Use of ExtendSim in a Service Operations Management Course at the William E
Simon Graduate School of Business Administration.
Phillip J Lederer
William E Simon Graduate School of Business Administration
University of Rochester
Rochester NY
14627
Report on use during Fall Quarter 2012
I would like to report on my use of the simulation package in my MBA course: OMG
412: Service Operations Management in the Fall 2012. This is a second year elective
course taken by about 20 students.
The simulation package was a central part of the course. I attach a syllabus of the class
which shows sequence to topics taught, and specifically how I used ExtendSim.
The software fit quite well into the topic of the course which was managing service
systems. In terms of applications, the package was used by students to model various
service operations. Many of the cases were based upon Harvard Business School cases
(BAT, Benihana, CVS).
A car wash (an exercise from ExtendSim examples)
Police dispatching policies for patrol cars
Managing a technical call center and priority rules (BAT case)
Capacity analysis of a restaurant (Benihana of Tokyo)
Process improvement of a retail drug store (CVS case)
Organizing a salesforce (Baria Harvard Case)
What is most enlightening is the list of homework assignments related to ExtendSim
Training materials:
I was greatly aided by Robin Clark who shared his knowledge of ExtendSim with me.
I continued to make tutorial videos to help my students learn ExtendSim. I added a
couple of new ones on more detailed issues.
THE WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION
UNIVERSITY OF ROCHESTER
OMG 412
Service Operations Management
Phillip J. Lederer
Fall 2012
SYLLABUS Service
Management
Prof. Phillip J. Lederer
Office: Carol Simon 3306B 275-3368
Email: Lederer@simon.rochester.edu
COURSE INFORMATION
Overview and Objectives
The service sector dominates the economies of most developed nations. Worldwide, services
account for 64% of GDP and 40% of employment, and in the United States the service sector
accounts for 76% of GDP and 85% of employment. In addition to the “pure” service sector,
the delivery and support of many goods involves a significant service component. The
challenges involved in managing services have been complicated by globalization, for many
services are now delivered by service supply chains that involve multiple firms and cross
national boundaries.
In this class we will develop both quantitative tools and qualitative models that will help us to
manage in this complex environment. The class focuses on four topics: (i) understanding
business strategy for services, (ii) process improvement in services (iii) modeling service
systems using discrete time software, and (iv) demand and revenue management.
In general, two themes will run throughout the course: the importance of aligning the design
and management of services with the marketing strategy of the firm and analyzing service
systems to improve performance. We will see how management lessons from the
manufacturing sector can sometimes be useful, and sometimes inadequate, when managing
services. For both manufacturing and service firms, the strategic mission can be described in
terms of cost, quality, delivery, and flexibility. In services, however, defining and measuring
these qualities can be particularly challenging. Likewise, we have seen that manufacturing
firms can struggle to handle variability in customer demands and production times. Service
firms are faced with additional sources of variability, including customers’ expectations,
subjective preferences, impatience and their willingness or ability to participate in elements
of the service process.
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These concepts will be illustrated with examples from health care, public services, retail, food
service, airlines, and business process outsourcing. The course will also examine the
interactions among service operations management and other functions and areas of research,
particularly marketing, information systems, and organizational behavior.
Because it is usually fruitless to discuss service management without some context, the
class will be primarily case-based.
What you will learn:
This course is designed to provide a structured approach to analyzing service
processes. By the end of the course, my goal is that you will have the following
skills to
Build a model of a service system using simulation tools, thereby
predicting capacity and delays
Analyze the strategic fit of operations and marketing in a service
business
Improve front room and backroom processes
Learn the basics of revenue management systems
Specific quantitative tools will be learned or practiced:
Discrete time simulation
Monte Carlo S imulation
Linear programming
Revenue Management models
Materials
Class materials are to be found at the university’s Blackboard site: www.myrochester.edu. I
will try to post all handouts. Thus if you miss a class you will have access to handouts
on the web.
You are to purchase the Harvard cases from their online store which lists the cases that I will
use. Go to http://cb.hbsp.harvard.edu/cb/access/10742886
Cases not on Harvard’s list will be distributed by me in class.
You should have QMacros installed on the computer you use.
You will buy the ExtendSim LT software from a website that I will post on Blackboard. The
cost is $25 and is a bargain for this powerful software package. However the license
will expire after 180 days. The good news is the our computing center will continue to
have the software available in the computer lab.
