Operations Management – Sustainability and Supply Chain Management

Operations Management – Sustainability and Supply Chain Management
Jay Heizer
Jesse H. Jones Professor of Business Administration Texas Lutheran University
Barry Render
Charles Harwood Professor of Operations Management Graduate School of Business
Rollins College
Chuck Munson
Professor of Operations Management Carson College of Business Washington State University
Table of Contents
About the Authors vi
Preface xxiii
Chapter 1 Operations and Productivity 1
GLOBAL COMPANY PROFILE: HARD ROCK CAFE 2
What Is Operations Management? 4
Organizing to Produce Goods and Services 4
The Supply Chain 6
Why Study OM? 6
What Operations Managers Do 7
The Heritage of Operations Management 8
Operations for Goods and Services 11
Growth of Services 11
Service Pay 12
The Productivity Challenge 13
Productivity Measurement 14
Productivity Variables 15
Productivity and the Service Sector 17
Current Challenges in Operations Management 18
Ethics, Social Responsibility, and Sustainability 19
Summary 20
Key Terms 20
Ethical Dilemma 20
Discussion Questions 20
Using Software for Productivity Analysis 21
Solved Problems 21
Problems 22
CASE STUDIES 24
Uber Technologies, Inc. 24
Frito-Lay: Operations Management in Manufacturing
Video Case 25
Hard Rock Cafe: Operations Management in Services
Video Case 25
Endnotes 26
Rapid Review 27
Self Test 28
Chapter 2 Operations Strategy in a Global
Environment 29
GLOBAL COMPANY PROFILE: BOEING 30
A Global View of Operations and Supply
Chains 32
Cultural and Ethical Issues 35
Developing Missions and Strategies 35
Mission 36
Strategy 36
Achieving Competitive Advantage Through
Operations 36
Competing on Differentiation 37
Competing on Cost 38
Competing on Response 39
Issues in Operations Strategy 40
Strategy Development and Implementation 41
Key Success Factors and Core Competencies 41
Integrating OM with Other Activities 43
Building and Staffing the Organization 43
Implementing the 10 Strategic OM Decisions 44
Strategic Planning, Core Competencies, and
Outsourcing 44
The Theory of Comparative Advantage 46
Risks of Outsourcing 46
Rating Outsource Providers 47
Global Operations Strategy Options 49
Summary 50
Key Terms 50
Ethical Dilemma 51
Discussion Questions 51
Using Software to Solve Outsourcing
Problems 51
Solved Problems 52
Problems 53
CASE STUDIES 55
Rapid-Lube 55
Strategy at Regal Marine Video Case 55
Hard Rock Cafe’s Global Strategy Video Case 55
Outsourcing Offshore at Darden Video Case 56
Endnotes 56
Rapid Review 57
Self Test 58
Chapter 3 Project Management 59
GLOBAL COMPANY PROFILE: BECHTEL GROUP 60
The Importance of Project Management 62
PART ONE Introduction to Operations Management 1
xixii TABLE OF CONTENTS
Project Planning 62
The Project Manager 63
Work Breakdown Structure 64
Project Scheduling 65
Project Controlling 66
Project Management Techniques: PERT and CPM 67
The Framework of PERT and CPM 67
Network Diagrams and Approaches 68
Activity-on-Node Example 69
Activity-on-Arrow Example 71
Determining the Project Schedule 71
Forward Pass 72
Backward Pass 74
Calculating Slack Time and Identifying the Critical
Path(s) 75
Variability in Activity Times 77
Three Time Estimates in PERT 77
Probability of Project Completion 79
Cost-Time Trade-Offs and Project Crashing 82
A Critique of PERT and CPM 85
Using Microsoft Project to Manage Projects 86
Summary 88
Key Terms 88
Ethical Dilemma 89
Discussion Questions 89
Using Software to Solve Project Management
Problems 89
Solved Problems 90
Problems 93
CASE STUDIES 98
Southwestern University: (A) 98
Project Management at Arnold Palmer Hospital
Video Case 99
Managing Hard Rock’s Rockfest Video Case 100
Endnotes 102
Rapid Review 103
Self Test 104
Chapter 4 Forecasting 105
GLOBAL COMPANY PROFILE: WALT DISNEY PARKS &
RESORTS 106
What is Forecasting? 108
Forecasting Time Horizons 108
Types of Forecasts 109
The Strategic Importance of Forecasting 109
Supply-Chain Management 109
Human Resources 110
Capacity 110
Seven Steps in the Forecasting System 110
Forecasting Approaches 111
Overview of Qualitative Method 111
Overview of Quantitative Methods 112
Time-Series Forecasting 112
Decomposition of a Time Series 112
Naive Approach 113
Moving Averages 114
Exponential Smoothing 116
Measuring Forecast Error 117
Exponential Smoothing with Trend Adjustment 120
Trend Projections 124
Seasonal Variations in Data 126
Cyclical Variations in Data 131
Associative Forecasting Methods: Regression
and Correlation Analysis 131
Using Regression Analysis for Forecasting 131
Standard Error of the Estimate 133
Correlation Coefficients for Regression Lines 134
Multiple-Regression Analysis 136
Monitoring and Controlling Forecasts 138
Adaptive Smoothing 139
Focus Forecasting 139
Forecasting in the Service Sector 140
Summary 141
Key Terms 141
Ethical Dilemma 141
Discussion Questions 142
Using Software in Forecasting 142
Solved Problems 144
Problems 146
CASE STUDIES 153
Southwestern University: (B) 153
Forecasting Ticket Revenue for Orlando Magic
Basketball Games Video Case 154
Forecasting at Hard Rock Cafe Video Case 155
Endnotes 156
Rapid Review 157
Self Test 158
PART TWO Designing Operations 159
Chapter 5 Design of Goods and Services 159
GLOBAL COMPANY PROFILE: REGAL MARINE 160
Goods and Services Selection 162
Product Strategy Options Support Competitive
Advantage 163
Product Life Cycles 164
Life Cycle and Strategy 164TABLE OF CONTENTS xiii
Product-by-Value Analysis 165
Generating New Products 165
Product Development 166
Product Development System 166
Quality Function Deployment (QFD) 166
Organizing for Product Development 169
Manufacturability and Value Engineering 170
Issues for Product Design 171
Robust Design 171
Modular Design 171
Computer-Aided Design (CAD) and Computer-Aided
Manufacturing (CAM) 171
Virtual Reality Technology 172
Value Analysis 173
Sustainability and Life Cycle Assessment (LCA) 173
Product Development Continuum 173
Purchasing Technology by Acquiring a Firm 174
Joint Ventures 174
Alliances 175
Defining a Product 175
Make-or-Buy Decisions 176
Group Technology 177
Documents for Production 178
Product Life-Cycle Management (PLM) 178
Service Design 179
Process–Chain–Network (PCN) Analysis 179
Adding Service Efficiency 181
Documents for Services 181
Application of Decision Trees to Product
Design 182
Transition to Production 184
Summary 184
Key Terms 185
Ethical Dilemma 185
Discussion Questions 185
Solved Problem 186
Problems 186
CASE STUDIES 189
De Mar’s Product Strategy 189
Product Design at Regal Marine Video Case 189
Endnotes 190
Rapid Review 191
Self Test 192
Supplement 5 Sustainability in the Supply
Chain 193
Corporate Social Responsibility 194
Sustainability 195
Systems View 195
Commons 195
Triple Bottom Line 195
Design and Production for Sustainability 198
Product Design 198
Production Process 200
Logistics 200
End-of-Life Phase 203
Regulations and Industry Standards 203
International Environmental Policies and
Standards 204
Summary 205
Key Terms 205
Discussion Questions 205
Solved Problems 206
Problems 207
CASE STUDIES 208
Building Sustainability at the Orlando Magic’s
Amway Center Video Case 208
Green Manufacturing and Sustainability at Frito-Lay
Video Case 209
Endnotes 210
Rapid Review 211
Self Test 212
Chapter 6 Managing Quality 213
GLOBAL COMPANY PROFILE: ARNOLD PALMER
HOSPITAL 214
Quality and Strategy 216
Defining Quality 217
Implications of Quality 217
Malcolm Baldrige National Quality Award 218
ISO 9000 International Quality Standards 218
Cost of Quality (COQ) 218
Ethics and Quality Management 219
Total Quality Management 219
Continuous Improvement 220
Six Sigma 221
Employee Empowerment 222
Benchmarking 222
Just-in-Time (JIT) 224
Taguchi Concepts 224
Knowledge of TQM Tools 225
Tools of TQM 226
Check Sheets 226
Scatter Diagrams 227
Cause-and-Effect Diagrams 227
Pareto Charts 227
Flowcharts 228
Histograms 229
Statistical Process Control (SPC) 229
The Role of Inspection 230
When and Where to Inspect 230
Source Inspection 231xiv TABLE OF CONTENTS
Service Industry Inspection 232
Inspection of Attributes versus Variables 233
TQM in Services 233
Summary 235
Key Terms 235
Ethical Dilemma 235
Discussion Questions 236
Solved Problems 236
Problems 237
CASE STUDIES 239
Southwestern University: (C) 239
The Culture of Quality at Arnold Palmer Hospital
Video Case 240
Quality Counts at Alaska Airlines Video Case 240
Quality at the Ritz-Carlton Hotel Company
Video Case 242
Endnotes 242
Rapid Review 243
Self Test 244
Supplement 6 Statistical Process Control 245
Statistical Process Control (SPC) 246
Control Charts for Variables 248
The Central Limit Theorem 248
Setting Mean Chart Limits (x-Charts) 250
Setting Range Chart Limits (R-Charts) 253
Using Mean and Range Charts 254
Control Charts for Attributes 256
Managerial Issues and Control Charts 259
Process Capability 260
Process Capability Ratio (C
p) 260
Process Capability Index (Cpk) 261
Acceptance Sampling 262
Operating Characteristic Curve 263
Average Outgoing Quality 264
Summary 265
Key Terms 265
Discussion Questions 265
Using Software for SPC 266
Solved Problems 267
Problems 269
CASE STUDIES 274
Bayfield Mud Company 274
Frito-Lay’s Quality-Controlled Potato Chips
Video Case 275
Farm to Fork: Quality at Darden Restaurants
Video Case 276
Endnotes 276
Rapid Review 277
Self Test 278
Chapter 7 Process Strategy 279
GLOBAL COMPANY PROFILE: HARLEY-DAVIDSON 280
Four Process Strategies 282
Process Focus 282
Repetitive Focus 283
Product Focus 284
Mass Customization Focus 284
Process Comparison 286
Selection of Equipment 288
Process Analysis and Design 288
Flowchart 289
Time-Function Mapping 289
Process Charts 289
Value-Stream Mapping 290
Service Blueprinting 292
Special Considerations for Service Process
Design 293
Production Technology 294
Machine Technology 294
Automatic Identification Systems (AISs) and RFID 295
Process Control 295
Vision Systems 296
Robots 296
Automated Storage and Retrieval Systems
(ASRSs) 296
Automated Guided Vehicles (AGVs) 296
Flexible Manufacturing Systems (FMSs) 297
Computer-Integrated Manufacturing (CIM) 297
Technology in Services 298
Process Redesign 298
Summary 299
Key Terms 299
Ethical Dilemma 300
Discussion Questions 300
Solved Problem 300
Problems 301
CASE STUDIES 302
Rochester Manufacturing’s Process Decision 302
Process Strategy at Wheeled Coach Video Case 302
Alaska Airlines: 20-Minute Baggage Process—
Guaranteed! Video Case 303
Process Analysis at Arnold Palmer Hospital
Video Case 304
Endnotes 304
Rapid Review 305
Self Test 306
Supplement 7 Capacity and Constraint
Management 307
Capacity 308
Design and Effective Capacity 309TABLE OF CONTENTS xv
Capacity and Strategy 311
Capacity Considerations 311
Managing Demand 312
Service-Sector Demand and Capacity
Management 313
Bottleneck Analysis and the Theory
of Constraints 314
Theory of Constraints 317
Bottleneck Management 317
Break-Even Analysis 318
Single-Product Case 319
Multiproduct Case 320
Reducing Risk with Incremental Changes 322
Applying Expected Monetary Value (EMV)
to Capacity Decisions 323
Applying Investment Analysis to Strategy-Driven
Investments 324
Investment, Variable Cost, and Cash Flow 324
Net Present Value 324
Summary 326
Key Terms 327
Discussion Questions 327
Using Software for Break-Even Analysis 327
Solved Problems 328
Problems 330
CASE STUDY 333
Capacity Planning at Arnold Palmer Hospital
Video Case 333
Endnote 334
Rapid Review 335
Self Test 336
Chapter 8 Location Strategies 337
GLOBAL COMPANY PROFILE: FEDEX 338
The Strategic Importance of Location 340
Factors That Affect Location Decisions 341
Labor Productivity 342
Exchange Rates and Currency Risk 342
Costs 342
Political Risk, Values, and Culture 343
Proximity to Markets 343
Proximity to Suppliers 344
Proximity to Competitors (Clustering) 344
Methods of Evaluating Location Alternatives 344
The Factor-Rating Method 345
Locational Cost–Volume Analysis 346
Center-of-Gravity Method 348
Transportation Model 349
Service Location Strategy 350
Geographic Information Systems 351
Summary 353
Key Terms 353
Ethical Dilemma 354
Discussion Questions 354
Using Software to Solve Location Problems 354
Solved Problems 355
Problems 357
CASE STUDIES 362
Southern Recreational Vehicle Company 362
Locating the Next Red Lobster Restaurant
Video Case 362
Where to Place the Hard Rock Cafe Video Case 363
Endnote 364
Rapid Review 365
Self Test 366
Chapter 9 Layout Strategies 367
GLOBAL COMPANY PROFILE: McDONALD’S 368
The Strategic Importance of Layout Decisions 370
Types of Layout 370
Office Layout 371
Retail Layout 372
Servicescapes 375
Warehouse and Storage Layouts 375
Cross-Docking 376
Random Stocking 377
Customizing 377
Fixed-Position Layout 377
Process-Oriented Layout 378
Computer Software for Process-Oriented Layouts 382
Work Cells 383
Requirements of Work Cells 383
Staffing and Balancing Work Cells 384
The Focused Work Center and the Focused
Factory 386
Repetitive and Product-Oriented Layout 386
Assembly-Line Balancing 387
Summary 392
Key Terms 392
Ethical Dilemma 392
Discussion Questions 392
Using Software to Solve Layout Problems 393
Solved Problems 394
Problems 396
CASE STUDIES 402
State Automobile License Renewals 402
Laying Out Arnold Palmer Hospital’s New Facility
Video Case 402
Facility Layout at Wheeled Coach Video Case 404
Endnotes 404
Rapid Review 405
Self Test 406xvi TABLE OF CONTENTS
Chapter 10 Human Resources, Job Design, and Work
Measurement 407
GLOBAL COMPANY PROFILE: RUSTY WALLACE’S NASCAR
RACING TEAM 408
Human Resource Strategy for Competitive
Advantage 410
Constraints on Human Resource Strategy 410
Labor Planning 411
Employment-Stability Policies 411
Work Schedules 411
Job Classifications and Work Rules 412
Job Design 412
Labor Specialization 412
Job Expansion 413
Psychological Components of Job Design 413
Self-Directed Teams 414
Motivation and Incentive Systems 415
Ergonomics and the Work Environment 415
Methods Analysis 417
The Visual Workplace 420
Labor Standards 420
Historical Experience 421
Time Studies 421
Predetermined Time Standards 425
Work Sampling 427
Ethics 430
Summary 430
Key Terms 430
Ethical Dilemma 431
Discussion Questions 431
Solved Problems 432
Problems 434
CASE STUDIES 437
Jackson Manufacturing Company 437
The “People” Focus: Human Resources at Alaska
Airlines Video Case 437
Hard Rock’s Human Resource Strategy
Video Case 438
Endnotes 438
Rapid Review 439
Self Test 440
PART THREE Managing Operations 441
Chapter 11 Supply Chain Management 441
GLOBAL COMPANY PROFILE: DARDEN RESTAURANTS 442
The Supply Chain’s Strategic Importance 444
Sourcing Issues: Make-or-Buy and
Outsourcing 446
Make-or-Buy Decisions 447
Outsourcing 447
Six Sourcing Strategies 447
Many Suppliers 447
Few Suppliers 447
Vertical Integration 448
Joint Ventures 448
Keiretsu Networks 448
Virtual Companies 449
Supply Chain Risk 449
Risks and Mitigation Tactics 450
Security and JIT 451
Managing the Integrated Supply Chain 451
Issues in Managing the Integrated Supply Chain 451
Opportunities in Managing the Integrated Supply
Chain 452
Building the Supply Base 454
Supplier Evaluation 454
Supplier Development 454
Negotiations 455
Contracting 455
Centralized Purchasing 455
E-Procurement 456
Logistics Management 456
Shipping Systems 456
Warehousing 457
Third-Party Logistics (3PL) 458
Distribution Management 459
Ethics and Sustainable Supply Chain
Management 460
Supply Chain Management Ethics 460
Establishing Sustainability in Supply
Chains 460
Measuring Supply Chain Performance 461
Assets Committed to Inventory 461
Benchmarking the Supply Chain 463
The SCOR Model 463
Summary 464
Key Terms 465
Ethical Dilemma 465
Discussion Questions 465
Solved Problems 465
Problems 466
CASE STUDIES 467
Darden’s Global Supply Chains Video Case 467TABLE OF CONTENTS xvii
Supply Chain Management at Regal Marine
Video Case 467
Arnold Palmer Hospital’s Supply Chain
Video Case 468
Endnote 468
Rapid Review 469
Self Test 470
Supplement 11 Supply Chain Management
Analytics 471
Techniques for Evaluating Supply Chains 472
Evaluating Disaster Risk in the Supply Chain 472
Managing the Bullwhip Effect 474
A Bullwhip Effect Measure 475
Supplier Selection Analysis 476
Transportation Mode Analysis 477
Warehouse Storage 478
Summary 479
Discussion Questions 480
Solved Problems 480
Problems 482
Rapid Review 485
Self Test 486
Chapter 12 Inventory Management 487
GLOBAL COMPANY PROFILE: AMAZON.COM 488
The Importance of Inventory 490
Functions of Inventory 490
Types of Inventory 490
Managing Inventory 491
ABC Analysis 491
Record Accuracy 493
Cycle Counting 493
Control of Service Inventories 494
Inventory Models 495
Independent vs. Dependent Demand 495
