Weatherhead School of Management
Case Western Reserve University
OPERATIONS MANAGEMENT
MBAC 425 (1,2,3)
Spring 2003
Instructor:
Telephone:
Office:
Professor Yunzeng Wang
(216) 368-3811 Fax: (216) 368-6250
E-mail: yxw36@po.cwru.edu
PBL 324
Office Hours:
Thursday, 3:15-4:30 PM, or by appointment
Teaching Assistants:
Secretary:
Vera Tilson tel: 368-2196; e-mail: vxt15;
Amit Saharia e-mail: axs241
Antonis Printezis tel: 368-5009; e-mail: axp68;
Susan Rischar Telephone: (216) 368-3845 Fax: (216) 368-4776
E-mail: sjr14@po.cwru.edu
COURSE DESCRIPTION
Operations Management deals with the part of an enterprise that creates value for its customers. It involves
designing goods and services, producing goods and providing services, and the physical distribution of goods
and services. As global competition in both goods and services increases, a firm's survival depends upon how
well it integrates the operations function into the enterprise’s planning and strategy. Thus, it is essential for
all business managers to acquire an understanding and appreciation of operations.
The objective of this course is to provide you with an understanding of operations and the roles that
they play in an organization. By the end of the course, you should appreciate the challenges in providing
world-class products and services and you should be able to use some analytical tools and conceptual
frameworks to guide your thinking about operations. In particular, you should leave this course with a better
understanding of:
 The role of operations in supporting business strategy
 How to identify and define key business processes.
 How to define clear performance objectives and process measures.
 How to use data and analytical tools to improve the effectiveness of processes.
 The impact of an organization’s context upon process management and improvement.
 Key issues and techniques for managing an organization’s supply chain
COURSE MATERIALS
1. Cases and readings: course pack at the campus bookstore.
2. The Goal by E. M. Goldratt and J. Cox, 2nd revised edition, North River Press, Great
Barrington, Mass., 1992.
We don not require a textbook. However, if you would like a reference, you might consider:
Operations Management by L. J. Krajewski and L. P. Ritzman, 5th edition, Addison Wesley, Reading,
Mass., 1999.
1
COURSE REQUIREMENTS
The course involves a combination of lectures and class discussions of cases and readings that are contained
in the course pack or to be distributed during classes. As described below, the workload consists of class
participation, written assignments and two examinations. The course grade will be based on the weights
shown in parenthesis.
Class Participation (15%)
Students are expected to come to class well prepared to be active participants in the learning process. So you
should read before each class all the assigned materials and be fully prepared to participate case discussions.
Your semester’s participation is evaluated based on the quality and quantity of your contributions, with a
strong emphasis on quality.
Skill Building Exercises (20%)
During the semester there will be four (4) exercises assigned to help you practice particular techniques.
These assignments should be written and handed in individually, although groups of students may discuss
and work together on the problems.
Report on The Goal (10%)
The Goal is an entertaining, though deceivingly simple, business novel. It should help you to develop some
basic problem solving skills that are useful not only in operations, but also in general management as well. It
is recommended that you read it twice: once at the beginning of the semester to give you a taste for what is to
come, and once at the end of the semester to tie everything together.
On the last day of class, you are expected to turn in a report (at most three pages) on The Goal. In your
report, be sure to answer the specific questions listed in a related homework assignment.
Mid-Course (25%) and Final Examinations (30%)
See Course Outline for scheduled dates of the two exams.
COURSE POLICIES (These policies are meant to be enforced.)
1. Late submission of exercises will NOT be accepted and NOT be graded.
2. Submit your homework in hard copies and bind/staple them properly whenever you have multiple pages.
Electronic submissions are NOT accepted, unless a special permission has been issued from the
instructor.
3. DO NOT use your laptop computer during classes and exams. You will only need your computer
to do your homework after class for this course. Bring a simple calculator for exams.
4. Turn off your cellular phones or pagers upon entering the classroom.
5. All students are expected to adhere to CWRU’s Honor Code. Each student is individually responsible for
proper conduct in matters of coursework and assignments. Undue cooperation on individual assignments
is not appropriate Student behavior deemed to be discreditable as determined by the instructor and the
TA may result in a reduction of grade for the assignment/s involved or for the course as a whole or both.
2
COURSE OUTLINE
Module I Operations Process Analysis, Capacity Management and Quality Control
No.
1
Date
Topics and Assignment
1/13, Mon.
Course Overview, Introduction to OM
Read:
2
1/15, Wed.
Syllabus
Process Analysis Fundamentals
Read:
3
Process Fundamentals
Lecture Notes (Slides) on Process Fundamentals
1/20, Mon.
No Class (Martin Luther King Holiday)
1/22, Wed.
Measuring Capacity
Kristen’s Cookies Company (A)
Read:
Prepare the following questions for class discussions:
1. Draw a process flow diagram for cookies production at Kristen’s.
2. How quickly can Kristen fill an order for 1 dozen cookies?
2 dozens? 3 dozens?
3. What is the maximum rate at which Kristen can produce cookies if she
makes batches of 1 dozen, 2 dozens and 3 dozens respectively? What
assumptions do you have to make?
4
1/27, Mon.
Align Process Design with Business Objectives
Video:
Read:
Production Processes
McDonalds Corporation (McD)
Burger King Corporation (BK)
Prepare the following questions for class discussions:
1. For each of the two cases (McD and BK), draw a process flow diagram.
2. What are the different competitive strategies adopted by McD and BK?
How do they achieve their respective strategies through the design of their
production processes?
Turn-in:
Skill Builder Exercise #1
3
5
1/29, wed.
