summary 390
Key Terms 390
Solved Problems 391
Discussion and Review Questions 392
Taking Stock 392
Critical Thinking Exercises 392
Problems 392
Case:
Hello, Wal-Mart? 395
Selected Bibliography and Further Reading 396
The Transportation Model
397
part 4 Quality 403
Introduction 405
Reading:
Whatever Happened to Quality 406
The Evolution of Quality Management 408
The Foundations of Modern Quality Management:
The Gurus 409
Insights on Quality Management 412
Readings:
The Sounds of Quality 415
Medical Mistakes Kill Almost 98,000 a
Year 418
Hyundai: Kissing Clunkers Goodbye 419
Recipe for Business Success: Quality 420
Quality Awards 422
Quality Certification 424
Quality and the Supply Chain 425
Reading:
Improving Quality and Reducing Risk in
Offshoring 426
Total Quality Management 427
Reading:
What Keeps Six Sigma Practitioners Up at
Night? 431
Problem Solving 432
Process Improvement 434
Quality Tools 435
Readings:
Continuous Improvement on the
Free-Throw Line 440
Benchmarking Corporate Web Sites of Fortune
500 Companies 447
Operations Strategy 447
Summary 448
Key Terms 448
Solved Problem 448
Discussion and Review Questions 449
Taking Stock 450
Critical Thinking Exercises 450
Problems 450
Cases:
Chick-n-Gravy Dinner Line 452
Tip Top Markets 453
Selected Bibliography and Further Reading 455
Introduction 457
Inspection 458
Reading:
In the Chips at Jays 461
Statistical Process Control 463
Process Capability 480
Operations Strategy 485
Reading:
Bar Codes Might Cut Drug Errors in
Hospitals 485
Summary 485
Key Terms 487
Contents
Solved Problems
Rise of the 3PL
487
Discussion and Review Questions
Taking Stock
Problems
537
^
Creating an Effective Supply Chain
491
Strategy
491
Critical Thinking Exercise
XXIX
543
Summary
492
543
Key Terms
492
Cases:
543
Discussion and Review Questions
Toys, Inc.
497
Tiger Tools
Taking Stock
497
498
Problems
543
544
Critical Thinking Exercise
Selected Bibliography and Further Reading
539
544
544
Selected Bibliography and Further Reading
Acceptance Sampling
499
part 5 Supply Chain Management 509
p a r t 6 Inventory Management
and Scheduling 547
111 Supply Chain Slaoagement
U2 inventory management
Introduction
509
Introduction
511
Reading:
Cadbury Schweppes Describes Its Supply
Chains 514
Trends in Supply Chain Management
Global Supply Chains
Procurement
m
549
e en
DDU
The Nature and Importance of Inventories
Requirements for Effective Inventory
Management 553
515
517
IBM's Supply Chain Social Responsibility
522
How Much to Order: Economic Order Quantity
Models
522
559
When to Reorder with EOQ Ordering
Readings:
Desperately Seeking E-Fulfillment
E-ProcurementatlBM
Supplier Management
Model
578
The Single-Period Model
525
Operations Strategy
Readings:
CPFR: An Overview of the Model 528
NestleUSA and Ocean Spray Form Strategic
Summary
Operations Alliance
Solved Problems
Order Fulfillment
Logistics
529
586
586
Key Terms
586
Taking Stock
530
588
593
Critical Thinking Exercises
531
Readings:
Springdale Farm
581
Discussion and Review Questions
529
Operations Tour:
Wegmans' Shipping System
Problems
593
Cases:
532
UPD Manufacturing
534
Harvey Industries
RFID Tags: Keeping the Shelves Stocked
Active RFID vs. Passive RFID
536
571
How Much to Order: Fixed-Order-Interval
524
524
Inventory Management
550
Reading:
Radio Frequency Identification (RFID)
Tags 555
518
Reading:
E-Business
548
Reading:
516
Management Responsibilities
546
535
Grill Rite
601
601
603
Farmers Market
604
593
593
Contents
XXX
Operations Tours:
Bruegger's Bagel Bakery
PSC, Inc.
