USC MARSHALL SCHOOL OF BUSINESS
OPERATIONS MANAGEMENT
GSBA 534
Fall 2013
INSTRUCTOR
Professor Murat Bayiz
Bridge Hall, Room 401G
Phone: (213) 740 5618
E-mail: murat.bayiz@marshall.usc.edu
OFFICE HOURS
Thursdays: 4:00 – 5:00 pm and Fridays: 11:00 am – 12:00 pm
COURSE OBJECTIVE AND DESCRIPTION
Operations managers are primarily concerned with the design, procurement, production, and delivery of
goods and services. They are responsible for the systematic planning, designing, operating, controlling
and improving the various procurement, production, storage, and shipping processes involved from the
time the product or service is designed till customer delivery occurs. The challenge for operations
managers is to produce goods and services and deliver them in an efficient manner and in accordance
with the business strategy of their company. Typically, this involves balancing the needs for satisfying
customer demand, on-time delivery, lower costs, and higher quality. How do organizations such as
financial institutions, health care, and manufacturing meet customer needs and stay consistent with their
goals and values? How do organizations make trade-off decisions in the presence of uncertainty?
Operations Management provides tools and methods to optimally answer these questions in a global
business world.
In this course you will learn the fundamentals of Operations Management, enhance your managerial
insight and intuition, and improve your business decisions.
More specifically, we will investigate the following aspects of Operations Management to practice
decision-making skills:
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Process Analysis and Capacity Management
Managing Uncertainty
Optimization and Linear Programming
Matching Supply and Demand
Operations Strategy
Supply Chain Management
Global Operations
Revenue Management
This will be accomplished through: (i) understanding of the business environment and the structure of
important operational problems; (ii) analysis of the relevant principles, issues, and trade-offs; and (iii)
working knowledge of relevant methodological tools, solution procedures, and guidelines.
COURSE MATERIALS
Required Book:
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“The Goal” by Goldratt and Cox, 3rd edition, North River Press
Optional Text Books:
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OPERATIONS MANAGEMENT
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“Operations and Supply Chain Management” by Jacobs and Chase, McGraw-Hill Irwin, 2013 (14th
edition)
“Matching Supply with Demand: An Introduction to Operations Management” by Cachon and
Terwiesch, McGraw-Hill, 2011
Online Course Reader - Containing cases which can be purchased from Harvard Business Online. To
purchase the case, you need to go to https://cb.hbsp.harvard.edu/cbmp/access/20237825 and register /
sign in. The website will allow you to purchase the cases using your credit card.
Supply Chain Management Simulation: Root Beer Game: Please go to
https://cb.hbsp.harvard.edu/cbmp/access/20237858 and sign in to purchase the license. After the
purchase, you will have access to the simulation game, which we will play together in class.
Blackboard Files - Additional articles and notes will be posted on the Blackboard.
GRADING
Your grade in this course will be based on individual class participation, group assignments, individual
assignments and tests. I will try to assess your understanding of the tools and concepts covered, your
ability to integrate and apply those concepts and your contribution to the learning experience of the class
as follows:
Homework assignments
Mid-term exam
Final exam
Group case write-ups
“The Goal” book report
Root Beer game debriefing report
Little Field game debriefing reports
15%
25%
30%
10%
5%
5%
10%
HOMEWORK ASSIGNMENTS
Homework counts for 10% of your course grade. There will be 5 homework assignments. A typical
assignment will consist of 2-3 questions related to subject discussed in the previous weeks.
MIDTERM EXAM
It counts for 25% of your course grade. The exam will be a take home exam (open book/notes) with 24
hours limit.
FINAL EXAM
It counts for 30% of your course grade. The final exam will be a take home exam (open book/notes) and
cumulative but the emphasis will be on the subjects covered after the mid-term exam. If there are
extenuating circumstances that prevent you from taking an exam during the allocated time, you must
discuss the reason with me before the time of the exam. You will not be given a make-up exam unless
you obtain permission from me in advance. In addition, you must be able to document the extenuating
circumstance. If you miss the exam due to a medical emergency that can be documented and verified,
then a make-up exam will be given. Otherwise, a grade of zero will be given for the missed exam.
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OPERATIONS MANAGEMENT
GROUP CASE WRITE-UPS
You are required to turn in three complete case analyses. It will be done in a learning team of 5-6 students.
The written report should be no more than 5 pages (excluding appendices). Your write-up should
recommend a solution. The recommendation should be supported by clear, well thought-out analysis. You
will also lead off the discussion for the case that you have been assigned.
The report should contain the following:
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Brief discussion of the company and its environment
Brief description of the problems
Analysis that links the problems to its causes
Recommendations - short term and long term
Implementation plan and the risks
Short-term solutions should be to implement in the sense that they require less effort, time and
resources.
Please ensure that the report is well organized with clear section and sub-section headers. The questions on
the case are given to help you focus on the relevant issues. You may, in addition, want to consider other
issues that you consider important in your analysis. Therefore, do not organize your report in the form of a
response to each of the discussion questions.