Holding, Ordering, and Setup Costs 495
Inventory Models for Independent Demand 496
The Basic Economic Order Quantity (EOQ)
Model 496
Minimizing Costs 497
Reorder Points 501
Production Order Quantity Model 502
Quantity Discount Models 505
Probabilistic Models and Safety Stock 508
Other Probabilistic Models 511
Single-Period Model 513
Fixed-Period (P) Systems 514
Summary 515
Key Terms 515
Ethical Dilemma 515
Discussion Questions 515
Using Software to Solve Inventory Problems 516
Solved Problems 517
Problems 520
CASE STUDIES 524
Zhou Bicycle Company 524
Parker Hi-Fi Systems 525
Managing Inventory at Frito-Lay Video Case 525
Inventory Control at Wheeled Coach Video Case 526
Endnotes 526
Rapid Review 527
Self Test 528
Chapter 13 Aggregate Planning and S&OP 529
GLOBAL COMPANY PROFILE: FRITO-LAY 530
The Planning Process 532
Sales and Operations Planning 533
The Nature of Aggregate Planning 534
Aggregate Planning Strategies 535
Capacity Options 535
Demand Options 536
Mixing Options to Develop a Plan 537
Methods for Aggregate Planning 538
Graphical Methods 538
Mathematical Approaches 543
Aggregate Planning in Services 545
Restaurants 546
Hospitals 546
National Chains of Small Service Firms 546
Miscellaneous Services 546
Airline Industry 547
Revenue Management 547
Summary 550
Key Terms 550
Ethical Dilemma 551
Discussion Questions 551
Using Software for Aggregate Planning 552
Solved Problems 554
Problems 555
CASE STUDIES 559
Andrew-Carter, Inc. 559
Using Revenue Management to Set Orlando Magic
Ticket Prices Video Case 560
Endnote 560
Rapid Review 561
Self Test 562
Chapter 14 Material Requirements Planning (MRP)
and ERP 563
GLOBAL COMPANY PROFILE: WHEELED COACH 564
Dependent Demand 566xviii TABLE OF CONTENTS
Dependent Inventory Model Requirements 566
Master Production Schedule 567
Bills of Material 568
Accurate Inventory Records 570
Purchase Orders Outstanding 570
Lead Times for Components 570
MRP Structure 571
MRP Management 575
MRP Dynamics 575
MRP Limitations 575
Lot-Sizing Techniques 576
Extensions of MRP 580
Material Requirements Planning II (MRP II) 580
Closed-Loop MRP 581
Capacity Planning 581
MRP in Services 583
Distribution Resource Planning (DRP) 584
Enterprise Resource Planning (ERP) 584
ERP in the Service Sector 587
Summary 587
Key Terms 587
Ethical Dilemma 587
Discussion Questions 588
Using Software to Solve MRP Problems 588
Solved Problems 589
Problems 592
CASE STUDIES 595
When 18,500 Orlando Magic Fans Come to Dinner
Video Case 595
MRP at Wheeled Coach Video Case 596
Endnotes 596
Rapid Review 597
Self Test 598
Chapter 15 Short-Term Scheduling 599
GLOBAL COMPANY PROFILE: ALASKA AIRLINES 600
The Importance of Short-Term Scheduling 602
Scheduling Issues 602
Forward and Backward Scheduling 603
Finite and Infinite Loading 604
Scheduling Criteria 604
Scheduling Process-Focused Facilities 605
Loading Jobs 605
Input–Output Control 606
Gantt Charts 607
Assignment Method 608
Sequencing Jobs 611
Priority Rules for Sequencing Jobs 611
Critical Ratio 614
Sequencing N Jobs on Two Machines: Johnson’s
Rule 615
Limitations of Rule-Based Sequencing Systems 616
Finite Capacity Scheduling (FCS) 617
Scheduling Services 618
Scheduling Service Employees with Cyclical
Scheduling 620
Summary 621
Key Terms 621
Ethical Dilemma 621
Discussion Questions 622
Using Software for Short-Term Scheduling 622
Solved Problems 624
Problems 627
CASE STUDIES 630
Old Oregon Wood Store 630
From the Eagles to the Magic: Converting the Amway
Center Video Case 631
Scheduling at Hard Rock Cafe Video Case 632
Endnotes 632
Rapid Review 633
Self Test 634
Chapter 16 Lean Operations 635
GLOBAL COMPANY PROFILE: TOYOTA MOTOR
CORPORATION 636
Lean Operations 638
Eliminate Waste 638
Remove Variability 639
Improve Throughput 640
Lean and Just-in-Time 640
Supplier Partnerships 640
Lean Layout 642
Lean Inventory 643
Lean Scheduling 646
Lean Quality 649
Lean and the Toyota Production System 649
Continuous Improvement 649
Respect for People 649
Processes and Standard Work Practice 650
Lean Organizations 650
Building a Lean Organization 650
Lean Sustainability 652
Lean in Services 652
Summary 653
Key Terms 653
Ethical Dilemma 653
Discussion Questions 653
Solved Problem 653
Problems 654TABLE OF CONTENTS xix
CASE STUDIES 655
Lean Operations at Alaska Airlines Video Case 655
JIT at Arnold Palmer Hospital Video Case 656
Endnote 656
Rapid Review 657
Self Test 658
Chapter 17 Maintenance and Reliability 659
GLOBAL COMPANY PROFILE: ORLANDO UTILITIES
COMMISSION 660
The Strategic Importance of Maintenance
and Reliability 662
Reliability 663
System Reliability 663
Providing Redundancy 665
Maintenance 667
Implementing Preventive Maintenance 667
Increasing Repair Capabilities 670
Autonomous Maintenance 670
Total Productive Maintenance 671
Summary 671
Key Terms 671
Ethical Dilemma 671
Discussion Questions 671
Using Software to Solve Reliability Problems 672
Solved Problems 672
Problems 672
CASE STUDY 674
Maintenance Drives Profits at Frito-Lay
Video Case 674
Rapid Review 675
Self Test 676
PART FOUR Business Analytics Modules 677
Module A Decision-Making Tools 677
The Decision Process in Operations 678
Fundamentals of Decision Making 679
Decision Tables 680
Types of Decision-Making Environments 681
Decision Making Under Uncertainty 681
Decision Making Under Risk 682
Decision Making Under Certainty 683
Expected Value of Perfect Information (EVPI) 683
Decision Trees 684
A More Complex Decision Tree 686
The Poker Decision Process 688
Summary 689
Key Terms 689
Discussion Questions 689
Using Software for Decision Models 689
Solved Problems 691
Problems 692
CASE STUDY 696
Warehouse Tenting at the Port of Miami 696
Endnote 696
Rapid Review 697
Self Test 698
Module B Linear Programming 699
Why Use Linear Programming? 700
Requirements of a Linear Programming
Problem 701
Formulating Linear Programming Problems 701
Glickman Electronics Example 701
Graphical Solution to a Linear Programming
Problem 702
Graphical Representation of Constraints 702
Iso-Profit Line Solution Method 703
Corner-Point Solution Method 705
Sensitivity Analysis 705
Sensitivity Report 706
Changes in the Resources or Right-Hand-Side
Values 706
Changes in the Objective Function Coefficient 707
Solving Minimization Problems 708
Linear Programming Applications 710
Production-Mix Example 710
Diet Problem Example 711
Labor Scheduling Example 712
The Simplex Method of LP 713
Integer and Binary Variables 713
Creating Integer and Binary Variables 713
Linear Programming Applications with Binary
Variables 714
A Fixed-Charge Integer Programming Problem 715
Summary 716
Key Terms 716
Discussion Questions 716
Using Software to Solve LP Problems 716
Solved Problems 718
Problems 720
CASE STUDIES 725
Quain Lawn and Garden, Inc. 725
Scheduling Challenges at Alaska Airlines
Video Case 726
Endnotes 726
Rapid Review 727
Self Test 728xx TABLE OF CONTENTS
Module C Transportation Models 729
Transportation Modeling 730
Developing an Initial Solution 732
The Northwest-Corner Rule 732
The Intuitive Lowest-Cost Method 733
The Stepping-Stone Method 734
Special Issues in Modeling 737
Demand Not Equal to Supply 737
Degeneracy 737
Summary 738
Key Terms 738
Discussion Questions 738
Using Software to Solve Transportation
Problems 738
Solved Problems 740
Problems 741
CASE STUDY 743
Custom Vans, Inc. 743
Rapid Review 745
Self Test 746
Module D Waiting-Line Models 747
Queuing Theory 748
Characteristics of a Waiting-Line System 749
Arrival Characteristics 749
Waiting-Line Characteristics 750
Service Characteristics 751
Measuring a Queue’s Performance 752
Queuing Costs 753
The Variety of Queuing Models 754
Model A (M/M/1): Single-Server Queuing Model with
Poisson Arrivals and Exponential Service Times 754
Model B (M/M/S): Multiple-Server Queuing
Model 757
Model C (M/D/1): Constant-Service-Time Model 762
Little’s Law 763
Model D (M/M/1 with Finite Source): Finite-Population
Model 763
Other Queuing Approaches 765
Summary 765
Key Terms 765
Discussion Questions 765
Using Software to Solve Queuing Problems 766
Solved Problems 766
Problems 768
CASE STUDIES 771
New England Foundry 771
The Winter Park Hotel 772
Endnotes 772
Rapid Review 773
Self Test 774
Module E Learning Curves 775
What Is a Learning Curve? 776
Learning Curves in Services and
Manufacturing 777
Applying the Learning Curve 778
Doubling Approach 778
Formula Approach 779
Learning-Curve Table Approach 779
Strategic Implications of Learning Curves 782
Limitations of Learning Curves 783
Summary 783
Key Term 783
Discussion Questions 783
Using Software for Learning Curves 784
Solved Problems 784
Problems 785
CASE STUDY 787
SMT’s Negotiation with IBM 787
Endnote 788
Rapid Review 789
Self Test 790
Module F Simulation 791
What Is Simulation? 792
Advantages and Disadvantages of Simulation 793
Monte Carlo Simulation 794
Simulation with Two Decision Variables:
An Inventory Example 797
Summary 799
Key Terms 799
Discussion Questions 799
Using Software in Simulation 800
Solved Problems 801
Problems 802
CASE STUDY 805
Alabama Airlines’ Call Center 805
Endnote 806
Rapid Review 807
Self Test 808
Appendix A1
Bibliography B1
Name Index I1
General Index I7TABLE OF CONTENTS xxi
ONLINE TUTORIALS
- Statistical Tools for Managers T1-1
Discrete Probability Distributions T1-2
Expected Value of a Discrete Probability
Distribution T1-3
Variance of a Discrete Probability Distribution T1-3
Continuous Probability Distributions T1-4
The Normal Distribution T1-4
Summary T1-7
Key Terms T1-7
Discussion Questions T1-7
Problems T1-7
Bibliography T1-7 - Acceptance Sampling T2-1
Sampling Plans T2-2
Single Sampling T2-2
Double Sampling T2-2
Sequential Sampling T2-2
Operating Characteristic (OC) Curves T2-2
Producer’s and Consumer’s Risk T2-3
Average Outgoing Quality T2-5
Summary T2-6
Key Terms T2-6
Solved Problem T2-7
Discussion Questions T2-7
Problems T2-7 - The Simplex Method of Linear Programming T3-1
Converting the Constraints to Equations T3-2
Setting Up the First Simplex Tableau T3-2
Simplex Solution Procedures T3-4
Summary of Simplex Steps for Maximization
Problems T3-6
Artificial and Surplus Variables T3-7
Solving Minimization Problems T3-7
Summary T3-8
Key Terms T3-8
Solved Problem T3-8
Discussion Questions T3-8
Problems T3-9 - The MODI and VAM Methods of Solving
Transportation Problems T4-1
MODI Method T4-2
How to Use the MODI Method T4-2
Solving the Arizona Plumbing Problem with
MODI T4-2
Vogel’s Approximation Method: Another Way to Find
an Initial Solution T4-4
Discussion Questions T4-8
Problems T4-8 - Vehicle Routing and Scheduling T5-1
Introduction T5-2
Service Delivery Example: Meals-for-ME T5-2
Objectives of Routing and Scheduling
Problems T5-2
Characteristics of Routing and Scheduling
Problems T5-3
Classifying Routing and Scheduling Problems T5-3
Solving Routing and Scheduling Problems T5-4
Routing Service Vehicles T5-5
The Traveling Salesman Problem T5-5
Multiple Traveling Salesman Problem T5-8
The Vehicle Routing Problem T5-9
Cluster First, Route Second Approach T5-10
Scheduling Service Vehicles T5-11
The Concurrent Scheduler Approach T5-13
Other Routing and Scheduling Problems T5-13
Summary T5-14
Key Terms T5-15
Discussion Questions T5-15
Problems T5-15
Case Study: Routing and Scheduling of
Phlebotomists T5-17
Bibliography
General Index
A
ABC analysis, 491 – 492
Acceptable quality level (AQL), 263
Acceptance sampling, 262 – 265 , T2 – 1
to T2 – 7
average outgoing quality (AOQ),
264 – 265 , T2 – 5 to T2 – 6
erroneous conclusions and, 263 n
operating characteristic (OC) curve
and, 263 – 264
sampling plans, T2 – 2
Accurate inventory records, MRP
and, 570
Accurate pull data, 452
Activity charts, job design and, 418
Activity map, 43
Activity times, variability in, 77 – 82
Activity-on-arrow (AOA), 68 , 71
Activity-on-node (AON), 68 , 69 – 70 ,
90
Adaptive smoothing, forecasting and,
139
Additive manufacturing, 295
Advanced shipping notice (ASN), 454
Aggregate planning, 529 – 562
capacity options, 535 – 536
chase strategy and, 537
comparison of planning methods
for, 537
demand options and, 536 – 537
disaggregation and, 535
ethical dilemma, 551
graphical methods and, 538 – 543
level strategy and, 538
master production schedule and,
535
mathematical approaches and,
543 – 545
methods for, 538 – 543
mixing options to develop a plan
and, 537 – 538
nature of, 534 – 535
planning process and, 532 – 533
revenue management and, 547 – 550
sales and operating planning
(S&OP) and, 533 – 534
scheduling issues and, 603
services and, 545 – 547
software for, 552 – 553
S&OP defi nition, 533
strategies for, 535 – 538
transportation method of linear
programming and, 543 – 545
yield management and, 547 – 550
Aggregate scheduling. See Aggregate
planning
Agile project management, 67
Air Berlin, 257
Airbus, 31
Aircraft industry, 417
Airfreight, logistics management and,
457
Airline industry:
aggregate planning and, 547
capacity, matching to demand, 313
inventory, 652
organizational chart, 5
revenue management, 551
scheduling services in, 619
sustainability, 194
AirTran, 257
Alabama Airlines, 805 – 806
Alaska, long-range economic
forecasting, 111
Alaska Airlines:
baggage process strategy, 303 – 304
Global Company Profi le, 600 – 601
human resources, 437 – 438
inspection, 232
lean operations, 651 , 655 – 656
quality, 240 – 242
scheduling challenges, 726
short-term scheduling, 600 – 602
sustainability, 199
Alenia Aeronautica, 30–31
Algebraic approach, break-even
analysis and, 319 – 320
Align Technology, 285
Alliances, 175
time-based competition and, 175
Allowable ranges for objective
function coefficients, 708
Allstate Insurance, 163
All-units discount, 507
Amazon.com, 110
Global Company Profi le, 488 – 489
supply chain, 445
warehouse strategy, 376
Ambient conditions, 375
American Hardware Supply, 140
American National Can Company,
289 , 290
American Society for Quality (ASQ),
8 , 217
Amway Center, 208 – 209 , 631 – 632
Analysis and design, process strategy
and, 289
Andon, 637 , 642
Anheuser-Busch, 463
AOA (Activity-on-arrow), 68 , 71
AON (Activity-on-node), 68 , 69 – 70
APEC, 34
APICS (Association for Operations
Management), 8
APICS Supply Chain Council, 464
Apple, 41 , 45 , 109 – 110 , 162 , 195
Application of decision trees
evaluating disaster risk, 473–474
product design, 182–184
Appointment system, 314
Appraisal costs, quality and, 218
Approaches to forecasting, 111 – 112
Arby’s, use of GIS system, 353
ArcGIS, 353
Arcs, routing and scheduling vehicles
and, T5 – 3
Area under the normal curve, T1 – 4
to T1 – 5
Argentina, MERCOSUR and, 34
Arnold Palmer Hospital, 66
building construction, 66
capacity planning, 333 – 334
flowchart, 229
Global Company Profi le, 214 – 215
hospital layout, 402 – 404
inspection, 232
JIT, 656
labor standards and, 428
managing quality, 214 – 215
mission statement, 36
process analysis, 304
process focus, 283
project management, 99 – 100
supply chain, 468
Arrival characteristics, waiting line
systems and, 749 – 752
behavior of arrivals, 750
characteristics of, 749 – 750
pattern of arrivals and, 749 – 750
Poisson distribution, 737
Artifacts, servicescapes and, 375
Artifi cial variables, T3 – 8
ASRS, 296
Assembly chart, 178
Assembly drawing, 178
Assembly line
labor specialization, 412
product-oriented layout and, 386
regulations, 203 – 204
repetitive manufacturing, 280 – 281
scheduling, 605
sustainability, 203
Note: Page numbers beginning with a T refer to the Online Tutorial chapters that appear on our web site www.pearsonhighered.com/heizer.I8 GENERAL INDEX
Assembly-line balancing, productoriented layout and, 386
Assets committed to inventory,
461 – 463
Assignable variations, statistical
process control and, 247
Assignment method, loading and,
608 – 610
Association for Operations
Management (APICS), 8
Associative forecasting methods, 112 ,
131 – 137
correlation coefficient for
regression lines, 134 – 136
linear-regression analysis, 131–136
multiple regression analysis, 136 –
137
regression analysis, 131 – 137
standard deviation of the estimate,
133 – 134
standard error of the estimate,
133 – 134
Assumptions, break-even analysis
and, 318 – 319
Atlas GIS, 353
AT&T, 218
Attract and retain global talent,
global view of operations and,
34 – 35
Attribute(s):
c-charts and, 257 – 259
control charts for, 256 – 259
p-charts and, 256 – 257 , 259
versus variables, inspection and,
233
Auctions, online, 456
Auctions, supply chain management,
and, 455
Audi, 46
Australia, SEATO and, 34
Automated Storage and Retrieval
Systems (ASRS), 296 , 297
Automatic Guided Vehicles (AGV),
296
Automatic identification systems
(AIS), 295 , 377
Automation, service efficiency and, 181
Automobile manufacturing. See also
Ford Motor Co.
