MGTSC 352:
Operations Management
Lecture 1
My name is ...
Kenneth Schultz
Office 340G Business
Telephone 492-3068
Email klschult
This course is …
… a continuation of MGTSC 312
Not ...
Mgtsc != Stats
“Traditional” University Course
• Class
–
–
–
–
Come to class (sometimes)
Listen to The Prof (maybe not)
Take notes (perhaps)
Get bored
• Study
– Read the text (maybe not)
– Memorize stuff (wondering why—maybe not)
• Write exams
– Sometimes multiple choice
– Sometimes regurgitation
This course
• Class
– Come to class, try to follow the lecture, participate
– Come to lab/work on your own and try to repeat
what was done in lecture
• Study
– Read the notes/text
– Read/post to discussion forums
– Do the HWs
• Do exams (on-line)
We want you to…
•
•
•
•
•
… think with us (lectures, labs)
… interact with us
… take initiative/responsibility
… experiment aggressively
… learn by DOING
• This ain’t no sit-back-and-relax, you-paysyour-fees-and-you-gets-your-credits course.
Evaluation
25%
Assignments
25%
Quizzes
Best 8 out of 9
Must get 40% to pass (10 out of 25)
Best 2: 10% each
Worst one: 5%
Must get 40% to pass
(30 out of 75)
50%
Final exam
Grade Distribution
• Similar to other 3rd / 4th year courses
• Your relative mark is what matters
Number of students
MGTSC 352, Fall 2005
70
60
50
40
30
20
10
0
66
58
51
49
36
32
25
8
7
F
D
4
21
9
D+ C-
C
C+ BGrade
B
B+ A-
A
A+
Active Learning
• Form groups of two
• Whose birthday is earlier in the year?
– You’re the recorder
• Question: What have you heard about this
course?
• Time: 1 minute
Percent recall
Why Active Learning?
100
90
80
70
60
50
40
30
20
10
0
0
5
10
15
20
Time spent lecturing (min.)
25
30
What is this course about?
Production and delivery of …
… goods and services
• Forecasting
• Simulation
• Aggregate Planning
• Distribution Planning
• Inventory Management
• Congestion Management
Show me a chart
Corporate Strategy
Marketing Strategy
Operations Strategy
Finance Strategy
Operations Management
Operations:
Inputs
Parts
Processes
Planning
People
Plants
Outputs
Another Chart: the “Process View”
Information
structure
Inputs
Process
Management
Network of
Activities and Buffers
Outputs
Goods
Services
Flow units
(customers, data,
material, cash, etc.)
Labor & Capital
Resources
Example: Amazon.Com
• Inputs:
– Customer orders
– Books, CDs
– Packing material
• Outputs
– Shipped orders
• Flow units
– Customer orders
– Cash
– Books
• Resources:
– Capital: contact centres,
warehouses
– Labor: agents, orderpickers, web programmers
– Inventory
• Activities: Order taking,
order filling, shipping
• Process management:
Warehouses, inventory,
distribution, capacity.
• Information structure:
Transaction data for each
order
Active Learning
• In your groups again
• Task: fill in as much of the next slide as
you can
• Time: 2 minutes
Example: Business School
• Inputs:
• Outputs:
• Flow units:
• Resources:
– Capital:
– Labor:
• Activities:
• Process
management:
• Information structure:
Do I have to take this course?
Majors that need 352 ASAP
Majors that require 352
• Operations Management
• Decision and Information Systems
• Distribution Management
• Accounting
• Business Studies
• Finance
• International Business
• Management Info. Systems
• Marketing
• Retailing
Majors that do not require 352
• Business Economics and Law
• Entrepreneurship and Small Business
• Human Resource Management
• ______ Studies (language programs)
• Organizational Studies
Who are we?
• Instructor: Kenneth Schultz
• Lab Masters:
– Morgan Skowronski
– Jen Tyrkalo
• Grading: Jared Coulson
• Tech Master: Angela Kercher
• Lab Accelerators
Kenneth Schultz
•
•
•
•
Wharton Undergraduate
12 Years United States Army
Ph.D. 1997, Cornell
Research: Including human behavior in
Operations Management models.
My course priorities are:
I’m fair
You learn
Morgan Skowronski
Jen Tyrkalo
Things To Do Before Next Class
• Course web
– Read the “things to do” page
WINTER 2007 MGTSC 352 LEC B1 > COURSE DOCUMENTS > RESOURCES > GENERAL
RESOURCES
– Read FAQ
WINTER 2007 MGTSC 352 LEC B1 > COURSE DOCUMENTS > RESOURCES > GENERAL
RESOURCES > FREQUENTLY ASKED QUESTIONS
– Get familiar with course web and discussion forums
• Read Introduction chapter (Course pack)
• Read syllabus
Musical Break ... do not leave
Excel Basics
• Jan 20, 11 – 1, B24/B28
• Free
• Basic Excel skills
Course Packs
•
•
•
•
$20
Today, 3-5 in B20
Wed, 10-12 in B20
Friday in labs
Model
• Selective abstraction of reality
– Model airplane
– Floor plan of a house
– Map of Alberta
• Spreadsheet (algebraic) models
– Define decision cells (variables)
– Express relations between cells (formulas)
Inputs
MODEL
Revenue = Quantity x Price
Output
Inputs
Outputs
Why model?
•
•
•
•
•
Provides a precise and concise problem statement
Establishes what data are necessary for decision
Clarifies relationships between variables
Enables the use of known solution methods
Enables us to generalize knowledge to solve
problems we haven’t encountered before, to go
beyond experiential learning.
Example
Fisheries
Management
•
•
•
•
•
Lake currently has 1,000 trout
Carrying capacity = 100,000 trout
Fish population expands in May and June
Fishing allowed in September
Trout population at end of August:
PAug = PApr + (a – (b  PApr))  PApr),
a = 0.45, b = a / capacity.
• Each fish can be sold for $11 in any year
• Discount rate is 6%.
• Which policy maximizes the NPV?
Come again?
May population = 12,000
August population?
b = a / Cap = .45 / 100,000
PAug = PApr + (a – b  PApr)  PApr)
=?
In your groups!
Time: 1 min.
Come again?
May population = 12,000
August population?
b = a / Cap = .45 / 100,000
PAug = PApr + (a – b  PApr)  PApr)
= 12,000 + (0.45 – (0.45 / 100,000  12,000))  12,000
= 12,000 + (0.396)*12,000
= 16,752
Recap
• Data
– Starting population
– Capacity
– Growth parameter (a)
– Discount rate
– Price
• Variables: # of fish caught, for every year.
• Output: NPV (and fish population every year)