“THE GOAL” BOOK REPORT
It counts for 5% your grade. Summarize your main take-away’s (“what is worthwhile remembering 5
years from now?”) and critically assess their value and usefulness.
ROOT BEER GAME DEBRIEFING REPORT
It counts for 5% your grade. The Root Beer Game will help us to understand the significance of major
issues and bullwhip effect in supply chains. Every student must purchase a license from Harvard
University and register. Details will be posted in Blackboard.
LITTLE FIELD GAME REPORTS
There will be two reports and they count for 10% of your grade. Littlefield Laboratory Game is a
competitive web-based factory simulation (http://www.responsive.net) by Littlefield Labs. It consists of
two assignments, each lasting seven days. In each assignment the student teams will compete to make
the most money by managing a factory. The first simulation game focuses on capacity management in an
environment with growing demand. The second simulation game focuses on leadtime and inventory
management. Every student must purchase a Littlefield Labs Access Code. Students must register their
teams according to the instructions. Each team should have 5 or less students. In addition to the Access
Code, you need the following course code to register: usc.
NOTICE ON ACADEMIC INTEGRITY
The use of unauthorized material, communication with fellow students during an examination, attempting
to benefit from the work of another student, and similar behavior that defeats the intent of an
examination or other class work is unacceptable to the University. It is often difficult to distinguish
between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying
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OPERATIONS MANAGEMENT
examinations. Where a clear violation has occurred, however, the instructor may disqualify the student's
work as unacceptable and assign a failing mark on the paper.
Academic dishonesty includes: (Faculty Handbook, 1994: 21-22):
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Examination behavior - any use of external assistance during an examination shall be considered
academically dishonest unless expressly permitted by the teacher
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Plagiarism - the appropriation and subsequent passing off of another’s ideas or words as one’s
own. If the words or ideas of another are used, acknowledgment of the original source must be
made through recognized referencing practices
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Other types of academic dishonesty - submitting a paper written by or obtained from another,
using a paper or essay in more than one class without the teacher’s express permission,
obtaining a copy of an examination in advance without the knowledge and consent of the
teacher, changing academic records outside of normal procedures and/or petitions, using another
person to complete homework assignments or take-home exams without the knowledge or
consent of the teacher
FOR STUDENTS WITH DISABILITIES
Any student requesting academic accommodations based on a disability is required to register with
Disability Services and Programs (DSP) each semester. A letter of verification for approved
accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the
semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00 p.m., Monday through
Friday. The phone number for DSP is (213) 740-0776.
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OPERATIONS MANAGEMENT
TENTATIVE CLASS SCHEDULE
WEEK 1 – AUGUST 30, 2013
Discussion Topics:
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Course Introduction
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Introduction to Operations Management
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Process Analysis
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Process Measures
Reading:
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[Online Course Reader] A Note On Process Analysis
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[Blackboard] Teaching Note – Process Analysis
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Make sure you have started reading “The Goal” due Week # 3
WEEK 2 – SEPTEMBER 6, 2013
Discussion Topics:
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Capacity Analysis
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Little’s Law
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Type of Processes
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Donner Case Discussion
Reading:
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[Online Course Reader] Types of Processes
Case Discussion:
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[Online Course Reader] Donner Company
Discussion questions:
1. What is the normal process flow of the production system at Donner? Draw a process
flow diagram.
2. What orders would you schedule on the CNC drill? On the CNC router?
3. What is the capacity of the Dry Film Photoresist area? (Assume the order size is
eight.) How does capacity change with order size?
4. What is the standard labor time for an order of 1 board? 8 boards? 200 boards?
Assignment:
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[Group of Two] Short Write-up on Donner Company – Three important point to discuss
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OPERATIONS MANAGEMENT
WEEK 3 – SEPTEMBER 13, 2013
Discussion Topics:
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“The Goal”
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Theory of Constraints
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Introduction to Waiting Lines
Reading:
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“The Goal”
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[Blackboard] The Psychology of Waiting-lines
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[Blackboard] Teaching Note – Variability and Queues
Assignments:
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[Group of Two] Homework # 1 – Process Analysis
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[Group of Two] Book Report on “The Goal”
WEEK 4 – SEPTEMBER 20, 2013
Discussion Topics:
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Waiting line classifications and formulations
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Waiting lines rules and principles
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Simulation
WEEK 5 – SEPTEMBER 27, 2013
Discussion Topics:
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Optimization Models
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Linear Programming and Excel Solver
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Class Exercise - Blue Ribbon Foods Case
Reading:
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[Blackboard] Teaching Note – Linear Programming
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[Blackboard] “Did You Hear the One About the Salesman Who Traveled Better?”