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Office Hours
I will keep office hours as follows: before class on Tuesday from 3 to 5:15pm and by
appointment. It is not necessary to have an explicit question to make an appointment.
Please come see me if you wish to talk about anything related to the course or need some
special help.
Web Site
The course’s web site is accessible at http://my.rochester.edu. Most class handouts will
be available in Acrobat format there.
E-mail
If any corrections to assignments occur mid-week I will email you, so be sure I have the
email addresses that you wish me to use. I will use your University of Rochester email
address as a default.
Study Teams:
I ask you to organize yourself into study teams of 2 students. Study teams will prepare
cases for collection. I also would encourage team members to help each other on
problem sets. (However, problem sets are submitted by individuals, and should be the
work of your own hand.)
Cases
The purpose of studying cases is (at least) four-fold. First, cases represent real situations
and thus provide real examples. Second, cases impart institutional data and details.
Context is often important when solving any real operations problem. For example, the
incentive structure within the firm may support or hinder a particular problem solution.
Third, cases give us the opportunity to apply learned theory and tools to more realistic
situations. They will also force us to consider how the ideas from other courses must be
integrated to develop a complete solution. Fourth, cases are often messy and complex
problems that sharpen skills in problem identification, problem modeling, and problem
solving.
Class Discussion and Class Participation
Most managers spend very little time reading and even less time writing reports. Most
of their interactions are oral. I encourage you to participate because I am convinced that
active participation leads to better learning and understanding. I also think that skill at
presenting and defending arguments is a valuable managerial skill.
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I want to encourage you to participate in class discussion, and thus will grade class
participation. This means of course that you need to attend class, have done the
assignments, and follow the flow of class interactions.
Here are some of my observations about contributing to discussions.
1)
Make remarks relevant to what the current discussion is. To do this one needs to
be a good listener!
2)
Link your comments to the comments of others.
3)
Be willing to test new ideas and support them even if it seems to be the minority
view.
4)
Asking clarifying questions helps you and me. Your question helps me to
understand if I need to better explain a concept or point. But please show some
judgment—a question that is off topic does not aid class learning.
Class participation is broader than participating in discussions, so there are other ways to
contribute to the class. For example, being willing to present your solution to a
case or homework assignment,
Requirements
The course has four graded components: case discussion, team case write-ups, two individual
quizzes, and/or a project. The project is optional: students may choose to either take the
second individual quiz or complete a project.
1. Case Discussion Contribution All students should be prepared to discuss all cases,
including cases for which no work is submitted. While I will do my best to prepare for and
facilitate our discussions, the quality of the learning experience depends primarily upon your
own preparation and your constructive participation. I will judge your contribution on the
extent to which you appear prepared, the relevance and depth of your comments, the degree
to which you listen carefully and respond to your peers, and your willingness to take chances
in order to further the educational experiences of others.
Team Case write-ups Each team will write up and submit a report on the cases.
However, your grade will be based upon the best 5 cases submitted. Two of the cases are
required by all teams: “BlueSky (A) and (B)”, and “Transportation National Group.”
2.
3. Quizzes There will be two quizzes. The first will focus on process design and service
strategy. The second quiz will focus on revenue management. Students may either take the
second quiz or complete a project.
4. Project. Students who complete a project will not take the second quiz. Students who
choose to complete a project are expected to apply the techniques in the class to a real-world
problem. Projects are done individually. A successful project must use a technique
developed in class to help solve an organization’s service operations problem. For example,
examine the admissions procedure for Strong Hospital emergency room and create a
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simulation model (using the ExtendSim software package), identify bottlenecks, and suggest
process improvements. If you are an entrepreneur, you might consider a project that describes
a new service business. You will submit an operations and marketing plan with supporting
analysis. The deliverable for the project is a PowerPoint presentation that describes the goals
of the project, the analysis, and the results. You may also be asked to present to the class on
the last day. If you wish to do a project, a proposal is due by the 5th class meeting. I will
schedule meetings to discuss projects just after these proposals are due.
Attendance and Laptop Policy
Everyone is expected to attend and to prepare fully for each session. If you plan to miss a
class, notify me--a simple e-mail will do.
If you are unprepared for class, please let me know before class begins. (You will avoid
embarrassment and wasting the class’ time, too!