Bottleneck Analysis and Congestion
Read:
National Cranberry Cooperative
Prepare the following questions:
1. Draw a process flow diagram showing the major process steps,
inventories and flows for cranberry processing. Indicate the capacity at
each of the process steps.
2. In Exhibit 2 of the case it is shown that, over the 20 days from 9/20/ to
10/9, an average of 16,400 barrels per day are delivered. Assume that on
average each truck carries 75 barrels, and that trucks arrive uniformly over
a 12 hour period. Also assume that during this period, the trucks carry
70% wet berries and 30% dry berries.
a. Which operation(s) are bottlenecks? Note that both dry and wet
berries can be run through the system at the same time.
b. How much overtime is required?
c. Why are the truck waiting times so high?
6
7
2/3, Mon.
Capacity Planning for Services: Performance Measures and Analytical Tools
Read:
Lecture Notes (Slides) on Managing Customer Waiting Times
A Note on the Management of Queues
Turn-in:
Skill Builder Exercise #2
2/5, Wed.
Read:
Managing a Capacity Constrained Service System
The New York Police Department (NYPD) Patrol System
Prepare the following questions:
1. Construct a queuing model for NYPD patrol system. Identify “customer”
arrivals, the server, etc. in the system.
2. How do you measure service for systems?
3. Assuming that you have 18 patrol cars, how should you allocate them
among the 6 precincts? (Each car can be assigned to only one precinct.)
What is the objective that you are trying to achieve when you make your
allocation decision? Are there alternative objectives that should be
considered?
Review for Midterm Exam
8
2/7, Fri.
Midterm Exam 3:30 pm – 5:30 pm
Room assignments to be specified before the exam. NO lap top computer is allowed.
4
9.
2/10, Mod.
Read:
10.
2/12, Wed.
Quality Management
Lecture Notes (Slides) on Quality Management
On Some Statistical Aids Towards Economic Production
Constructing and Using Process Control Charts
Quality Management (continued)
Read:
11
Lecture Notes (Slides) on Quality Management
On Some Statistical Aids Towards Economic Production
Constructing and Using Process Control Charts
2/17, Mon.
No Class (plant tour week)
2/19, Wed.
No Class (plant tour week)
2/21, Fri.
Plant Tour
Read:
(Detailed instruction and schedule will be provided later.)
Why (and How) to Take a Plant Tour
Module II
Inventory and Supply Chain Management
12
Plant Tour Debriefing
Performance Measures and Basic Trade-offs of Inventory Polices
13
2/24, Mon.
Read:
Lecture Notes (Slides) on Inventory Management
Turn-in:
Skill Builder Exercise #3
2/26, Wed.
Read:
14
3/3, Mon.
Read:
Performance Measures and Basic Trade-offs of Inventory Polices (continued)
Lecture Notes (Slides) on Inventory Management
Identifying Opportunities for Improving Teradyne’s Service-Parts
Logistics System
Implementing a Control Policy for a Production and Inventory System
Blanchard Importing and Distributing Company, Inc.
Prepare Questions:
1. What is wrong with the way that the EOQ and ROP quantities have been
determined for each of the five items mentioned in the case? Are the
formulas used correctly? Are the values of parameters taken correctly?
2. Assuming that an EOQ/ROP system is an appropriate way to run this system, how
would you correct the EOQ/ROP quantities for the five items? How do the
corrected figures compare with the quantities calculated in 1969 and with
production volumes scheduled for the June 1972 bottling run?
5
15
3/5, Wed.
Inventory Pooling and Postponement Strategies in Supply Chain Management
Read:
Hewlett-Packard: DeskJet Printer Supply Chain (A)
Acme Widget Company
Prepare Questions for the Hewlett-Packard case:
1. What are the major problems facing H-P in its DeskJet printer supply
chain?
2. What are the potential solutions?
Turn-in:
16
3/10,Mon.
No Class (Spring Break)
3/12, Wed.
No Class (Spring Break)
3/17, Mon.
No Class (Beer Game Week)
3/19, Wed.
No Class (Beer Game Week)
3/21, Fri.
The Beer Game
In Room 103: Session I 9:00 am – 12:00 noon; Session II 1:00 pm – 4:00 pm
Read:
17
3/24, Mon.
The Beer Game: Board Version
Supply Chain Coordination
Video:
Read:
18
Skill Builder Exercise #4
3/26, Wed.
Aligning Supply and Demand: Creating the Right Supply Chain
What Is the Right Supply Chain for Your Product?
Discussion of “The Goal”
Turn-in:
Report on The Goal
Course Review
19
4/4, Fri.
Final Exam
2:00 pm – 4:30 pm
Room Assignments to be specified later. NO lap top computer is allowed.
6
OPERATIONS MANAGEMENT
MBAC 425, Spring 2003
Instructor: Professor Yunzeng Wang
Course Pack Content
1. Process Fundamentals
2. Lecture Notes (Slides) on Process Fundamentals
3. Kristen’s Cookie Company (A)
4. McDonald's Corporation (Condensed)
5. Burger King Corporation
6. National Cranberry Cooperative
7.
Lecture Notes (Slides) on Managing Customer Waiting Times
8. A Note on the Management of Queues
9. The New York City Police Department (NYPD) Patrol System
10. Lecture Notes (Slides) on Quality Management
11. On some Statistical Aids Towards Economic Production
12. Constructing and Using Process Control Charts
13. Why (and How) to Take a Plant Tour
14. Lecture Notes (Slides) on Inventory Management
15. Identifying Opportunities for Improving Teradyne’s Service-Parts Logistics System
16. Blanchard Importing and Distributing Company, Inc.
17. Hewlett-Packard: DeskJet Printer Supply Chain (A)
18. Acme Widget Company
19. The Beer Game: Board Version
20. What Is the Right Supply Chain for Your Product
7