bullwhip effect in, 476
sustainability, 203 , 205
Autonomous maintenance, 670
Avendra, 456
Average observed time, 422
Average outgoing quality, 264 – 265 ,
T2 – 5 to T2 – 6
Avis car rental, 730
B
Babbage, Charles, 412
Back ordering, 536 – 537
Backup redundancy, 665 – 666
Backward integration, 448
Backward pass, 74
Backward scheduling, 604
BAE Systems, 30
Balancing work cells, 384 – 386
Balking customers, 750
Ballard Power Systems, 175
Baltimore, Port of, 119 – 120
Bank of America, 643
Banks
organizational chart, 5
scheduling for services and, 618
Basic feasible solution, T3 – 3
Basic variables, T3 – 3
Baxter International, 642
Bay Medical Center, simulation and,
792
Bayfield Mud Company, SPC and,
274 – 275
Bechtel Group, Global Company
Profile, 60 – 61
Beer, supply chain for, 444
Behavior of arrivals, 750
Bell Laboratories, 246
Benchmarking, 222 – 224
supply chain, 463
Benetton, 32 , 370 , 453 , 585
Best Buy, 375
Beta probability distribution, 77 – 78
Bias, forecasts and, 138
Big data, 679
Bills-of-material (BOM), 175 , 568 –
570
Binary variables, 713 – 715
Blanket orders, 453
Blue Cross, 46
BMW, 34 , 203
Boeing Aircraft, 173 , 388 – 389
Global Company Profile, 30 – 31
operations strategy, 40
product reliability, 668
supply chain risks and tactics, 450
sustainable product design, 199
Bose Corp., 216
Boston Medical Center, 415
Bottleneck analysis and theory of
constraints, 314 – 318
management of, 317 – 318
time and, 315
Bottom line, triple, 195 – 198
BP, 204
Brazil, MERCOSUR and, 34
Break-bulk warehouse function,
457
Breakdown maintenance, 667
Break-even analysis, 318 – 322
assumptions and, 318 – 319
definition, 318
fixed costs, 318
multiproduct case and, 320 – 322
revenue function, 318
single-product case and, 319 – 320
Bristol-Myers Squibb, 111
British Petroleum (BP), 204
Buckets, MRP and, 576
Buffer, in bottleneck management, 317
Building the supply base,
centralized purchasing, 455 – 456
Build-to-order (BTO), 285
Bullwhip effect, 452 , 474 – 476
Burger King, 386 , 794
Buybacks, 455
C
CAD, 171 – 172
Cadillac, 218
CAFTA, 34
Calculating slack time, 75 – 76
California drought, 197
Call center industry, location
strategies and, 47
CAM, 172
Canada, NAFTA and, 34
Canon, 384
“Cap and trade” principle, 204
Capacity. See also Break-even
analysis
aggregate planning, 535 – 536
analysis and, 314
applying expected monetary value
(EMV) to capacity decisions,
323
applying investment analysis to
strategy-driven investments,
324 – 326
bottleneck analysis and theory of
constraints, 314 – 318
break-even analysis, 318 – 322
capacity exceeds demand, 312
considerations and, 311
definition, 308
demand management and, 312 – 313
design and, 309 – 311
effective capacity, 309 – 311
forecasting and, 109, 110
managing demand, 312 – 313
net present value and, 324 – 326
reducing risks with incremental
changes, 322 – 323
service sector demand, 313 – 314
strategy and, 311
strategy-driven investments and,
324 – 326
theory of constraints, 317
using software, 327
Capacity analysis, 314
Capacity management, service sector
and, 314
Capacity planning, MRP and,
581 – 583
Capacity plans, scheduling issues
and, 602 – 603
Capital, as a productivity variable,
15 , 16GENERAL INDEX I9
Car rental companies, 730
Carbon footprint, 197
Cartoon industry in Manila, 33
Carvel Ice Cream, use of GIS system,
352
Case Studies:
Alabama Airlines’ Call Center,
805 – 806
Alaska Airlines:
human resources, 437 – 438
lean operations, 655 – 656
process strategy, 303–304
quality, 240 – 242
scheduling challenges, 726
Amway Center sustainability,
208 – 209
Andrew Carter, Inc. aggregate
planning, 559 – 560
Arnold Palmer Hospital
capacity planning, 333 – 334
hospital layout, 402 – 404
JIT, 656
process analysis, 304
project management, 99 – 100
quality, 240
supply chain, 468
Bayfield Mud Company, SPC and,
274 – 275
Custom Vans. Inc. transportation
problem, 743 – 744
Darden Restaurants
outsourcing offshore, 56
Red Lobster, location and
strategies, 362 – 363
statistical process control, 276
supply chain and, 467
De Mar’s Product Strategy, 189
Frito-Lay
inventory management,
525 – 526
maintenance, 674
operations management, 25
statistical process control, 275
sustainability, 209 – 210
Hard Rock Cafe
forecasting, 155–156
global strategy, 55 – 56
human resource strategy, 438
location strategy, 363 – 364
operations management in
services, 25–26
project management, 77,
100–102
scheduling, 632
Jackson Manufacturing Co., work
measurement, 437
New England Foundry, waitingline models, 771 – 772
Old Oregon Wood Store, shortterm scheduling and, 630
Orlando Magic
forecasting, 154 – 155
MRP and, 595 – 596
revenue management, 560
short-term scheduling, 631 – 632
sustainability, 208–209
Parker Hi-Fi Systems, inventory
management and, 525
Phlebotomists, routing and
scheduling, T5 – 17 to T5 – 18
Port of Miami warehouse tenting,
696
Quain Lawn and Garden, Inc., LP
problem, 725 – 726
Rapid-Lube, operations strategy
in a global environment and,
55
Regal Marine
global strategy, 55
product design, 189–190
supply chain management,
467 – 468
Ritz-Carlton Hotel company
quality, 242
Rochester Manufacturing Corp.,
302
SMT’s negotiation with IBM,
787 – 788
Southern Recreational Vehicle
Co., location strategies and,
362
Southwestern University:
forecasting, 153 – 154
project management, 98 – 99
quality, 239 – 240
State automobile license renewals,
402
Uber Technologies, Inc., 24
Wheeled Coach
inventory control, 526
layout strategy, 404
MRP and, 596
process strategy, 302 – 303
Winter Park Hotel, waiting line
models, 772
Zhou Bicycle Co., inventory
management and, 524 – 525
Cash flow, investment analysis and,
324
Cash for Clunkers program, 476
Caterpillar, 49 , 50 , 203 , 474
Cause-and-effect diagrams, 226 , 227
c-charts, 257 – 259
Center-of-gravity method, location
strategies and, 348 – 349 , 348 n
Central limit theorem, 248 – 249
Certainty, decision making under,
683
Certification, supplier, 454
Cessna Aircraft Company, 642
Changes in objective function
coefficient, 707 – 708
Changes in resources or right-handside values, LP and, 706 – 707
Channel assembly, supply chain
management and, 457 – 458
Characteristics of goods and services,
11
Characteristics of vehicle routing and
scheduling problems, T5 – 3 to
T5 – 5
Charleston, port of, 451
Charts. See Control charts
Chase strategy, aggregate scheduling
and, 537
Check sheets, TQM tools and,
226 – 227
Checklist, source inspection and,
231
Chengdu Aircraft, 30
Chile, SEATO and, 34
China
ethics within supply chain, 460
manufacturing in, 48 , 51
Chinese postman problem (CPP),
T5 – 4
CIM, 297 – 298
Cisco Systems, 372
Clark and Wright Savings heuristic,
T5 – 5 , T5 – 7 to T5 – 8
Classifying routing and scheduling
vehicle problems, T5 – 3 to
T5 – 4
Closed-loop material requirements
planning, 581
Closed-loop supply chain, 203 , 461
Cluster first, route second approach,
T5 – 10 to T5 – 11
Clustering, 344
Cobham, 30
Coca-Cola, 198 , 463
Coefficient approach, learning curve
and, 779 – 782
Coefficient of correlation, 134 – 136
Coefficient of determination, 136
Collaborative planning, forecasting,
and replenishment (CPFR),
110 , 453
Colruyt, Franz, 38
Commodities transport, 457
Common, resources in the, 195
Company reputation, quality and,
217
Comparative advantage, theory of
outsourcing, 46
Comparison of aggregate planning
methods, 537
Comparison of process choices,
286 – 288
Competing on cost
differentiation, operations and,
37 – 38
experience differentiation, 38
operations and, 38
product strategy options and, 164
response, operations, 39 – 40I10 GENERAL INDEX
Competitive advantage, operations
and, 36 – 39
Amazon.com, 488 – 489
Arnold Palmer Hospital and,
214 – 215
Bechtel and, 60 – 61
Boeing and, 30 – 31
cost and, 38
Darden Restaurants, 442 – 443
definition, 36 – 37
differentiation and, 37 – 38
Federal Express, 338 – 339
Frito-Lay, 530 – 531
human resources and, 410 – 411
lean operations and, 636 – 637
McDonalds, 368 – 369
Orlando Utilities Commission,
660 – 661
product strategy options and,
163 – 164
Regal Marine and, 160 – 161
Walt Disney World and, 106 – 107
Wheeled Coach, 564 – 565
Competitive bidding, 455
Competitors, location proximity to,
344
Components, lead time for, 570 – 571
Computer numerical control (CNC),
295
Computer software. See also
Excel, creating your own
spreadsheets; Excel OM; POM
for Windows
for process oriented layouts, 382 – 383
for simulations, 800
Computer-aided design (CAD), 161 ,
171 , 297
Computer-aided manufacturing
(CAM), 172 , 297
Computer-integrated manufacturing
(CIM), 297 – 298
Concurrent engineering, 170
Concurrent scheduler approach,
T5 – 13
Configuration management, 178
Consignment inventory, JIT and, 642
Constant work-in-process (ConWIP),
606 – 607
Constant-service-time model, 762
Constraints:
graphical representation of, LP
problem and, 702 – 703
human resource strategy and, 410
linear programming and, 701
Consumer market survey, forecasting
and, 111 – 112
Consumer Product Safety
Commission, 203
Consumer’s risk, 263 , T2 – 3 to T2 – 4
Containers. See Kanban
Continuous improvement
TPS and, 649
TQM and, 220 – 221
Continuous probability distributions,
statistical tools and, T1 – 5 to
T1 – 8
Contracting, with suppliers, 455
Contribution, break-even analysis
and, 318
Contribution, defined, 165 n
Control charts, 230 , 241
attributes, 256 – 258
building process, 247 – 248
c-charts, 257 – 259
defined, 246
managerial issues and, 259 – 260
patterns on, 259
p-charts, 256 – 257 , 259
R-charts, 248 , 253 – 254
steps to follow in using, 254 – 255
variables, 248 , 259
x-bar chart, 248 , 250 – 253 , 259
Control of service inventory, 494 –
495
Controlling, project management
and, 66 – 67
Controlling forecasts, 138 – 140
ConWIP cards, 606 – 607
Coors, 112
Core competencies, 42 – 43
Core job characteristics, 413 – 414
Corner-point solution method, 705
Corporate social responsibility
(CSR), 194
Correlation analysis, associative
forecasting methods and,
131 – 137
Correlation coefficients for regression
lines, 134 – 136
Cost of goods sold, 462
Cost of quality (COQ), 218 – 219
Cost-based price model, 455
Costco, 495 , 758
Cost(s)
breakdown, 668 – 669
competing on, 38
globalization, 33
intangible, 342
intuitive lowest-cost transportation
model, 733 – 734
location and, 340 – 341
queuing, 753 – 754
reduction through value
engineering, 170
tangible, 342
Cost-time trade-offs, project
management and, 82 – 85
Council of Supply Chain
Management Professionals, 8
Cp ratio, 260 – 261
CPFR (collaborative planning,
forecasting, and
replenishment), 110
Cpk index, 261 – 262
CPM. See Critical path method
(CPM)
Crashing, project management and,
82 – 85
Criteria, scheduling and, 604 – 605
Critical path, 67 , 91 – 92
Critical path analysis, 71 – 72
Critical path method (CPM)
activity-on-arrow example, 68 , 71
activity-on-node example, 69 – 70
calculating slack time, 75 – 76
critique of, 85 – 86
determining the project schedule,
71 – 76
framework of, 67 – 68
Gantt charts versus, 65
identifying the critical path, 72
network diagrams and approaches,
68
variability in activity time, 77 – 82
Critical ratio (CR), sequencing and,
614 – 615
Critique of PERT and CPM, 85 – 86
Crosby, Philip B., 219
Cross-docking, 376
Crossover charts, 286 – 287
Cross-sourcing, 450
CSR (corporate social responsibility),
194
Cultural issues, global view of
operations and, 35
Culture, location strategy and, 343
Cumulative probability distribution,
Monte Carlo Simulation and,
794
Currency risks, location strategies
and, 342
Curtis-Wright Corp., 776
Custom Vans. Inc., 743 – 744
Customer interaction, process design
and, 293 – 294
Customer relationship management
(CRM) software, 584
Customer service, dissatisfaction
from outsourcing, 46
Customers, understanding
focus, 288
new products and, 166 , 167
sustainability, 195 – 196
Customizing. See also Mass
customization
service efficiency, increasing, 181
warehousing layout and, 377
Cycle counting, inventory
management and, 493 – 494
Cycle time, focused work center
and focused factory and, 389 ,
389 n
Cycles, forecasting and, 113 , 131
Cyclical scheduling, 620 – 621
Cyclical variations in data,
forecasting and, 131GENERAL INDEX I11
D
Daimler-BMW, joint venture and, 448
Darden Restaurants. See also Olive
Garden Restaurant, Red
Lobster Restaurant
Global Company Profile, 442 – 443
outsourcing offshore, 56
statistical process control, 253 , 276
supply chain management, 442 –
443 , 460 , 467
supply chain risks and tactics, 450
use of GIS system, 352
Dassault, 30
Data, big, 679
De Mar, 189
Deadhead time, T5 – 12
Decibel (dB) levels, 418
Decision making:
under certainty, 681 – 682 , 683
expected value of perfect
information (EVPI), 683 – 684
expected value with perfect
information (EVwPI), 683 – 684
under risk, 682 – 683
Decision making tools, 677 – 698 . See
also decision trees
under certainty, 681 – 682 , 683
decision tables, 680
decision trees, 684 – 688
expected value of perfect
information (EVPI), 683 – 684
expected value with perfect
information (EVwPI), 683 – 684
fundamentals of, 679 – 680
process in operations and, 678 – 679
under risk, 682 – 683
Decision tables, 680
Decision trees, 684 – 688
definition, 684
evaluating disaster risk, 473–474
more complex, 686 – 688
poker decision process, 688
product design and, 182 – 184
using software, 689 – 690
Decision variables, linear
programming and, 702
Decline phase, product life cycle and,
165
Decomposition of a time series,
112 – 113
Defects, control charts for, 258
Defining a product, 175 – 177
Degeneracy, transportation modeling
and, 737 – 738
Delay
allowances, 422
waste, 289 n
Delay customization, adding service
efficiency and, 181
Dell computers
inventory management, 463
mass customization and, 284 – 285
quality, 216
Deloitte & Touche, 372
Delphi method, forecasting and, 111
Delta Airlines, 66, 257
Gantt chart of service activities, 65
Demand exceeds capacity, 312
Demand forecasts, 109
exponential smoothing, 116 – 117
moving averages, 114 – 116
regression, 131–137
steady (naive approach), 113 – 114
Demand is variable and lead time is
constant, probability models
and, 511
Demand management in service
sector, 313 – 314
Demand not equal to supply,
transportation models and, 737
Demand options, aggregate strategies
and, 536 – 537
Deming, W. Edwards, 218 , 219 , 246 n
Deming Prize, 218
Deming’s 14 points, quality and, 220
Denim production, 197
Department of Agriculture
product definition, 175 – 176
Dependent demand, 495 , 566
Dependent inventory model
requirements, 566 – 571
accurate inventory records and, 570
bills-of-material and, 568 – 570
lead times for components and,
570
low level coding, 570
master production schedule and,
567 – 568
modular bills, 569 – 570
planning bill, 570
purchase orders outstanding and,
570
Dependent selections, 714
Depot node, routing and scheduling
vehicles and, T5 – 3
Design and production for
sustainability, 19 , 173 , 198 – 200
Design capacity, 309
Design for manufacture and assembly
(DFMA), 171
Design of goods and services,
159 – 192 . See also Product
Development
adding service efficiency and, 181
alliances and, 175
application of decision trees to
product design, 182 – 184
bill of material (BOM) and, 175
computer-aided design (CAD) and,
171 – 172
computer-aided manufacturing
(CAM) and, 172
defining the product, 175 – 177
documents for production, 178 – 179
documents for services, 181 – 182
generating new products, 165 – 166
goods and services selection,
162 – 165
group technology and, 177
issues for product design, 171 – 173
joint ventures and, 174 – 175
life cycle and strategy and, 164 –
165
life cycle assessment (LCA), 173
make-or-buy decisions and, 176 –
177
modular design and, 171
OM decisions and, 8
process-chain-network (PCN)
analysis, 179 – 181
product development, 166 – 170
product development continuum,
173 – 175
product life cycles and, 164
product life-cycle management
(PLC) and, 178 – 179
product strategy options support
competitive advantage and,
163 – 164
product-by-value analysis, 165
purchasing technology by
acquiring a firm and, 174
robust design and, 171
service design, 179 – 182
sustainability, 19 , 173 , 198 – 200
time-based competition, 173 – 175
transition to production, 184
value analysis and, 173
virtual reality technology and,
172 – 173
Determinants of service quality, 234
Determining project schedule
backward pass, 74 – 75
calculating slack time, 75 – 76
forward pass, 72 – 74
identifying critical paths, 75 – 76
Developing missions and strategies,
35 – 36
DFMA, 171
DHL, supply chain and, 457 , 458
Diehl, 30
Diet problem, LP and, 711
Differences between goods and
services, 11
Differentiation, competitive
advantage and, 37 – 38 , 163 –
164
Direct interaction, process chain and,
180
Disaggregation, aggregate planning
and, 535
Disaster risk in supply chain,
evaluating, 472 – 474
Discrete probability distributions,
strategic tools and, T1 – 2 to
