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أخواني في الله أحضرت لكم كتاب 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
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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 1. 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 2. 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 3. 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 4. 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 5. 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 https://.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
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