[Condensed from] The Top Ten ERP
605
Mistakes
606
674
Tips for Successful ERP Projects
Selected Bibliography and Further Reading
608
Operations Strategy
Summary
Taking Stock
Aggregate Planning in Services
1§
637
644
Selected Bibliography and Further Reading
647
MRP Inputs
Shows
653
Other Considerations
699
704
706
Transitioning to a Lean System
Lean Services
661
JIT II
663
Benefits and Requirements of MRP
MRP II
Building Blocks
"People" Firms Boost Profits, Study
661
MRP in Services
644
Pedal Pushers
648
650
MRP Processing
MRP Outputs
696
Readings:
General Mills Turns to NASCAR to Reduce
Changeover Time 701
646
An Overview of MRP
695
Reading:
To Build a Better Hospital, Virginia Mason
Takes Lessons from Toyota Plants 697
Case:
MRP
694
Supporting Goals
640
14 MRPandEUP
§92
Reading:
Nearby Suppliers Match Ford's Mix
640
Eight Glasses a Day (EGAD)
Lean Operations
Introduction
639
640
Critical Thinking Exercise
688
Selected Bibliography and Further Reading
637
Taking Stock
687
Stickley Furniture
631
Discussion and Review Questions
687
Operations Tour:
631
Solved Problems
Problems
DMD Enterprises
630
636
Key Terms
681
Promotional Novelties
628
The Master Scheduling Process
681
Cases:
621
Disaggregating the Aggregate Plan
Master Scheduling
Problems
680
681
Critical Thinking Exercise
Basic Strategies for Meeting Uneven
Demand 618
Techniques for Aggregate Planning
677
Discussion and Review Questions
Reading:
Duplicate Orders Can Lead to Excess
Capacity 615
Summary
676
Solved Problems
612
676
676
Key Terms
Introduction
675
663
Capacity Requirements Planning
ERP 668
Readings:
The ABCs of ERP 669
666
719
720
Operations Strategy
Summary
664
717
720
721
Key Terms
722
Solved Problems
722
Discussion and Review Questions
Taking Stock
723
723
690
Contents
Critical Thinking Exercise
Problems
Determining Path Probabilities
723
Simulation
723
724
802
Time-Cost Trade-Offs: Crashing
Operations Tour:
Boeing
799
801
Budget Control
Case:
Level Operations
XXXI
802
Advantages of Using PERT and Potential Sources
724
of Error
Selected Bibliography and Further Reading
726
805
Critical Chain Project Management
806
Other Topics in Project Management
Maintenance
727
Project Management Software
Operations Strategy
US Scheduling
734
Risk Management
Scheduling Operations
Summary
736
Scheduling in Low-Volume Systems
Scheduling Services
Servicing Passenger Planes
Operations Strategy
Taking Stock
758
810
Problems
761
817
817
Cases:
Solved Problems
761
The Case of the Mexican Crazy Quilt
Discussion and Review Questions
Taking Stock
816
817
Critical Thinking Exercise
760
761
Key Terms
765
Time, Please
765
823
825
Selected Bibliography and Further Reading
Critical Thinking Exercises
Problems
808
Discussion and Review Questions
Reading:
Summary
808
810
Solved Problems
756
807
809
Key Terms
739
806
766
825
part 8 Waiting Lines 827
766
Case:
Hi-HoYo-Yo,lnc.
771
Why Is There Waiting?
Selected Bibliography and Further Reading
772
Introduction
Goal of Waiting-Line Management
Characteristics of Waiting Lines
Behavioral Aspects of Project Management
776
Reading:
Project Managers Have Never Been More
Critical 781
PERT and CPM
784
A Computing Algorithm
784
Constraint Management
The Psychology of Waiting
Deterministic Time Estimates
788
789
Probabilistic Time Estimates
836
836
850
Reading:
Hotels Exploring Easier Customer
Check-ins 855
783
Planning and Scheduling with Gantt Charts
831
Measures of Waiting-Line Performance
Queuing Model: Finite-Source
856
856
Reading:
Managing Waiting Lines at Disney World
796
830
832
Queuing Models: Infinite-Source
783
Work Breakdown Structure
830
New Yorkers Do Not Like Waiting in Line
774
776
Project Life Cycle
Managerial Implications of Waiting Lines
Reading:
P9ft 7 Project Management 773
11 Project Management
830
Operations Strategy
858
857
Contents
XXXII
Summary
858
Key Terms
858
Solved Problems
858
Discussion and Review Questions
Taking Stock
860
Critical Thinking Exercises
Problems
861
Case:
Big Bank
860
Reading:
Stopped at a Light? Why Not Read This, You
May Have Time 864
Selected Bibliography and Further Reading 865
864
860
Appendix A: Answers to Selected Problems
Appendix B: Tables 881
Photo Credits 889
Index 891
866