T1 – 3I12 GENERAL INDEX
Diseconomies of scale, 311
Disney Parks and Resorts. See Walt
Disney Parks and Resorts
Disney World. See Walt Disney Parks
and Resorts
Disneyland, 375
Dispatching jobs, priority rules and,
611 – 612
Distance reduction, JIT layout and,
643
Distribution management, supply
chain management and, 459
Distribution resource planning
(DRP), 584
Distribution systems, supply-chain
management, 459
Distributions, control chart, 247
DMAIC, TQM and, 221
Documents:
for production, 178 – 179
for services, 181 – 182
Domestic Port Radiation Initiative
supply chain risks and tactics, 450
Dominican Republic, CAFTA and,
34
Double smoothing, 124
Doubling approach, learning curve,
778 – 779
Dow Chemical, 194
Drop shipping, 454
Drum, in bottleneck management,
317
Dual value, 707
Dubuque, Iowa, call center, 47
Dummy destinations, 737
Dummy sources, 737
DuPont, 46 , 163 , 222
Dutch auctions, 456
Dynamics, MRP and, 575
E
Earliest due date (EDD), 611 , 614
Earliest finish time (EF), critical path
analysis and, 72 , 73
Earliest start time (ES), critical path
analysis and, 72 , 73
Earthquake damage, 472
Eco Index, 204
Economic change, generating new
products, 166
Economic forecasts, 109
Economic order quantity (EOQ)
models, 496 – 497
lot sizing and, 577 – 578
minimize costs, 497
production order quantity model,
502 – 504
quantity discount model, 505 – 507
reorder points, 501 – 502
robust model, 500 – 501
Economic sustainability, 197
Economies of scale, 311
Effective capacity, 309
Efficiency
capacity and, 310
of line balance, 391
Electronic data interchange (EDI),
454
Electronic ordering and funds
transfer, 453 – 454
Eliminate waste, lean operations and,
638 – 639
Elliot Health System, 415
Emergency room
process layout, 379
queuing, 753
Emirates, 257
Employee empowerment
job expansion and, 413
OM and, 18
TPS and, 649
TQM and, 222
Employees
lean operations and JIT, 643
recruiting globally, 34 – 35
Employment stability policies, 411
EMV. See Expected monetary value
End-of-life phase, 203
Energy Star rating, 204
Engineering change notice (ECN),
178
Engineering drawing, 175
Enterprise Resource Planning (ERP),
566 , 584 – 587 . See also Material
requirements planning
Environment
supply chain ethics and, 460
sustainability and, 196 – 197
Environmental Protection Agency
(EPA), 204
Environmentally sensitive production,
OM and, 18
EOQ (economic order quantity
models), 496 – 497
E-procurement, 456
Equally likely, decision-making under
uncertainty, 681
Equipment, selecting for process
strategy, 288
Ergonomics, work environment and,
415 – 417
feedback to operators, 417
operators input to machines,
416 – 417
Erie Canal, 457
Errors, type 1 and type 2 , 263
Ethical dilemmas:
aggregate planning, 551
airline revenue management, 551
car battery recycling, 20
design of goods and services, 185
human resources, job design, work
measurement and, 431
inventory management, 515
layout strategy, 392
lean operations, 653
location strategies, 354
maintenance and reliability, 671
managing quality, 235
material requirements planning
(MRP) and ERP, 587
operation and productivity, 20
operation strategy in a global
environment, 51
process strategy, 300
project management, 64 , 89
short-term scheduling, 621 – 622
supply-chain management, 465
test scores and forecasting, 141
Ethical issues
global view of operations and, 35
Ethics:
human resources, job design and
work measurement, 430
project management and, 64
quality management and, 219
response identification, 19
social responsibility and, 19
supply chain and, 460 , 465
sustainability and, 19
EU Emissions Trading System
(EUETS), 204
European Union (EU), 34 , 34 n
environmental regulations, 204
standard for the exchange of
product data (STEP), 172
Evaluating disaster risk in supply
chain, 472 – 474
Even-numbered problems, solutions
to, A7 – A20
EVPI (expected value of perfect
information), 683 – 684
EVwPI (expected value with perfect
information), 683 – 684
Excel OM:
accessing, 21
aggregate planning and, 553
break-even analysis and, 327
decision models and, 689 , 690
develop x-bar charts, p-charts,
c-charts, OC curves,
acceptance sampling and
process capability, 266
forecasting and, 143
inventory management and, 517
layout problems and, 393
learning curves and, 784
linear programming, 718
location problems and, 354
MRP and ERP and, 588 – 589
outsourcing problems, 51
project scheduling and, 89 , 90
queuing problems, 766
reliability and, 672
short-term scheduling and, 622 –
624GENERAL INDEX I13
simulation and, 801
transportation problems, 738 – 739 ,
738 – 7397
using and, A5
Excel Solver, 552–553, 706 , 713 –
714
Excel spreadsheets, creating your
own
aggregate planning, 552 – 553
break-even analysis, 327
control limits for c-chart, 266
creating your own spreadsheets,
21
decision models, 689 , 690
factor rating analysis, 52
forecasting, 142 – 143
inventory management, 516
linear programs, 716 – 717
location strategies, 354
outsourcing problems, 51
simulation, 800 – 801
transportation problems, 738
Exchange rates
reducing risk through
globalization, 33 – 34 , 342
Expected monetary value (EMV),
682 – 683
capacity decisions, 323
decision tree analysis, 684 – 686
Expected value:
of discrete probability distribution,
statistical tools and, T1 – 3
of perfect information (EVPI),
683 – 684
with perfect information, (EVwPI),
683 – 684
Experience differentiation, 38
Disney and, 38
Exponential smoothing
forecasting and, 116 – 117
smoothing constant, 116 – 117
trend adjustment and, 120 – 124
Extensions of MRP, 580 – 583
capacity planning, 581 – 583
closed loop, 581
material requirements planning II,
580 – 581
External failure costs, quality and,
218
F
Fabrication line, production-oriented
layout and, 386
Factor weighting technique, 477
Factor-rating method
location strategies and, 345 – 346
outsource providers, 47
Factors affecting location decisions
and, 341 – 344
costs, 342
currency risk, 342
exchange rates, 342
labor productivity, 342
political risks, 343
proximity to markets, 343
proximity to suppliers, 344
Faro Technologies, 264
Fast Track, 66
Fast-food restaurants
forecasting and, 140 – 141
repetitive process using modules,
283
Fatigue allowances, 422
Feasible region, 703
Feasible tour, T5 – 3
FedEx, 141 , 218
Global Company Profile, 338 – 339
customized warehouses, 377
logistics, 458
Feedback to operators, 417
Feed-mix problem, LP and, 711
Feigenbaum, Armand V., 219
Ferrari racing team, 224
FIFS (first in, first served), 751 n
Finance/accounting, OM and, 4
Finished-goods inventory, 491
Finite capacity scheduling (FCS),
597 , 617 – 618
Finite loading, 604
Finite-population waiting model,
749 , 763 – 765
First Simplex tableau, T3 – 2 to T3 – 4
First-come, first-served (FCFS)
system, 314 , 611 , 614
First-in, first-out (FIFO), 751 , 751 n
First-in, first-served (FIFS), 751 n
First-order smoothing, 124
Fish-bone chart, 227
Five forces analysis, 40
5 Ss, lean operations and, 639 ,
639 n
Fixed costs, break-even analysis and,
318
Fixed fees, 507
Fixed-charge integer programming
problem, 715
Fixed-period (P) inventory systems,
514 – 515
Fixed-position layout, 370 , 377 – 378
Fixed-quantity (Q) inventory system,
514
Flexibility, process strategy and,
288
Flexibility increased, JIT layout and,
643
Flexible manufacturing system
(FMS), 297
Flexible response, 39
Flexible workweek, 412
Flextronics, 45
Flow diagrams, 418 , 419
Flow time, 611
Flowcharts, 226 , 228 – 229 , 289
Flowers Bakery, 246
Focus forecasting, 139 – 140
Focused factory, 386
Focused processes, 287 – 288
Focused work center, 386
Food and Drug Administration, 203
Foot Locker, 586
Ford Motor Co., 175 , 198 , 447 , 646
Forecast error, measuring, 117 – 120
Forecasting, 105 – 166 . See also
Associative forecasting
methods; Time series forecasting
adaptive smoothing and, 139
approaches to, 111 – 112
associative methods, regression
& correlation analysis and,
131 – 137
bias and, 138
capacity and, 110
coefficient of determination and,
136
correlation coefficients for
regression lines and, 134 – 136
defined, 108
Delphi method and, 111
demand forecast and, 109
economic forecasts and, 109
fast food restaurants and, 140
focus forecasting and, 139 – 140
human resources and, 110
jury of executive opinion and,
111
linear regression analysis and,
131–136
market survey and, 111 – 112
monitoring and controlling
forecasts and, 138 – 140
multiple regression analysis and,
136 – 137
qualitative methods and,
111 – 112
quantitative method and, 112
regression analysis and, 131 – 137
service sector and, 140 – 141
seven steps in, 110 – 111
software in, 142 – 144
specialty retail shops and, 140
standard error of the estimate and,
133 – 134
strategic importance of, 109 – 110
supply chain management and,
109 – 110
technological forcasts and, 109
time horizons and, 108 – 109
types of, 109
using software and, 142 – 144
Formula approach, learning curves
and, 779
Formulating problems, LP and,
701 – 702
Forward integration, 448
Forward pass, 72 – 74
Forward scheduling, 603I14 GENERAL INDEX
Four process strategies, 282 – 288
mass customization focus, 284 –
285
process focus, 282 – 283
product focus, 284
repetitive focus, 283
Framework of PERT and CPM,
67 – 68
Franz Colruyt, low-cost strategy and,
38
Free slack, 75
Freezing schedule, 647
Frito-Lay
aggregate planning and, 530 – 531
Global Company Profile, 530–531
maintenance, 662 , 674
managing inventory, 525 – 526
operations management, 25
product focus, 284
statistical process control, 275
sustainability, 197 – 198 , 200 , 209 –
210
x-bar charts, 255
Fuji Heavy Industries, 30
Functional area, mission and, 36
Functionality, servicescapes and, 375
Functions of inventory, 490
Future time horizon, forecasting and,
108 – 109
G
Gantt charts, 607 – 608
load chart, 607
Microsoft Project view, 86 – 87
project scheduling and, 65
schedule chart, 607 – 608
Gap, 421 , 460
Gemba or Gemba walk, 651 , 655
General Electric, 30 , 195 , 219 , 221 ,
246
General Motors (GM), 164
Generating new products, 165 – 166
Geographic information systems
(GISs), location strategies and,
351 – 353
GeoMedia, 353
Giant Manufacturing Company, 447
Gillette, 162
Glidden Paints, 134
Global Aquaculture Alliance, 460
Global Company Profiles:
Alaska Airlines, 600 – 601
Amazon.com, 488 – 489
Arnold Palmer Hospital, 214 – 215
Bechtel Group, 60 – 61
Boeing Aircraft, 30 – 31
Darden Restaurants, 442 – 443
FedEx, 338 – 339
Frito-Lay, 530 – 531
Hard Rock Cafe, 2 – 3
Harley-Davidson, 280 – 281
McDonald’s, 368 – 369
NASCAR Racing Team, 408 – 409
Orlando Utilities Commission,
660 – 661
Regal Marine, 160 – 161
Toyota Motor Corp., 636 – 637
Walt Disney Parks and Resorts,
106 – 107
Wheeled Coach, 564 – 565
Global implications
impact of culture and ethics and,
35
quality and, 218
Global Insights, 110
Global operations. See Operations
strategy in a global
environment
Global operations strategy options,
49 – 50
Global strategy, 49
Global view of operations, supply
chains and, 32 – 35
attract and retain global talent and,
34 – 35
improve products and, 34
improve supply chain and, 33
reduce costs, 33
The Goal: A Process of Ongoing
Improvement (Goldratt and
Cox), 317 n
“Going green.” See Sustainability
GOL-Brazil, 257
Goods, differences from services, 11
Goods and services selection
design of, 162 – 165
importance of, 162
life cycle and strategy, 164 – 165
operations and, 11 – 13
product decision, 163
product life cycles, 164
product strategy options, 163 – 164
product-by-value analysis, 165
Graphic approach, break-even
analysis and, 319 – 320
Graphical methods for aggregate
scheduling, 538 – 543
Graphical representation of
constraints, LP and, 702 – 705
Graphical solution to LP problem,
702 – 705
Graphical techniques, 538 – 543
Great Ormond Street Hospital, 223 ,
224
Greenhouse gas (GHG) emissions,
204
Greenlist classification, 196
Gross material requirements plan,
MRP and, 571 – 572
Group technology, 177
Growth of services, OM and,
11 – 12
Growth phase, product life cycle and,
165
H
Hafei Aviation, 30
Haier, globalization and, 32
Hallmark, 385 – 386
Hansel, 651
Hard Rock Cafe
Global Company Profile, 2 – 3
experience differentiation, 38
forecasting, 155 – 156
global strategy, 55 – 56
human resource strategy, 415 , 438
layout strategy, 375
location strategy, 363 – 364
operations management in services,
25 – 26
Pareto charts and, 228
portion-control standard, 176 ,
177
project management, 77 , 100 – 102
scheduling, 632
supply chain, 450
Hard Rock Hotel, 232
Harley-Davidson, 289
Global Company Profile, 280 – 281
Hawthorne studies, 413
Heart surgery learning curve, 776 ,
778
Heijunka, 647 , 651
Heinz, 49
Heritage of OM, 8 – 10
Hershey, 172
Hertz Car Rental, 730
Heuristic, assembly-line balancing
and, 389
Hewlett-Packard, 39 , 46 , 173
supply chain management, 453
Histogram, 226
Historical experience, labor standards
and, 421
Holding costs, 495
Home Depot
inventory management, 461 , 463
use of GIS system, 353
Honda, 42 , 172
supply chain risks and tactics,
450
Hong Kong, SEATO and, 34
Hospitals. See also Arnold Palmer
Hospital
accident avoidance, 232
benchmarking handoffs, 224
differentiation, 163 – 164
emergency room process layout,
379
forecasting, 129 – 130
inventory management, 652
lean operations, 651
learning curve, 776 , 778
MRP and, 584
operating room traffic jams, 415
process strategy, 284
quality management, 223 , 224GENERAL INDEX I15
scheduling services and, 618
zero-wait ER guarantee, 766
Hotels
MRP and, 584
site selection, location strategies
and, 351
technology changes, 298
House of quality, 166 – 169
HP Project, 66
Human resource, job design, work
management and, 407 – 440 . See
also labor standards
competitive advantage for, 410
constraints on, 410
employment-stability policies and,
411
ergonomics and the work
environment, 415 – 417
ethics, the work measurement and,
430 – 431
forecasting, 110
job classifications, work rules and,
412
job design and, 412 – 415
labor planning and, 411 – 412
labor standards, 420 – 430
methods analysis, 417 – 419
motivation, incentive systems and,
415
objective of, 410
psychological components of job
design , 413 – 414
self-directed teams and, 414
visual work place, 420
work schedules and, 411 – 412
Human resources, forecasting and,
109
Humidity, in work area, 417
Hyatt, 456
Hyundai Shipyard, 79
I
IBM, 46 , 49
closed-loop supply chain, 461
reshoring, 47
SMT’s negotiation with, 787 – 788
Idea Works, 257
Ikea, 377
Illumination, 417 – 418
Impact on employees, JIT layout and,
643
Implementing 10 strategic OM
decisions, 44
Importance of
inventory, 490 – 491
project management, 62
Improve operations, global view of
operations and, 34
Improve products, global view of
operations and, 34
Improve supply chain, global view of
operations and, 33
Incentives:
for individual or group
productivity, 415
job design and, 415
managing the supply chain, 452
Increased flexibility, JIT layout and, 643
Independent demand, inventory
models and, 495
basic economic order quantity
(EOQ) model, 496 – 497
minimizing costs, 497 – 501
production order quantity model,
502 – 504
quantity discount models, 505 – 507
reorder points, 501 – 502
Independent processing region, 180
India, call centers in, 47
Indonesia, manufacturing in, 51
Industrial engineering, OM and, 10
Infant mortality, 667
Infinite arrival population, 749
Infinite loading, 604
Information technology, 10
Ingall Ship Building Corporation,
378
Initial failure rate, 667
Initial solution, transportation
models and, 732 – 734
Innovation, new products and, 163
Input-output control, loading jobs
and, 606 – 607
Inspection:
attributes versus variables, 233
definition, 230
quality role, 230 – 233
service industry and, 232
source and, 231
waste, 289 n
when and where, 230 – 231
Institute for Supply Management
(ISM), 8
Intangible costs, location strategies
and, 342
Integer variables, 713
Integrated supply chain, managing
and, 451 – 454
issues in, 451 – 452
opportunities in, 452 – 454
Intermittent processes, 282
Internal benchmarking, 223
Internal failure costs, quality and, 218
International business, 49
International Organization for
Standardization (ISO), 204 –
205
International standards
environmental, 204 – 205
quality, 218 , 454
International strategy, global
operations and, 49
Introductory phase, product life cycle
and, 165
Intuitive lowest-cost method, 733 –
734
Inventory
accurate records, 570
assets committed to, 462 – 463
capacity options, 535 – 536
functions of, 490
lean operations, 643 – 646 , 652
maintenance/repair/operating
(MRO) inventory, 490 – 491
quantities and values, 462 n
raw material inventory and, 490
types of, 490 – 491
work-in-process (WIP) and, 490
Inventory analysis, simulation and,
797 – 799
Inventory management, 487 – 528 . See
also Independent demand
classifying items through ABC
analysis, 491 – 492
control of service inventories,
494 – 495
cycle counting, 493 – 494
demand, independent vs.
