Operations Management: An Integrated Approach, 5th Edition

SPREADSHEET MODELING WITHIN OM: HOW IT ALL FITS TOGETHER

The models in this chapter have been fairly basic, but you should begin to see some of the powerful uses of models and quantitative analysis. Heery International is a construction firm with an office in Nashville, Tennessee. The average budget for a project is about $2,000,000, varying from $50,000 to $50,000,000. Heery has developed a spreadsheet-based model to help it better assign managers to construction projects. As a result of this model, the company reports that the project assignment process takes much less time than before, assignments are perceived as being more fair among the managers, and travel costs (from managers’ homes to job sites) have been reduced considerably, allowing for increased productivity.

A problem in the airline industry is the recovery from unexpected events, such as weather delays, mechanical problems, and crew unavailability. When such a disruption occurs, significant costs to the airlines and inconveniences to passengers can result. For example, when a flight is canceled, that aircraft does not get to its destination, which causes an aircraft shortage at that location. Continental Airlines recently developed, in association with CALEB Technologies, a system to help the airline recover from such events. While it is not spreadsheet-based, it demonstrates the power of modeling to help solve operational problems. CALEB Technologies and Continental Airlines recently won the Franz Edelman Award ...