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[Blackboard] Blue Ribbon Foods Optimization Exercise
Assignment:
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[Group of Two] Homework # 2 – Waiting Lines
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OPERATIONS MANAGEMENT
WEEK 6 – OCTOBER 4, 2013
Discussion Topics:
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Linear Programming Applications in Supply Chain Management
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Applichem (A) Case Discussion
Case Discussion:
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[Online Course Reader] Applichem (A)
Discussion Questions:
1. Given the plant capacities, how much should be produced in each plant and how much
transported from the various plants to the various demand locations? (Assume for your
analysis that demand in Mexico and Canada are 3 and 2.6M lbs. respectively. In 1982,
Mexico shipped 6.3 and 7.9 M lbs. respectively to Latin America and Far East and Frankfurt
shipped 5.6 and 12.4 M lbs. respectively to Latin America and the US.) Use Solver in Excel.
2. Compare the performance of Applichem’s six release-ease plants. How do we measure
productivity and compare it across plants? Why were some plants “better” performers than
others? To what extent can these differences be attributed to differences in scale, utilization
rates, and other factors beyond the control of management? What would you do to improve
the performance of the entire plant network?
3. Is Gary’s claim credible that they would be efficient if the comparison was based on 1977
numbers? Analyze using the data in Exhibits 6 and 2.
4. What is the plant configuration you would recommend? Should they close any of the plants?
Assignment:
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[Group] Case Write-up on Applichem
WEEK 7 – OCTOBER 11, 2013
Discussion Topics:
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Operational Performance Metrics and Benchmarking
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Operations Innovation
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Review for Midterm
Assignment:
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[Group of Two] Homework # 3 – Optimization
Reading:
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[Online Course Reader] Deep Change: How Operational Innovation Can Transform Your
Company
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OPERATIONS MANAGEMENT
WEEK 8 – OCTOBER 18, 2013
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Take Home Mid-term Exam
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No class session – Will hold on-line office hours during class hours instead
WEEK 9 – OCTOBER 25, 2013
Discussion Topics:
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Matching Supply and Demand
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Dynamics of Supply Chains
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Root Beer Game
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Bull-whip Effect
Reading:
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[Blackboard] Teaching Note – Inventory Management
Assignment:
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[Group of Two] Homework # 4 – Inventory Management
WEEK 10 – NOVEMBER 1, 2013
Discussion Topics:
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Inventories: Why We Need Them
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Relationship Between Uncertainty and Inventory Levels
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Make or Buy
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Operations Strategy
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Instructions for the First Littlefield Game
Case Discussion:
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[Online Course Reader] Sport Obermeyer
Discussion Questions:
1. Using the sample data given in Exhibit 10, make a recommendation for how many units
of each style Wally Obermeyer should order during the initial phase of production.
Assume that all ten styles in the sample problem are made in Hong Kong, and that
Obermeyer’s initial production commitment must be at least 10,000 units. Ignore price
difference among styles in your initial analysis.
2. What operational change would you recommend to Wally to improve performance?
3. How should Obermeyer management think, both short- and long-term, about sourcing in
Hong Kong vs. China?
Assignments:
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[Individual] Debriefing Paper on Root Beer Game
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OPERATIONS MANAGEMENT
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[Group] Case Write-up on Sport Obermeyer
First Littlefield Game Starts at 7:00 pm, November 4, 2013
WEEK 11 – NOVEMBER 8, 2013
Discussion Topics:
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Global Supply Chains
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Vertical Integration
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Global Operations
Case Discussion:
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[Online Course Reader] Zara: Fast Fashion
Discussion Questions
1. With which international competitor listed in the case is it most useful to compare
Inditex’s financial performance? What do comparisons indicate about Inditex’s operating
economics? Why?
2. How specifically do the distinctive features of Zara’s business model affect its operating
performance? (In order to make comparisons with other firms you can assume that retail
prices are twice the manufacturing selling price).
3. Can you graph the linkages among Zara’s choices about how to compete, particularly
ones connected to its quick response capability, and the way in which they create
competitive advantage?
4. Why might Zara fail?
5. How well does Zara’s strategy travel globally?
6. What is the best way to grow the chain?
Assignment:
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[Group] Case Write-up on Zara
First Littlefield Game Ends at 7:00 pm, November 11, 2013
WEEK 12 – NOVEMBER 15, 2013
Discussion Topics:
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Lean Operations
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Six Sigma
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Instructions for the Second Littlefield Game
Reading:
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OPERATIONS MANAGEMENT
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[Blackboard] Decoding the DNA of the Toyota Production System By Steven Spear and Kent
Bowen
Assignment:
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[Group] Debriefing Report for First Littlefield Game
Second Littlefield Game Starts at 7:00 pm, November 18, 2013
WEEK 13 – NOVEMBER 22, 2013
Discussion Topics:
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Managing Demand
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Pricing
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Revenue Management
Reading:
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[Blackboard] “Introduction to the Theory and Practice of Yield Management” Serguei
Netessine and Robert Shumsky, INFORMS Transaction on Education
Second Littlefield Game Ends at 7:00 pm, November 25, 2013
WEEK 14 – NOVEMBER 29, 2013
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No Class – Thanksgiving Holiday!
WEEK 15 – DECEMBER 6, 2013
Discussion Topics:
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Managing Variety
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Product and Service Modularity
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Risk Pooling
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Course Wrap-up
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Final Exam Review
Assignment:
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[Group] Debriefing Report for Second Littlefield Game
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