dependent, 495
ethical dilemma, 515
fixed-period (P) systems and,
514 – 515
holding, ordering, and setup costs,
495 – 496
importance of, 490 – 491
independent demand, models for,
496 – 507
just-in-time, 643 – 646
kanban, 647 – 649
managing and, 491 – 495
mass customization, 285
models, 495 – 514
other probabilistic models, 511 – 513
probabilistic models and safety
stock, 508 – 513
record accuracy, 493
single-period model, 513 – 514
using software, 516 – 517
Inventory turnover, 462
Inventory types, 490 – 491
Investment analysis, capacity
planning and, 324 – 326
Invisalign Corp., 172
iPad menu, 289
Ishikawa diagrams, 227
ISO, 703 n
ISO 9000 , 218 , 454
ISO 14000 , 204 – 205 , 454
ISO-cost line, 708 – 709
ISO-profit line solutions method,
703 – 705
Issues in:
integrated supply chain, 451 – 452
operations strategy, 40 – 41
short-term scheduling, 602 – 605
Item aggregation, 507I16 GENERAL INDEX
J
J R Simplot, 179
Jackson Manufacturing Co., 437
Jagoda Wholesalers, 130 – 131
Japan/Japanese. See also Toyota
Production System
collegial management structure, 170
Deming Prize, 218
earthquake damage, 472
5Ss, 639
Gemba or Gemba walk, 651
kanban, 647 – 649
keiretsu networks, 448 – 449
SEATO and, 34
Takumi, 219
JC Penney, 453
Jidoka, 650 , 651
JIT. See Just-in-time
Jo-Ann Stores, use of GIS system,
353
Job characteristics, 413 – 414
Job classifications, 412
Job design, 412 – 415 . See also
Methods analysis
core job characteristics and, 413 –
414
definition, 412
Hawthorne Studies and, 413
job expansion, 413
labor specialization, 412
limitations of job expansion,
414
motivation and incentive systems
and, 415
psychological components of,
413 – 414
self-directed teams, 414
Job enlargement, human resource
strategy and, 413
Job enrichment, 413
Job expansion, 413
limitations, 414
Job lots, 379
Job rotation, 413
Job shops, facilities, 605
scheduling, 617
Job specialization, 412
John Deere, 536
Johns Hopkins Medical Center, 232
Johnson & Johnson, 46 , 219
Johnson Controls, 463
Johnson Electric Holdings, LTD.,
39
Johnson’s rule, sequencing and,
615 – 616
Johnsonville Sausage Co., 415
Johnstown Foundry, Inc., 431
Joint ventures
supply-chain management and,
448
time-based competition and,
174 – 175
Jones Law Offices
inspection, 232
Juran, Joseph M., 219
Jury of executive opinion, 111
Just-in-time (JIT)
consignment inventory and, 642
definition of, 638
distance reduction and, 643
impact on employees and, 643
increased flexibility and, 643
inventory and, 643 – 646
Kanban and, 647 – 649
layout and, 642 – 643
MRP and, 576
partnerships and, 640 – 642
quality and, 224 , 649
reduced space and inventory and,
643
remove variability and, 643 – 644
scheduling and, 646 – 649
security, 451
supply chain risk and, 451
TQM and, 224
Just-in-time (JIT) inventory
reduce setup costs, 645 – 646
K
Kaizen, lean production and, 649 ,
651
Kaizen event, 649
Kanban, JIT and, 420 , 647 – 649
advantages of, 648 – 649
definition, 647
number of cards or containers and,
648
Kawasaki Heavy Ind, 30
Keiretsu networks, 448 – 449
Key success factors (KSFs), 41 – 43 ,
341
Kindle, forecasting and, 110
Kits, BOMs and, 570
Kitted material, MRP and, 570
Knowledge society, 16 – 17
Knowledge-based pay systems, 415
Kodak, 646
Komatsu, 50
Korean Airlines, 30
Kroger, 375
L
La Quinta hotel site selection, 351
Labinel, 30
Labor planning, human resources
and, 411 – 412
employment-stability policies and,
411
job classifications and, 412
work rules and, 412
work schedules and, 411 – 412
Labor productivity
location strategies and, 342
as productivity variable, 15 , 16
Labor scheduling example, LP and,
712 – 713
Labor specialization, job design and,
412
Labor standards, 420 – 430
historical experience, 421
predetermined time standards,
425 – 427
time studies, 421 – 425
work sampling, 427 – 430
Large lots, integrated supply chain
and, 452
Last-in, first-out (LIFO), 751 n
Last-in, first-served (LIFS), 751 n
Latecoere, 30
Latest finish time (LF), 72 , 74
Latest start time (LS), 72 , 74
Layout, types of, 370 – 371
Layout design, OM decisions and, 42
Layout strategies, 367 – 406
ethical dilemma, 392
fixed-position layout, 370 , 377 – 378
lean operations, 642 – 643 , 652
lean operations and JIT, 642 – 643
office layout and, 370 , 371 – 372
process-oriented layout and, 371 ,
378 – 383
product-oriented, 371
repetitive and product-oriented
layout and, 386 – 391
retail layout and, 370 , 372 – 375
servicescapes, 375
strategic importance of, 370
types of, 370 – 371
using software, 393
warehouse and storage layouts and,
370 , 375 – 377
work cells, 371 , 383 – 386
Lead time:
additional probabilistic models,
511 – 513
inventory model and, 501
MRP and, 570 – 571
probabilistic model, inventory
management and, 511 – 513
Leaders in quality, 219
Lean operations, 19 , 635 – 658
definition, 638
eliminate waste and, 638 – 639
ethical dilemma, 653
5Ss and, 639
improve throughput and, 640
inventory and, 643 – 646
just-in-time, 640 – 649
kanban, 647 – 649
layout and, 642 – 643
lean organizations, 650 – 652
material requirements planning
and, 576
quality and, 649
removing variability, 639 – 640
scheduling and, 646 – 649GENERAL INDEX I17
services, 652
seven wastes and, 638
supplier partnerships, 640 – 642
throughput, 640
Toyota production system and,
638 , 649 – 650
waste elimination, 638 – 639
Learn to improve operations, global
view of operations and, 34
Learning curves, 775 – 790
applying, 778 – 782
coefficients and, 779 – 781
definition, 776
doubling approach and, 777 ,
778 – 779
formula approach and, 779
limitations of, 783
services, manufacturing and,
777 – 778
strategic implication of, 782 – 783
table approach and, 779 – 782
Least-squares method, trend
projections and, 124 – 126
Legal change, product development
and, 166
Legends of Poker, 678 , 688
Lekin® finite capacity scheduling
software, 617 – 618
Level schedules, JIT and, 647
Level scheduling, 538
Level strategy, aggregate planning
and, 538
Levi, 197
Lexus, 111
Life cycle, strategy and, 34 , 164 – 165
Life cycle assessment, 173 , 198
Limitations of :
job expansion, 414
learning curves, 783
MRP, 575 – 576
rule-based dispatching systems,
616 – 617
Limited arrival population, 749
Linear programming (LP), 699 – 728
changes in the objective function
coefficient and, 707 – 708
changes in the resources, 706 – 707
corner-point method and, 705
definition of, 700
diet problem and, 711
feasible region and, 703
feed-mix problem and, 711
fixed-charge problem, 715
formulating problem and, 701 – 702
Glickman Electronics example,
701 – 702
graphical solution to, 702 – 705
integer and binary variables,
713 – 715
iso cost, 708
iso-profit line solution method and,
703 – 705
labor scheduling and, 712 – 713
minimization problems and,
708 – 709
objective function and, 701 , 707 –
708
production-mix example and,
710 – 711
requirements of a programming
problem and, 701
right-hand-side values and, 706 –
707
sensitivity analysis, 705 – 708
sensitivity report, 706
simplex method of, 713
transportation method, 543 – 545
using software, 716 – 718
validity range for shadow prices,
707
why we use LP, 707
Linear regression analysis, 131 – 136
Lion King revenue management, 548
Little’s Law, 763
L.L. Bean, 223
Loading jobs, short term scheduling
and, 604 , 605
assignment method, 608 – 610
Gantt charts, 607 – 608
input-output control, 606 – 607
Local optimization, managing the
supply chain and, 451 – 452
Location, costs and, 340 – 341
Location, importance of, 340 – 341
Location decisions, factors affecting,
341 – 344
Location strategies, 337 – 366
center-of-gravity method and,
348 – 349
costs of, 340 – 341 , 342
exchange rates and currency risk
and, 342
factors affecting location decisions,
341 – 344
geographic information systems
(GIS), 351 – 353
methods of evaluating location
alternatives, 344 – 350
objective of, 340
political risks, values and culture
and, 343
proximity to competitors and, 344
proximity to markets and, 343 –
344
proximity to suppliers and, 344
service location strategy, 350 – 351
strategic importance of, 340 – 341
tangible costs and, 342
transportation model, 349 – 350
using software, 354 – 355
Locational cost-volume analysis,
346 – 347
Lockheed Martin, 172
Logan Airport, 700
Logistics management, supply chain
management, and, 456 – 459
reverse, 203 , 460 – 461
shipping systems and, 456 – 457
sustainability, 200 – 202
third-party logistics (3PL) and,
458 – 459
warehousing and, 457 – 458
Longest processing time (LPT), 611
Long-range forecast, 108 – 109
Los Angeles Airport, M/M/S model
and, 761
Lot size reduction
integrated supply chain and, 452
lean operations and JIT, 644 – 645
Lot sizing decision, 576 – 580
Lot sizing summary, 579 – 580
Lot sizing techniques, MRP and,
576 – 580
economic order quantity, 577 – 578
lot-for-lot, 576
periodic order quantity, 578 – 579
Lot tolerance percent defective
(LTPD), 359
Lot-for-lot, 576
Low-cost leadership, 38
Low-level coding, MRP and, 570
Lufthansa, 257 , 313
M
Machine technology, 294 – 295
Machines, operator input to, 416 – 417
MAD (mean absolute deviation),
118 – 119 , 121
Maintenance and reliability, 659 – 676
autonomous maintenance, 670
defined, 662
ethical dilemma, 671
increasing repair capabilities, 670
preventive maintenance, 667 – 670
reliability, 663 – 667
strategic importance of, 662 – 663
total productive maintenance, 671
Maintenance/repair/operating (MROs)
inventories and, 490 – 491
Major league baseball umpires, 610
Make-or-buy decisions, 176 – 177 ,
446 – 447
Malcolm Baldrige National Quality
Awards, 45 , 218
Management, as productivity
variable, 15 , 16 – 17
Management, MRP and
dynamics of, 575
JIT and, 576
Management process, OM and, 7
Manager, project, 63 – 64
Managerial issues, control charts and,
259 – 260
Managing bullwhip effect, 474 – 476
Managing demand, capacity and,
312 – 313I18 GENERAL INDEX
Managing inventory. See Inventory
management
Managing quality, 213 – 244 . See also
Total quality management
cost of, 218 – 219
defining, 217 – 219
ethics and, 219
implications of, 217 – 218
international quality standards, 218
role of inspection, 230 – 233
services and, 233 – 234
strategy and, 216
tools of TQM, 226 – 230
total quality management, 219 – 226
Manila, cartoon industry in, 33
Manufacturability, product
development and, 170
Manufacturing
learning curve and, 777 – 778
organizational chart, 5
regulations, 203 – 204
repetitive, 280 – 281
Manufacturing cycle time, 640
MAPE (Mean absolute percent
error), 120 , 121
MapInfo, 353
Maptitude, 353
Maquiladoras, 34
Market survey, 111 – 112
Market-based price model, 455
Marketing, OM and, 4
Markets
global view of operations and, 34
proximity to, 343 – 344
Marriott, 456
Mass customization
focus in, 284 – 285 , 286
OM and, 19
Mastek Corp., agile project
management, 67
Master production schedule, 535 ,
567 – 568
Master schedule, scheduling issues
and, 575 , 603
Material flow cycle, 491
Material handling costs, 375
Material requirements planning
(MRP), 563 – 598 . See also
Dependent inventory model
requirements
buckets and, 576
capacity planning and, 581 – 583
closed loop, 581
defined, 566
dependent demand, 566
dependent inventory model
requirements and, 566 – 571
distribution resource planning
(DRP) and, 584
dynamics, 575
enterprise resource planning
(ERP), 584 – 587
ethical dilemma, 587
extensions of, 580 – 583
gross material requirements plan
and , 571 – 572
JIT and, 576
limitations and, 575 – 576
lot-sizing techniques and, 576 – 580
net requirements plan and, 572 –
575
planning bill, time-phased product
structure and, 570
safety stock and, 575
services and, 583 – 584 , 587
structure for, 571 – 575
using software, 588 – 589
Material requirements planning II
(MRP II), 580 – 581
Mathematical approaches, aggregate
planning and, 543 – 545
Matrix organization, 63
Mattel, 48, 204
Maturity phase, product life cycle
and, 165
Maximax, decision-making under
uncertainty and, 681
Maximin, decision-making under
uncertainty, 681
Maximization problems, linear
programming and, T3 – 7
McDonald’s Corp., 42 , 175 , 235 , 755
Global Company Profile, 368 – 369
hamburger assembly line, 387
inventory management, 463 , 652
process analysis, 288
process strategy, 298
quality, 235
scheduling, 652
supply chain risks and tactics, 450
McKesson Corp., 494 , 642
Mean absolute deviation (MAD),
118 – 119 , 121
Mean absolute percent error
(MAPE), 120 , 121
Mean chart limits, setting of, 250 – 253
Mean squared error (MSE), 119 – 120 ,
121
Mean time between failures (MTBF),
664 – 665
Measurement, productivity and,
14 – 15
Measuring:
forecast error, 117 – 120
supply chain performance, 461 – 464
Medium-range forecast, 108 – 109
Meijer, 421
Mercedes-Benz, 46 , 172 , 175 , 223 ,
340
sustainability, 198 , 203
Merck mission statement, 36
MERCOSUR, 34
Mercury Marine, 445
Messier-Bugatti, 30
Messier-Dowty, 30
Methods analysis, 417 – 419
Methods for aggregate planning,
538 – 545
Methods of evaluating location
alternatives,
center-of-gravity method, 348 – 349
factor-rating method, 344 – 350
locational cost-volume analysis,
346 – 347
transportation model, 349 – 350
Methods time measurement (MTM),
427
Methods Time Measurement
Association, 427 n
Mexico, NAFTA and, 34
Micro Saint software, 792
MicroGreen Polymers, 199
Microsoft Corp., 40 , 64 – 65 , 112 , 172 ,
174
Microsoft Project, 66
entering data, 86
PERT analysis, 87
project management and, 86 – 88
tracking the time status of a
project, 87 – 88
viewing the project schedule, 86 – 87
Milliken, 218
Milton Bradley, 493
Milwaukee Paper
activity-on-arrow (AOA), 71
activity-on-node (AON), 68 – 70 , 71
completion of product on time
and, 79
computing project variance, 78
critical path, 76
earliest finish time (EFT), 73
earliest start time (EST), 73
expected times and, 78
latest finish time (LFT) and, 74 – 75
latest start time, (LST) and, 74 – 75
project crashing, 83 – 85
project network, 87
project schedule, 86 – 87 , 90
sample Gantt chart, 86
slack time and, 75 – 76
standard deviation and, 79
time estimates, 71
variances, 78 , 79
MindView, 66
Minimal-cost-flow problem, T5 – 13
Minimization problems, LP and,
708 – 709 , T3 – 7 to T3 – 8
Minimizing costs, independent
demand inventory and, 497 –
501
Minimum cost of insertion technique,
T5 – 10
Miscellaneous services, aggregate
planning and, 546 – 547
Missions, global view of operations
and, 35 – 36 , 37GENERAL INDEX I19
Mitigation tactics, supply chain risks,
450
Mitsubishi Heavy Ind, 30
Mixed strategy, aggregate planning
and, 538
Mixing options, aggregate scheduling
and, 537 – 538
MNC (Multinational corporation),
49
Models, independent demand and,
502 – 507
MODI method (modified
distribution):
how to use, T4 – 2 to T4 – 4
solving a problem, T4 – 2 to T4 – 4
transportation problems and, T4 – 2
to T4 – 4
Modular bills, MRP and, 569 – 570