I would like you to bring your laptop to class for every class. I ask this so we can learn and
practice software packages. If you cannot bring a laptop, it will be fine to work along with a
colleague in class who has one. In any case, all datasets discussed or analyzed in class will
be available at the course web site on SimonExchange.
In class, your laptop should only be used for class activities such as working on an in-class
tutorial, taking notes, or referring to a spread sheet. Of course, you should not be conducting
any non-class activities such as email during class time.
Grading
Your grade will be determined as an average with the following weights:
20% Class Contribution
40% Team Case write-ups
20% Quiz 1
20% Quiz 2 or Project
Unless otherwise indicated by shading: all classes meet at 5:50-8:50pm in Schlegel 103.
Text and Cases to Buy
We will use the following text in the unit on revenue management.
Pricing and Revenue Optimization by Robert Phillips. Stanford Business Books
Cases can be bought at the Harvard Business School Case site:
http://cb.hbsp.harvard.edu/cb/access/15557020
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The Preliminary Schedule is subject to change based upon weekly progress. Check with
the weekly assignment sheet for the up-to-date schedule and assignment.
Shaded boxes are irregularly scheduled sessions (not the usual Tuesday schedule)!
Week 1
Topic of class
Thursday 13
September 7:308:50
September 18
Tuesday
2
3
September 25
Tuesday
4
October 2-No
Class
October 9
Tuesday
October 9
Tuesday
5
6
October 16
Tuesday
HW due for this sessionfor details look at the
weekly assignment sheet.
(Please follow the up-todate weekly assignment
sheet as the precise
assignment.)
Intro to course
and service
strategy
Case discussion
Shouldice Hospital
and introduction
to ExtendSim
modeling
ExtendSim Tutorial
Case discussion
and managing the Benihana
front room
Case discussion
and managing the
backroom
BAT case
Case discussion
and more on
ExtendSim
Case discussion
and ExtendSim
Baria Planning Solutions
CVS Case
7
8
October 23
Tuesday
Quiz 1
Introduction to
Revenue
Management
October 30
No Class
November 6
Tuesday
November 13
Tuesday
Revenue
Management II
Exercises in linear
programming
Revenue
Management III
Blue Sky A,B,C cases
10
November 20
Tuesday 5:50-7:30
Revenue
Management IV
11
November 27
Tuesday
December 4
Tuesday
Revenue
Management V
Topic to be
arranged.
Wrap up
9
12
Transportation National
Group
Special Baria Assignment:
OMG 412
Service Operations Management
Professor Phil Lederer
Homework for week 6: Due Wednesday October 24, 2012
I have decided to give you a take home midterm quiz which will be due on Friday
October 27, at 5:50 at my office: CS 3306B.
We will not have a regular class meeting on Tuesday, October 23rd. Instead, on that
evening I will teach a half a class and be available thereafter to give any interested
student help with ExtendSim. I also will be available by appointment.
The midterm will be based upon the case: Baria Planning Solutions: Fixing the Sales
Process.
This case studies the operation of the proposal process at a consulting firm. The process
is not working very well. What I would like you to do is present a report addressing these
issues:
1.
2.
What factors contribute to the Sales Support group missing deadlines? In
particular, how are renewals scheduled? How could scheduling be improved?
There are several ways to solve the problems that Baria is having. Describe
two, indicating the pro’s and con’s of each.
To help you, I will post an xls file on Blackboard that contains all the Exhibit data of the
case, and several xls pages with summary data.
You may make simplifying assumptions. Clearly there are some issues for which you
have little or no information. Just make your assumptions clear.
3.
Select your favored solution and build an ExtendSim model that simulates an
alternative proposal process. Try to use only the simulation features we have
discussed in class so far. Thus simplification will probably be necessary. But
many features can be captured, such as time-dependent order arrivals, lateness
and on-time delivery, etc. Make sure to simulate the process for a one year
period. Included seasonality in arrival patterns.
4.
Use the ExtendSim model to compare key performance data found in the
distributed spreadsheets with your results. Prepare confidence intervals for
any statistics gleaned from ExtendSim.
I will be available for coaching on ExtendSim. If you are stuck, give me a call.
As you see, the exam answers are due the following Friday.
Ground rules: you are to analyze the case, propose your suggested
improvements and build your ExtendSim model alone without any assistance
or reference to any materials you might find on the web or elsewhere. I will
ask you to sign a pledge to this effect with your submiss