Modular design, product
development and, 171
Modularization, service efficiency
and, 181
Modules, repetitive focus and, 283
Moment-of-truth, service design and,
181
Monitoring forecasts, 138 – 139
Monte Carlo method, 794
Monte Carlo simulation, 794 – 797
Monterey Jack cheese, 175 – 176
Most likely time, PERT and, 77
Motivation, incentive systems, 415
Motivation systems, job design and,
415
Motorola, 218 , 221
Moving averages
quantitative forecasting and,
114 – 116
weighted, 115–116
MROs, 490 – 491
MRP., see Material requirements
planning
Mrs. Field’s Cookies, 375
MSE (mean squared error), 119 – 120 ,
121
Muda, 651
Multidomestic strategy, global
operations and, 49
Multifactor productivity, 14 – 15
Multimodal shipping, logistics
management and, 457
Multinational corporation (MNC), 49
Multiphase system, 752
Multiple regression, 136 – 137
Multiple regression analysis, 136 – 137
Multiple server queuing model,
757 – 761
Multiple traveling salesmen problem
(MTSP), T5 – 4 , T5 – 8
Multiplicative seasonal model, 127
Multiproduct case, break-even
analysis and, 320 – 322
Muther Grid, 372
N
Nabisco, 110
NAFTA (North American Free
Trade Agreement), 34
Naive approach, quantitative
forecasting and, 113 – 114
NASCAR Racing Team, Global
Company Profile, 408 – 409
National car rental, 730
National chains, aggregate planning
and, 546
National Highway Safety
Administration, 203
Natural variations, statistical process
control and, 246 – 247
Nature of aggregate planning, 534 –
535
Nearest neighbor procedure, T5 – 5 to
T5 – 7
Negative exponential probability
distribution, 752
Negotiation strategies, vendor
selection and, 455
Nestlé, 50 , 455
Net material requirements plan,
MRP and, 572 – 574
Net present value, strategy-driven
investments and, 324 – 326
Net requirements plan, MRP and,
572 – 575
Networks, routing and scheduling
vehicles and, T5 – 3
New challenges in OM, 18 – 19
New England Foundry, 771 – 772
New Guinea, SEATO and, 34
New products, generating, 165 – 166
New York City potholes, regression
analysis of, 137
New Zealand, SEATO and, 34
Night Hawk, 314
Nike, 112 , 458
Nintendo, 110
Nissan
annual inventory turnover, 463
level strategy, 538
low-emission vehicles, 194
scheduling, 577
supply chain risks and tactics,
450
Nodel Construction Company,
132 – 137
Nodes, routing and scheduling
vehicles and, T5 – 3
Noise, in work area, 417 , 418
Non-basic variables, T3 – 3
Nordstrom Department Store
inspection, 232
Normal curve areas, A2 – A3 , T1 – 4 to
T1 – 7
Normal distribution, A2 – A3
Normal time, labor standards and,
422 , 423
North American Free Trade
Agreement, 34
Northwest-corner rule,
transportation models and,
732 – 733
Nucor, 216
Nurse shortage, 619
N.Y. Edison, 125 – 126
O
Oakwood Hospital, 766
Objective function, LP problems and,
701
Objective function coefficients,
allowable ranges and, 707 – 708
Objectives of routing and scheduling
vehicle problems, T5 – 2
Occupational Safety and Health
Administration (OSHA), 203,
431 , 431 n
Office Depot, 421 , 459
Office layout, 370 , 371 – 372
Office Max, 534
Office relationships chart, 372
Official Board Markets weekly
publication, 455
Old Oregon Wood Store, 630
Olive Garden Restaurant. See also
Darden Restaurants
forecasting, 113
inspection, 232
JIT, 640
OM. See Operations management
OM in Action
airline capacity, matching to
demand, 313
Align Technology mass
customization, 285
Amazon robot warehouse strategy, 376
Benetton, ERP software and, 585
blue jeans and sustainability, 197
car assembly lines, sustainability
in, 203
Cessna Aircraft Company lean
production, 642
Delta Airlines, project management
and, 66
Denmark’s meat cluster, 345
DHL, supply chain and, 458
Disney musical’s revenue
management, 548
frequent flyer miles, booking seat
with, 257
hospital accident avoidance, 232
hospital benchmarks against
Ferrari Racing Team, 224
hotel industry, technology changes
and, 298
incentives to unsnarl traffic jams in
the OR, 415
Iowa data center locations, 343
iPad menu, 289I20 GENERAL INDEX
JC Penney, supply chain and, 453
La Quinta hotel site selection, 351
Lean Production at Cessna
Aircraft, 642
mass customization for straight
teeth, 285
Mastek Corp. agile project
management, 67
Milton Bradley inventory
management, 493
missing perfect chair, 416
New York City potholes and
regression analysis, 137
Oakwood Healthcare ER
guarantee, 753
Olive Garden, forecasting and, 113
operating room traffic jams, 415
Orlando Magic short-term
scheduling, 604
Reshoring to Small-Town U.S.A., 47
retail services, saving time, 421
retail’s last 10 yards, 495
RFID tags help control bullwhip
effect, 475
Richey International’s spies, 235
roses, supply-chain management
and, 446
San Francisco General Hospital
lean operations, 651
Snapper, aggregate planning and,
535
Starbucks Coffee
productivity and, 14
simulation, 797
Subaru’s clean, green set of wheels,
205
Taco Bell
product development, 174
productivity and lower costs and,
18
3D printers, 172
Tour de France, 85
Toyota reworking production, 650
UPS
linear programming, 709
staffing, 426
U.S. cartoon production in Manila,
global view of operations, 33
Zero wait time guarantee in
Michigan’s ER, 753
One-sided window, T5 – 12
Online auctions, 456
Online catalogues, 456
Online exchanges, 456
On-time delivery, 488
Operating characteristics (OC)
curves, 263 – 264 , T2 – 2 to T2 – 3
Operations analyst, OM and, 9
Operations and productivity,
1 – 28 . See also operations
management
Operations chart
job design and, 418
method analysis and, 419
Operations layout strategy. See
Layout strategies
Operations management
decision process in, 678 – 679
definition, 4
ethics and social responsibility, 19
goods and services, 11 – 13
growth of services, 11 – 12
Hard Rock Café and, 2 – 3
heritage of, 8 – 10
integrating with other activities, 43
job opportunities in, 7 – 8
management process, 7
new challenges, 18 – 19
operations for goods and services,
11 – 13
organizing to produce goods and
services, 4 , 6
productivity, service sector and,
17 – 18
productivity challenge, 13 – 18
productivity measurement, 14 – 15
productivity variables, 15 – 17
reasons to study, 6 – 7
service growth, 11 – 12
service pay, 12 – 13
significant events in OM, 10
supply chain and, 6
ten strategy decisions, 7 , 8
what operation managers do, 7 – 8
where OM jobs are, 7 – 8
why study?, 6 – 7
Operations managers jobs, 7 – 8
Operations strategy in a global
environment, 29 – 58
competitive advantage through
operations, 36 – 39
developing missions and strategies,
35 – 36
global view, 32 – 35
issues in, 40 – 41
outsourcing, 44 – 48
strategy development and
implementation, 41 – 44
strategy options, 49 – 50
ten strategic OM decisions, 39 , 43 ,
44
using software, 51 – 52
Operator input to machines, 416 –
417
Opportunities in an integrated supply
chain, 452 – 454
Opportunity cost, assignment
method and, 608 – 610 , 608 n
Opportunity loss, 610
Optimistic time in PERT, 77
Options, limiting for service
efficiency, 181
Oracle Primavera, 66
Ordering cost, 495 – 496
Organization, building and staffing,
43 – 44
Organization charts, 5
Organizing for product development,
169 – 170
Organizing to produce goods and
services, 4 , 6
Origin points, transportation
modeling and, 730
Orlando Magic, 230 . See also Amway
Center
aggregate planning, revenue
management, and, 560
control chart, 230
forecasting and, 154 – 155
MRP and, 595 – 596
short-term scheduling and, 604 ,
631 – 632
sustainability, 208–209
Orlando Utilities Commission,
Global Company Profile,
660 – 661
Otis Elevator, 342
Outsourcing
defined, 44 – 46
rating outsource providers, 47 – 48
risks of, 46 – 47
theory of comparative advantage,
46
types of, 447
P
P system, 514 – 515
Pacific Cycle LLC, 447
Paddy-Hopkirk Factory, 419
Paraguay, MERCOSUR and, 34
Parallel path, redundancy and,
666 – 667
Parameter, sensitivity analysis and,
705 – 706
Parametric Technology Corp., 179
Pareto charts, 226 , 227 – 228
Pareto principle, 491
Park Plaza Hotel, 198
Parker Hi-Fi Systems, 525
Partial tour, T5 – 6
Partnering relationships, supply chain
strategies and, 19
Partnerships, JIT and, 640 – 642
Part-time employees, 412
Path, T5 – 6
Pattern of arrivals at the system,
749 – 750
Pay, service sector and, 12 – 13
p-charts, 256 – 257 , 259
Pegging, 575
People, sustainability issues and,
195 – 196
PepsiCo
mission statement, 36
supply chain management, 462 – 463
OM in Action (Continued)GENERAL INDEX I21
sustainable production process,
200
Performance criteria, for sequencing
jobs, 611
Periodic inventory systems, 493
Periodic order quantity (POQ),
578 – 579
Perpetual inventory system, 493 , 514
Perrier, 219
Personal ethics, 460
Personal time allowances, 422
PERT (program evaluation and
review technique)
activity-on-arrow (AOA) example,
71
activity-on-node (AON) example,
69 – 70
critique, 85 – 86
framework, 67 – 68
Gantt charts versus, 65
Microsoft Project analysis, 87
network diagrams and approaches,
68
probability of project completion,
79 – 82
time estimates, 77 – 78
PERT analysis, Microsoft Project
and, 87
Pessimistic time estimate, PERT and,
77
Phantom bills of material, MRP and,
570
Pharmaceutical companies, use of
RFID tags, 295
Philippines, cartoon industry and, 33
Physical sciences, OM and, 10
Pig production, 300
Pilferage, 494
Ping Inc., 285
Pipelines, logistics management and,
457
Pirelli SpA, 52–53
Pivot column, T3 – 4
Pivot number, T3 – 4
Pivot row, T3 – 4
Pixar, 373
Plan-Do-Check-Act (PDCA), 220 –
221
Planned order receipt, MRP and, 574
Planned order release, MRP and, 574
Planning bills, MRP and, 570
Planning horizons, aggregate
planning and, 532 – 533
Planning process, aggregate planning
and, 532 – 533
Plant manager position, OM and, 9
Poisson distribution, 250 n, 750
Poisson table, A4
Poka-yoke
lean operations, 650
service blueprinting, 292
source inspection and, 231
Political change, generating new
products and, 166
Political risk, location strategy and,
343
Polycon Industries, 646
POM for Windows, A6 – A7
accessing, 21
aggregate planning, 553
break-even analysis, 327
decision table and trees, 689
factor rating models, 51
forecasting, 144
inventory problems, 517
layout strategy, 393
learning curves, 784
linear programming, 718
location problems, 354 – 355
material requirements planning
(MRP), 588
project scheduling, 89
queuing problems, 766
reliability problems, 672
short-term scheduling, 624
simulation and, 801
SPC control charts, OC curves,
acceptance sampling and
process capability, 267
transportation problems, 739
use of, A6 – A7
Porsche, 650
Port of Baltimore, 119 – 120
Port of Charleston, 451
Port of Miami warehouse tenting,
696
Portion-control standards, 176
Postponement, mass customization
and, 285
supply chain management and,
453
Potholes, New York City, 137
Pratt & Whitney, machine technology
and, 295
Precedence relationship, in assemblyline balancing, 387
Predetermined time standards,
425 – 427
Preferred Hotels and Resorts
Worldwide, 235
Prevention costs, quality and, 218
Preventive maintenance, 667 – 670
Priority rules, sequencing jobs and,
611 – 614
Probabilistic inventory models and
safety stock, 508 – 510
other models, 511 – 513
Probability distribution, Monte Carlo
simulation, 794
Process analysis, design and, 288 – 293
flowchart, 289
job design and, 419
process chart, 289 – 290
service blueprinting, 292 – 293
time-function mapping, 289
value-stream mapping, 290 – 291
Process capability, SPC and, 260 – 262
definition, 260
index (Cpk) and, 261 – 262
ratio (Cp) and, 260 – 261
Process charts, 289 – 290 , 418 , 419
Process choices, comparison of,
286 – 288
Process comparison, 286 – 288
Process control, 295 – 296
Process design
mass customization, 285
OM and
customer interaction and, 293 –
294
Process focus
process strategies and, 282 – 283 ,
286
scheduling, 605
Process improvement consultants,
OM positions and, 9
Process mapping, 289
Process redesign, 298 – 299
Process strategy, 279 – 305
analysis and design, 288 – 293
comparison and, 286 – 288
defined, 282
equipment and technology
selection, 288
four process strategies, 282 – 288
mass customization focus and,
284 – 286
process focus and, 282 – 283
process redesign, 298 – 299
product focus, 284
production technology, 294 – 298
repetitive focus and, 283
service process design, special
considerations for, 293 – 294
technology in services, 298
Process time of a station, 314
Process-chain-network (PCN)
analysis, 179 – 181
Process-focused facilities, 605
Process-oriented layout, 371 , 378 – 383
computer software for, 382 – 383
focused work center and focused
factory, 386
work cells and, 371 , 383 – 386
Procter & Gamble, 172 – 173 , 195 ,
198 , 474
Producer’s risk, 263 , T2 – 3 to T2 – 4
Product decision, 163
Product design issues, 171 – 173 . See
also Design of goods and
services
application of decision trees and,
182 – 184
computer-aided design (CAD), 171
computer-aided manufacturing
(CAM), 172I22 GENERAL INDEX
life cycle assessment (LCA), 173
mass customization, 285
modular design, 171
regulations, 203
robust design, 171
standard for the exchange of
product data (STEP), 172
sustainability, 173 , 198 – 200
3D printing and, 172
value analysis, 173
virtual reality technology, 172 – 173
Product development, 166 – 170
alliances and, 175
continuum, 173 – 175
development system, 166
global OM, 34
house of quality and, 166 – 169
issues for design and, 171 – 173
joint ventures and, 174 – 175
manufacturability and, 170
OM challenges, 19
organizing for, 169 – 170
purchasing technology by
acquiring a firm and, 174
quality function deployment
(QFD), 166 – 169
teams and, 170
3-D printing, 172
value engineering and, 170
Product development continuum,
173 – 175
Product failure rate (FR), reliability
and, 664
Product focus, 284 , 286 , 288
Product generation, new
opportunities, 166
Product liability, quality and, 218
Product life cycle, 164
management and, 178 – 179
strategy and, 41 , 164 – 165
Product life-cycle management
(PLM), 178 – 179
Product manager, 169 – 170
Product strategy options support
competitive advantage, 163 –
164
Product-by-value analysis, 165
Product-focused facilities, 605
Production
defined, 4
doubling along learning curve,
777
transition from design to, 184
varying capacity, 536
Production order quantity model,
502 – 504
Production technology, 294 – 298
automated guided vehicles (AGV),
296
automated storage and retrieval
system (ASRS), 296
automatic identification system
(AIS), 295
computer-integrated manufacturing
(CIM), 297 – 298
flexible manufacturing system
(FMS), 297
machine technology, 294 – 295
process control, 295 – 296
radio frequency identification
(RFID), 295
robots, 296
vision systems, 296
Production-mix example, LP and,
710 – 711
Production/operations, OM and, 4
Productivity
defined, 13
multifactor, 14 – 15
single-factor, 14
Productivity, Starbucks Coffee and,
14
Productivity challenge and OM, 13
defined, 13
measurement of, 14 – 15
service sector and, 17 – 18
variables, 15 – 17
Productivity variables, 15 – 17
Product-oriented layout, 371 , 386 –
391 , 387
assembly line balancing and,
387 – 391
Profit, sustainability and, 197
Program evaluation and review
technique (PERT). See PERT
Project completion probability, 79 – 82
Project controlling, 66 – 67
Project crashing and cost-time tradeoffs, 82 – 85
Project management, 60 – 104
activity-on-arrow example, 71
activity-on-node example, 69 – 70
calculating slack time, 75 – 76
cost-time trade-offs, 82 – 85
critical path analysis, 71 – 72
critique of PERT and CPM, 85 – 86
determining the project schedule,
71 – 76
ethical dilemma, 89
ethical issues in, 64
framework of PERT and CPM,
67 – 68
identifying the critical path, 75 – 76
importance of, 62
Microsoft Project, 77 , 86 – 88
network diagrams and approaches,
68
non-critical paths, 81 – 82
PERT/CPM in, 67 – 68
probability of project completion,
79 – 82
project controlling, 66 – 67
project crashing, 82 – 85
project planning, 62 – 65
project scheduling and, 65
time estimates in, 77 – 78
using software, 89 – 90
variability in activity times, 77 – 82
work breakdown structure, 64 – 65
Project Management Institute (PMI),
8 , 64
Project manager, 63 – 64
Project network, 69
Project organization, 62 – 63
Project planning, 62 – 65
Project scheduling, 65
determining, 71 – 76
Microsoft Project view, 86 – 87
Proplanner, 179 , 383
Provide better goods and services,
global view of operations and,
34
Providing redundancy, reliability and,
665 – 667
Proximity
to competitors, location strategies
and, 344
to markets, location strategies and,
343 – 344
to suppliers, location strategies
and, 344
in workspace, 372
Psychological components, job design
and, 413 – 414
Pull data, 452
Pull system, 640
kanban, 647 – 649
Purchase orders outstanding, MRP
and, 570
Purchase technology by acquiring
firm, 174
Purchasing, centralized, 455 – 456
Purdue Pharma LP, 298
Push systems, 640
Q
Q systems, 514
QFD. See Quality Function
Deployment (QFD)
Quain Lawn and Garden, Inc.,
725 – 726
Qualitative forecasting methods, 111
consumer market survey, 111 – 112
Delphi method, 111
jury of executive opinion, 111
market survey, 111 – 112
sales force composite, 111
Quality, 213 – 244 . See also Total
quality management (TQM)
cost of, 218 – 219
defining, 217 – 219
demand, capacity and, 311 – 287
ethics and, 219
house of, 166 – 167
implications of, 217 – 218
Product design issues (Continued)GENERAL INDEX I23
international quality standards,
218 , 454
leaders in, 219
lean operations, 649
Malcolm Baldrige National Quality
Award, 218
productivity measurement, 15
role of inspection, 230 – 233
services and, 233 – 234
strategy and, 216
tools of TQM, 226 – 230
total quality management, 219 – 226
Quality circle, 222
Quality control, 10
Quality function deployment (QFD),
166 – 169
Quality loss function (QLF), 225
Quality manager, 9
Quality robust, 224 – 225
Quantitative forecasts, 111
associative models, 112
time series models, 112
Quantity discount models, inventory
management and, 505 – 507
Quantity discounts
contracting, 455
Queue costs, 753 – 754
Queuing models, variety of, 754 – 765
Little’s Law and, 763
Model A(M/M/l): single channel
with Poisson arrivals/
exponential service times,
754 – 757
Model B(M/M/S): multiple-channel
queuing model, 757 – 761
Model C(M/D/l): constant-servicetime model, 762
Model D: finite-population model,
763 – 765
use of waiting-line tables,
759 – 760
using software, 766
Queuing problems, simulation of, 797
Queuing theory, 748 – 749
Quik Lube, 260
R
Rackspace, 534
Radio frequency identification
(RFID), 295 , 452 , 475
Railroads, logistics management and,
457
Random number
table of, 795, A4
Random number intervals, Monte
Carlo simulation and, 795
Random stocking, warehouse layout
and, 377
Random variations, time series
forecasting and, 113
Range chart limits, setting of,
253 – 254
using of, 253 – 254
Rapid Reviews:
Chapter 1 Operations and
Productivity, 27 – 28
Chapter 2 Operations Strategy in a
Global Environment, 57 – 58
Chapter 3 Project Management,
103 – 104
Chapter 4 Forecasting, 165 – 166
Chapter 5 Design of Goods and
Services, 191 – 192
Chapter 6 Managing Quality,
243 – 244
Chapter 7 Process Strategy and
Sustainability, 305 – 306
Chapter 8 Location Strategies,
365 – 366
Chapter 9 Layout Strategies,
405 – 406
Chapter 10 Human Resources,
Job Design, and Work
Measurement, 439 – 440
Chapter 11 Supply-Chain
Management, 469 – 470
Chapter 12 Inventory
Management, 527 – 528
Chapter 13 Aggregate Planning,
561 – 562
Chapter 14 Material Requirement
Planning (MRP) and ERP,
597 – 598
Chapter 15 Short-Term Scheduling,
633 – 634
Chapter 16 Lean Operations,
657 – 658
Chapter 17 Maintenance and
Reliability, 675 – 676
Module A. Decision Making Tools,
697 – 698
Module B. Linear Programming,
727 – 728
Module C. Transportation Model,
745 – 746
Module D. Waiting Line Models,
773 – 774
Module E. Learning Curves,
789 – 790
Module F. Simulation, 807 – 808
Supplement 5 Sustainability in the
Supply Chain, 211 – 212
Supplement 6 Statistical Process
Control, 277 – 278
Supplement 7 Capacity and
Constraint Management,
305 – 306
Supplement 11 Supply-Chain
Management Analytics,
485 – 486
Rapid-Lube case study, 55
Rating outsource providers, 47 – 48
Raw material inventory, 490
R-chart, 248 , 253 – 254
Record accuracy, inventory
management and, 493
Red Lobster Restaurants
location studies, 362 – 363
time study, 423
Reduce costs, global view of
operations and, 33 – 34
Reduce inventory, JIT and, 643 – 644
Reduce lot sizes, JIT and, 644 – 645
Reduce setup costs, JIT and,
645 – 646
Reduce variability, JIT inventory and,
643 – 644
Reduced space and inventory, JIT
and, 643
Redundancy, reliability and, 665 – 667
Regal Marine, 55 , 162
Global Company Profile, 160 – 161
product design, 189–190
strategy at, 55
supply chain management,
467 – 468
Regression and correlation analysis,
forecasting and, 131 – 137
Relationship chart, 372
Reliability, 663 – 667 . See also
Maintenance and reliability
defined, 662
providing redundancy and,
665 – 667
using software to improve, 672
Reneging customers, 750
Reorder point (ROP) inventory
management and, 501 – 502
Repair capabilities, increasing, 670
Repetitive and product-oriented
layout, 386 – 391
Repetitive facilities, scheduling and,
605
Repetitive focus, process strategy and,
283 , 286
Repetitive manufacturing, Harley
Davidson and, 280 – 281
Reputation, quality and, 217
“Request for quotation,” 447
Requirements of an LP problem, 701
Reservations systems, 314
Reshoring, 46 , 47
Resource Conservation and Recovery
Act, 204
Resources, linear programming and,
706 – 707
Resources view, operations strategy
and, 40
Respect for people, TPS and, 649
Response, competitive advantage
and, 39 – 40
Restaurants. See also Darden
restaurants; Fast-food restaurants
aggregate planning and, 546
MRP and, 583 – 584
Retail layout, 370 , 372 – 375I24 GENERAL INDEX
Retail stores. See also Specialty retail
shops
inventory management, 495
job design, 421
scheduling services and, 618 – 619
Revenue function, break-even
analysis and, 318
Revenue management, aggregate
planning and, 547 – 550
Revenue sharing, 455
Reverse auctions, 456
Reverse logistics, 203 , 460 – 461
RFID, 295 , 452 , 475
RFQs (requests for quotes), 447
Richey International, 235
Ricoh Corp., 228
Right-hand/left-hand chart, 418
Right-hand-side values, LP and,
706 – 707
Risk
decision making under, 682 – 683
outsourcing, 46 – 47
reducing with incremental changes,
322 – 323
supply chain and, 449 – 451 , 472 –
474
Ritz-Carlton Hotels
quality, 218 , 242
Robert Bosch, 34
Robots, 296 , 297 , 376
Robust design, product development
and, 171
Robust model, inventory
management and, 500 – 501
Rochester Manufacturing Corp.,
302
Rolls-Royce, 30
Rope, in bottleneck management, 317
Route sheet, 178
Routing service vehicles, T5 – 5 to
T5 – 11
Routing vehicles, T5 – 4
Rubbermaid, 162 , 534
Run test, charts and, 260
Rusty Wallace’s NASCAR Racing
Team, Global Company
Profile, 408 – 409
S
Saab, 30
Saber Roofing, use of GIS system,
352 – 353
SAE (Society of Automotive
Engineers), 176 – 177
Safe Drinking Water Act, 204
Safe Place Infant Security Solution,
295
Safeskin Corp., 37
Safety stock
inventory management and, 501 ,
508 – 510
MRP and, 575
Sales and operations planning
(S&OP), 533 – 534
Sales force composite, forecasting
and, 111
Sales incentives, 452
Sample missions, 37
Samples, SPC and, 247 . See also
Acceptance sampling
Sam’s Club, 495
Samsung, 34 , 163
San Diego Hospital, 129 – 130
San Francisco General Hospital, 651
SAP AG, 586
SAP PLM, 179
SAS, 257
SAS/GIS, 353
S.C. Johnson, 196 , 200
Scatter diagrams, TQM tools and,
226 , 227
Scheduling
criteria, 604 – 605
decisions, 532
forward and backward and, 603 –
604
just-in-time and, 646 – 649
lean operations, 646 – 649 , 652
linear programming example,
712 – 713
mass customization, 285
OM decisions and, 8
project, 65 , 71 – 76
service vehicles and, T5 – 11 to
T5 – 13
vehicles, T5 – 4
Schneider National, 457
Schwinn Bicycle Co., 447
SCOR model, 463 – 464
Seasonal demands, capacity and, 312
aggregate planning, 537
airline industry, 313
Seasonal variations in data, 126 – 131
Seasonality, time series and, 112
SEATO, 34
Second-order smoothing, 124
Security, JIT, supply chain
management and, 451
Selection of equipment and
technology, process strategy
and, 294 – 298
Self-directed teams, 414
Sensitivity analysis, LP and, 705 –
708
Sensitivity Report, 706
Sequencing, jobs in work centers,
611 – 617
critical ratio and, 614 – 615
definition, 611
earliest due date, 611 , 614
first come, first served, 614
Johnson’s rule and, 615 – 616
limitations of rule-based
dispatching systems, 616 – 617
priority rules for dispatching jobs,
611 – 614
shortest processing time, 611 , 614
Sequential sampling, T2 – 2
Service blueprinting, 292 – 293
Service industry inspection, 232
Service level, probabilistic models
and, 508
Service pay, 12 – 13
Service recovery, 234
Service sector
defined, 12
demand and capacity management
in, 313 – 314
documents for, 181 – 182
efficiency and, 181
forecasting and, 140 – 141
location strategy, 350 – 351
operations in, 11 – 13
organization chart, 5
productivity, boosting, 294
productivity and, 17 – 18
TQM in, 232 – 234
Service vehicle scheduling, T5 – 11 to
T5 – 13
Service(s). See also Service Sector
aggregate planning and, 545 – 547
defined, 11
design of, goods and, 179 – 182
differences from goods and, 11
documents for, 179 – 182
focus, 288
growth of, 11 – 12
inventory control, 494 – 495
lean operations in, 652
learning curves in, 777 – 778
MRP and, 583 – 584
pay in, 12 – 13
process design, 293 – 294
scheduling and, 618 – 621
service blueprinting, process
strategy and, 292 – 293
service characteristics, waiting line
system and, 751 – 752
service time distribution, waiting
line system and, 752
technology, 298
total quality management, services
and, 233 – 234
Servicescapes, 375
SERVQUAL, 234
Setup cost, 496
reducing in lean operations and
JIT, 645 – 646
Setup time, 496
steps for reducing, 646
Seven steps in forecasting, 110 – 111
Seven tools of TQM, 226 – 230
Seven wastes, lean operations and,
638
Shader Electronics, LP problem
example, T3 – 1 to T3 – 7GENERAL INDEX I25
Shadow price, 707
Shared value, 194
Shell Lubricants, 299
Sherwin Williams, 163
Shipping systems, 456 – 457
Shortest processing time (SPT), 611 ,
614
Short-range forecast, 108
Short-term scheduling, 599 – 634 . See
also Scheduling
airlines, 619
cyclical scheduling, service
employees and, 620 – 621
ethical dilemma, 621 – 622
finite capacity (FCS) and, 617 – 618fi
nite loading, and, 604
importance of, 602
infinite loading and, 604
issues and, 602 – 605
limitations of rule-based
dispatching systems, 616 – 617
loading jobs, 605 – 610
priority rules for sequencing jobs
and, 611 – 614
process-focused facilities and, 605
repetitive facilities and, 605
scheduling criteria, 604 – 605
sequencing, jobs in work centers,
611 – 617
services and, 618 – 621
using software, 622 – 624
Shouldice hospital, 163 – 164 , 284
Shrinkage, 494
Siemens, 179 , 382
Significant events in OM, 10
Signs, symbols, artifacts, 375
Simplex method of LP, 713 , T3 – 1
to T3 – 10 . See also Linear
programming
artificial and surplus variable, T3 – 7
converting constants to equations,
T3 – 2
definition, 713 , T3 – 2
setting up first simplex table, T3 – 2
to T3 – 4
simplex solution procedures, T3 – 4
to T3 – 6
solving minimization problems,
T3 – 7 to T3 – 8
summary of simplex steps for
maximization problems, T3 – 6
Simulation, 791 – 808
advantages and disadvantages, 793
defined, 792
inventory example, 797 – 799
Monte Carlo, 794 – 797
queuing problem and, 797
using software, 800 – 801
Singapore Airlines, 257
Single channel queuing model/
Poisson arrivals/ exponential
service times, 754 – 757
Single sampling, T2 – 2
Single-factor productivity, 14
Single-period inventory model,
513 – 514
Single-phase system, 752
Single-product case, break-even
analysis and, 319 – 320
Single-server queuing system, 751 ,
754 – 757
Single-stage control of
replenishment, 452
Six Sigma, 221 – 222 , 222 n, 261
Size of arrival population, 749
SKUs, 495
Slack time, 75 – 76
Slack variables, simplex method and,
T3 – 2
Slotting fees, 374 , 392
Smith, Adam, 412
Smiths Aerospace, 30
Smoothing constant, 116 – 117
SMT’s negotiation with IBM, 787 –
788
Snapper Lawn Mowers, 534 – 535
Social accounting, 197
Social responsibility, OM and, 19
Sociological and demographic
change, generating new
products and, 166
Software. See Excel OM; Excel
spreadsheets, creating your
own; POM for Windows
Solutions to even-numbered
problems, A8 – A19
Solved Problems
aggregate planning, 554 – 555
capacity and constraint
management, 328 – 329
decision making, 691 – 692
forecasting, 144 – 146
human resources, job design, and
work measurement, 432 – 433
inventory management, 517 – 519
layout strategy, 394 – 396
lean operations, 653 – 654
learning curves, 784 – 785
linear programming, 718 – 719
location problems, 355 – 357
maintenance and reliability, 672
modem production, 53
MRP and ERP and, 589 – 592
process strategy, 300
product design, 186
project management, 90 – 93
quality, 236
queuing, 766 – 768
short-term scheduling, 624 – 626
simulation, 801 – 802
statistical process control, 267 – 268
supply chain management, 465 – 466
supply chain management
analytics, 480 – 481
sustainability, 206 – 207
tire industry globalization, 52 – 53
transportation modeling, 740 – 741
Solving routing and scheduling
vehicle problems, T5 – 4
Sony, 32 , 46 , 225
Source inspection, 231
Sourcing issues: make-or-buy vs.
outsourcing, 446 – 447
South Korea
SEATO and, 31
South Korea, manufacturing in, 51
Southern Recreational Vehicle Co.,
362
Southwest Airlines, 38 , 257 , 313 , 414
activity mapping, 43 , 44
activity mapping of low-cost
competitive advantage, 44
Southwestern University
forecasting, 154 – 155
project management, 98 – 99
quality management, 239 – 240
Spatial layout, 375
Special considerations for service
process design, 293 – 294
Special packaging, 454
Specialty retail shops, forecasting
and, 140
St. John’s Health Center, 415
Staffing
capacity, 536
global talent, 34 – 35
organization, 43 – 44
work cells, 384 – 386
Stakeholders, 19
Standard deviation, calculation, 248 n
Standard deviation of the regression,
133
Standard error of the estimate,
133 – 134
Standard for the exchange of product
data (STEP), 172
Standard normal distribution, T1 – 5
to T1 – 7
Standard normal table, A2 – A3 , T1 – 5
to T1 – 7
Standard time, labor standards and,
422 , 423
Standard work practice, TPS and,
650
Standardization, supply-chain
management and, 453
Starbucks Coffee
productivity and, 14
scheduling software, 619
simulation and, 797
Statistical process control (SPC), 226 ,
229 – 230 , 245 – 278
acceptance sampling, 262 – 265
assignable variations, 247
average outgoing quality (AOQ)
and, 264 – 265I26 GENERAL INDEX
c-charts, 257 – 259
central limit theorem and, 248 – 249
control charts, 230 , 241 , 247 – 248
control charts for attributes, 256 –
259
control charts for variables, 248
definition, 246
managerial issues and control
charts, 259 – 260
mean chart limits, 250 – 253
natural variations, 246 – 247
operating characteristic curve and,
263 – 264
patterns on control charts, 259
p-charts, 256 – 257 , 259
process capability, 260 – 262
process capability index and,
261 – 262
process capability ratio and, 260 –
261
R-chart, 248, 253 – 254
samples, 247
setting mean and range charts,
254 – 256
setting range chart limits and,
253 – 254
using ranges and mean charts,
250 – 255
using software, 266 – 267
variables for, 248
which chart to use, 259
x-bar chart, 248 , 250 – 253 , 259
Statistical tools for managers, T1 – 1
to T1 – 8
continuous probability
distributions, T1 – 4 to T1 – 7
discrete probability distribution,
T1 – 2 to T1 – 4
expected value of a discrete
probability distribution, T1 – 3
variance of a discrete probability
distribution, T1 – 3 to T1 – 4
Status, viewing in Microsoft Project,
87 – 88
Steakhouses restaurant chain, 289
Stepping-stone method,
transportation model and,
734 – 737
Stock-keeping units (SKUs), 377
Stop & Shop, 376
Stopwatch studies, 421 – 424
Storage, 289 n, 478 – 479
Strategic importance of:
layout decisions, 370
learning curves, 782 – 783
location, 340 – 341
maintenance and reliability, 662 –
663
short-term scheduling, 602
supply-chain management, 444 –
446
Strategic OM decisions, 41 – 43
Strategy
aggregate planning, 535 – 538
capacity and, 311
competitive advantages and, 163 – 164
definition, 36
developing missions and, 35 – 36
driven investments, applying
investment analysis to, 324 – 326
global operation options and, 49
human resource, 410
international, 49
issues in operations and, 41 – 44
life cycle and, 164 – 165
multidomestic, 49
operations in a global environment,
29 – 58
quality and, 216
service locations and, 350 – 351
transnational, 50
Strategy, aggregate planning
development and
implementation
key success factors, 41 – 42
Strategy development and
implementation, 41 – 44
building and staffing the
organization, 43 – 44
core competencies and, 42 – 43
implementing 10 strategic OM
decisions and, 44
integrating OM and other
activities, 43
key success factors, 41 – 43
Structure for MRP, 571 – 575
Subaru, 205
Subcontracting, 536
Sub-Saharan Africa, 460
Subtours, T5 – 8
Super Fast Pizza, 40
Supplier selection analysis, 476 – 477
Suppliers
audits of, 195
development, 454 – 455
evaluation, 454
lean operations in services and, 652
location in proximity to, 344
partnerships in lean operations and
JIT, 640 – 642
Supply chain, 6
partnering, 19
risk, 449 – 451
Supply-chain management, 441 – 470
Supply chain management analytics,
471 – 486
evaluation techniques, 472 – 474
managing the bullwhip effect, 474 – 476
supplier selection analysis and,
476 – 477
Supply Chain Operations
Reference model (SCOR),
463 – 464
transportation mode analysis and,
477 – 478
warehouse storage, 478 – 479
Supply Chain Operations Reference
model (SCOR), 463 – 464
benchmarking and, 463
definition, 444
distribution management, 459
E-procurement and, 456
ethics and, 460 , 465
forecasting and, 109 – 110
globalization, 33
integrated and, 451 – 454
inventory assets, 461 – 463
JIT and, 451
joint ventures and, 448
keiretsu networks and, 448 – 449
logistics management, 456 – 459
Manager and Planner, 9
measuring performance and,
461 – 464
mitigation tactics and, 450
objective of, 444
risk, 449 – 451
software, 584
sourcing issues: make-or-buy vs.
outsourcing, 446 – 447
sourcing strategies and, 447 – 449
strategic importance of, 444 – 446
strategies and, 447 – 449
suppliers, few, many and, 447
supply base, building, 454 – 456
Supply Chain Operations
Reference (SCOR) model,
463 – 464
sustainability and, 460 – 461
vertical integration, 448
virtual companies, 449
Surplus variables, T3 – 7
Surrogate (substitute) interaction,
process, 180
Survey, market, 111 – 112
Sustainability
commons, 195
corporate social responsibility, 194
end-of-life phase, 203
lean operations, 652
logistics, 200 – 202
OM and, 19
product design, 198 – 200
product design and, 173
production process, 200
regulations and industry standards,
203 – 205
supply-chain management, and,
460 – 461
systems view, 195
triple bottom line, 195 – 198
Sustainability software, 584
SWOT analysis, 41
Symbols, servicescapes, and, 375
System nervousness, 575
Statistical process control (Continued)GENERAL INDEX I27
System reliability, 663 – 665
Systems view of sustainability, 195
T
Tables
control chart limits, 252
learning-curve approach, 779 – 782
Normal curve areas, A2–A3
Poisson distribution, A4
random numbers, 795, A4
TacoBell, 164
forecasting, 140
lowering costs with productivity
and energy savings, 18
product development, 174
Taguchi concepts, 224 – 225
Takt time, 384 , 384 n
Takumi, 219
TAL Apparel Ltd., 452 , 453
Tangible costs, location strategies
and, 342
Target-oriented quality, 225
Teams, self-directed, 414
Techniques for evaluating supply
chain, 472
Technological change, generating new
products and, 166
Technological forecasts, 109
Technology. See also Production
technology
acquiring by purchasing firm, 174
focus, 288
group, 177
human resource constraints, 410
Teijin Ltd, 174 – 175
Teijin Seiki, 30
Temperature, in work area, 417
Temple University Hospital, 776 , 778
Ten OM strategy decisions, 7 , 8 , 39 ,
43 , 44
Tesla, 194
Test scores, forecasting success by,
141
Texas Instruments, 49 , 218 , 222
Thales, 30
Theory of comparative advantage, 46
Theory of constraints (TOC),
capacity and constraint
management, 317
Therbligs, 426
Third-party logistics (3PL), 458 – 459
Three Mile Island nuclear facility,
417
Three time estimates in PERT, 77 – 78
3M, 162
3-D printing, 172
Throughput, lean operations and,
640
Throughput time, 315
Time aggregation, 507
Time estimates, in PERT, 77 – 78
Time fences, 575
Time horizons, 108 – 109
Time Measurement Units (TMUs),
426
Time series forecasting, 112 – 131
cycles in, 113
cyclical variations in data, 131
decomposition of time series and,
112 – 113
exponential smoothing and,
116 – 117
exponential smoothing with trend
adjustment, 120 – 124
least-square methods, 124 – 126
mean absolute deviation, 118 – 119
measuring forecast error, 117 – 120
moving averages and, 114 – 116
naive approach to, 113 – 114
random variations and, 113
seasonal variations in data,
126 – 131
seasonality, 112 – 113
smoothing constant, 116 – 117
trend and, 112
trend projections and, 124 – 126
Time status, viewing in Microsoft
Project, 87 – 88
Time studies, labor standards and,
421 – 425 , 430
Time-based competition, product
development and, 173 – 175
alliances, 175
joint ventures, 174 – 175
purchasing technology by buying a
firm, 174
Time-function mapping, 289
Tools of total quality management,
225 – 230 . See also Control
charts
cause and effect diagrams, 227
check sheets, 226
flowcharts, 228 – 229
histogram, 229
knowledge of, 225
Pareto charts, 227 – 228
scatter diagrams, 227
statistical process control,
229 – 230
Toray Industries, 30
Toshiba, 497
Total productive maintenance
(TPM), 671
Total quality management (TQM),
219 – 230
benchmarking, 222 – 223
continuous improvement, 220 – 221
definition, 219
employee empowerment, 222
flow chart, 216
just-in-time, 224
plan-do-check-act (PDCA),
220 – 221
services, 232 – 234
Six Sigma, 221 – 222
Taguchi concepts, 224 – 225
tools of, 225 – 230
total productive maintenance
(TPM), 671
Total slack time, 76
Tour, T5 – 15
Tour de France, 85
Toy manufacturing in China, 48
Toyota Motor Corp., 34 , 110 , 164 ,
651
annual inventory turnover, 463
Global Company Profile, 636 – 637
level strategy, 538
low-emission vehicles, 194
reworking production line, 650
supply chain risks and tactics,
450
Toyota Production System, 636 – 637 ,
649 – 650
continuous improvement and, 649
defined, 638
respect for people, 649
standard work practice, 650
Toys “R” Us, 421
TQM. See Total quality management
(TQM)
Tracking signal, forecasts and, 138
Transition to production, 184
Transnational strategy, global
operations and, 50
Transportation
location strategies and, 349 – 350
waste, 289 n
Transportation matrix, 731
Transportation method of linear
programming, 543 – 545
Transportation mode analysis,
477 – 478
Transportation models, 729 – 746
defined, 730
degenergy and, 737 – 738
demand not equal to supply and,
737
initial solution and, 732 – 734
intuitive lowest-cost method and,
733 – 734
location and strategies and,
349 – 350
northwest-corner rule and, 732 – 733
special issues in, 737 – 738
stepping-stone method and,
734 – 737
using software, 738 – 739
Transportation problems,
MODI and VAM methods and,
T4 – 1 to T4 – 10
MODI method, T4 – 2 to T4 – 4
VOGEL’s approximation method
(VAM), T4 – 4 to T4 – 7
Traveling salesman problem (TSP),
T5 – 4 , T5 – 5 to T5 – 8I28 GENERAL INDEX
Trend projections, forecasting and,
112 , 124 – 126
Triple bottom line, 195 – 198
Trucking
logistics management and, 457
sustainability and, 201
Trust, managing the supply chain
and, 453
TRW airbag plant, 222
Turkish airline, 257
24/7 operations, scheduling services
and, 619
Twin Falls, Idaho, call center, 50
Two-bin system, 493
Two-sided window, T5 – 12
Type I error, 263
Type II error, 263
Types of forecasts, 109
Tyson, 450
U
Uber Technologies, Inc., 24
Umpires, major league baseball, 610
U.N. Framework Convention on Climate
Change (UNFCCC), 204
Understand markets, global view of
operations and, 34
Undirected arcs, routing and
scheduling vehicles, T5 – 3
Unifi, 445
United Airlines, 354
United States trade agreements, 34
Unlimited arrival population, 749
UPS (United Parcel Service), 416 ,
426 , 457 , 651
logistics, 201 , 458
maintenance and, 662
sustainable product design, 198
Uruguay, MERCOSUR and, 34
U.S., NAFTA and, 34
U.S. Army, 792
US Airways, 257
U.S. Navy, 67
Using ExcelOM, A5
Using POM for Windows, A6 – A7
Utilization, capacity and, 310
V
Validity range for the shadow price,
LP and, 707
Value, shared, 194
Value analysis, 173
Value engineering, product
development and, 170
Value stream mapping (VSM), 290 – 291
Value-chain analysis, 40
Values, location strategy and, 343
Values for use in Poisson distribution,
A4
Variability, lean operations and,
639 – 640 , 643 – 644
Variability in activity times, project
management and, 77 – 82
probability of project completion,
79 – 82
three time estimates in PERT,
77 – 78
Variable costs, break-even analysis
and, 318 , 324
Variable data, control charts for, 259
Variable inspection, 232
Variable(s), control charts for, 248 ,
259
Variance of a discrete probability
distribution, statistical tools
and, T1 – 3 to T1 – 4
Vehicle routing and scheduling, T5 – 1
to T5 – 18
characteristics of problems, and,
T5 – 3 to T5 – 5
introduction, T5 – 2
objectives of routing and
scheduling problems, T5 – 2
other problems, T5 – 13 to T5 – 14
routing service vehicles, T5 – 5 to
T5 – 11
scheduling service vehicles, T5 – 11
to T5 – 13
Vendor-managed inventory (VMI),
452 – 453
Vertical integration, supply-chain
management and, 448
Video Case Studies:
Alaska Airlines:
human resources, 437 – 438
lean operations, 655 – 656
process strategy, 303 – 304
quality, 240 – 242
scheduling challenges, 726
Amway Center sustainability,
208 – 209
Arnold Palmer Hospital:
capacity planning, 333 – 334
culture of quality, 240
hospital layout, 402 – 404
JIT, 656
process analysis, 304
project management, 99 – 100
supply chain and, 468
Darden Restaurants:
location strategies, 362 – 363
outsourcing offshore, 56
statistical process control, 276
supply chain, 467
Frito-Lay:
maintenance, 674
managing inventory, 525 – 526
operations management, 25
statistical process control, 275
sustainability, 209 – 210
Hard Rock Cafe:
forecasting, 155 – 156
global strategy, 55 – 56
human resource strategy, 438
location strategy, 363 – 364
operations management in
services, 25 – 26
project management, 77 ,
100 – 102
scheduling, 632
Orlando Magic:
forecasting and, 154 – 155
MRP and, 595 – 596
revenue management, 560
short-term scheduling, 631 – 632
sustainability, 208–209
Red Lobster, location and
strategies, 362 – 363
Regal Marine:
product design, 189 – 190
strategy at, 55
supply-chain management at,
467 – 468
Ritz-Carlton Hotel company, 242
Wheeled Coach:
inventory control, 526
layout strategy, 404
MRP and, 596
process strategy, 302 – 303
Viewing the project schedule,
Microsoft Project and, 86 – 87
Virgin Australia, 257
Virtual companies, sourcing strategies
and, 449
supply chain strategies and, 449
Virtual reality technology, 172 – 173
Vision systems, production
technology and, 296
Visual workplace, job design and, 420
Vizio, Inc., 449
Vogel’s approximation method
(VAM), transportation
problems and, T4 – 4 to T4 – 7
Volkswagen, 173 , 349 – 350
Volvo, 32
W
Waiting line models, 747 – 774
arrival characteristics and, 749 – 750
characteristics of waiting line
system, 749 – 752
measuring queue performance and, 752
multiphase system and, 752
multiple-server queuing system
and, 752
other queuing approaches, 765
queuing costs, 753 – 754
queuing models, varieties of,
754 – 765
queuing theory, 748 – 749
service characteristics and, 751 – 752
single-phase system and, 752
use of tables and, 759 – 761
using software, 766
waiting-line characteristics and,
750 – 751
Waiting lines, 748GENERAL INDEX I29
Walmart, 375
competing on cost and, 38
cross-docking strategy, 376
retail layout and, 375
RFID, 475
RFID and supply chain, 452 , 475
scheduling, 652
supply chain management and,
110 , 445 , 460 , 463
supply chain risks and tactics, 450
supply-chain review, 196
Walmart Marketplace, 454
Walt Disney Co. See also Walt Disney
Parks and Resorts
Lion King revenue management,
548
Walt Disney Parks and Resorts
experience differentiation and, 38
forecasting and, 110 – 111
Global Company Profile, 106 – 107
maintenance, 662
new products, 162
waiting lines and, 748
Warehouse
logistics management and, 457 –
458
storage, 478 – 479
Warehousing layout, 370 , 375 – 377
cross-docking, 376
customizing, 377
objective, 375
random stocking, 377
Waste, 289 n
Waste elimination, lean production
and, 638 – 639
Waterfall approach to projects, 67
Waterways, logistics management
and, 457
WBS (work breakdown structure),
64 – 65
Weeks of supply, 462 – 463
Weighted moving average forecasts,
115–116
Western Electric Hawthorne plant,
413
What is a learning curve?, 776 – 777
Wheeled Coach
Global Company Profile, 564–565
inventory control, 526
layout strategy, 404
MRP and, 564 – 565 , 568 , 596
process strategy, 302 – 303
Where are OM jobs?, 7 – 8
Whirlpool, 35 , 201 , 296
Why study OM, 6 – 7
Why use linear programming, 700
Wilheim Karmann, 46
Windows, Microsoft’s development
structure, 64 – 65
Winter Park Hotel, 772
Work balance chart, 385
Work breakdown structure (WBS),
project management and,
64 – 65
Work cells, layout and, 371 , 383 –
386
advantage of, 384
focused work center and focused
factory, 386
requirements of, 383 – 384
staffing and balancing, 384 – 386
Work environment
ergonomics and, 415 – 417
job design and, 417
Work measurement (labor standards)
historical experience and, 421
predetermined time standards and,
425 – 427
time studies and, 421 – 425
work sampling and, 427 – 430
Work order, 178
Work rules, human resources and,
412
Work sampling, labor standards and,
427 – 429
Work schedules, labor planning and,
411 – 412
Work-in-process (WIP) inventory,
490 , 604 – 605
World Trade Organization (WTO), 34
ethical issues, 35
X
x-bar chart, 248 , 250 – 253 , 259
Xerox, 218 , 223
Y
Yield management, aggregate
planning and, 547 – 550
Z
z values, A2 – A3
sample size for time study, 424
Zero opportunity costs, 609
Zhou Bicycle Co., 524 – 525
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