book

Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

Name: Operations Management: Sustainability and Supply Chain Management, Twelfth Edition
ISBN: 9780134422404

by Jay Heizer, Barry Render, Chuck Munson

February 2016

Intermediate to advanced

480 pages

219h 58m

English

Pearson

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Operations Management Sustainability and Supply Chain Management
Operations Management Sustainability and Supply Chain Management
About the Authors
Brief Table of Contents
Table of Contents
Online Tutorials
Preface
New to This EditionChapter-by-Chapter ChangesStudent ResourcesInstructor ResourcesVideo PackageTwo Versions are Available
Operations Management Sustainability and Supply Chain Management
Part One Introduction to Operations Management
Chapter 1 Operations and ProductivityChapter Outline Global Company Profile: Hard Rock CafeLearning Objectives
What Is Operations Management?

Organizing to Produce Goods and Services
The Supply Chain
Why Study OM?
ApproachSolutionInsightLearning Exercise
What Operations Managers Do
The Heritage of Operations Management
Operations for Goods and Services
Growth of ServicesService Pay
The Productivity Challenge
Productivity MeasurementApproachSolutionInsightLearning ExerciseRelated ProblemsProductivity VariablesLaborCapitalManagementProductivity and the Service Sector
Current Challenges in Operations Management
Ethics, Social Responsibility, and Sustainability
Summary
Key TermsDiscussion QuestionsUsing Software for Productivity AnalysisCreating Your Own Excel Spreadsheets Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 1.1SolutionSolved Problem 1.2SolutionProblemsProblems 1.1 to 1.17 relate to The Productivity ChallengeEndnotes
Chapter 1 Rapid Review
Self Test
Chapter 2 Operations Strategy in a Global Environment
Chapter Outline Global Company Profile: BoeingLearning Objectives
A Global View of Operations and Supply Chains
Cultural and Ethical Issues
Developing Missions and Strategies
MissionStrategy
Achieving Competitive Advantage Through Operations
Competing on Differentiation
Competing on Cost
Competing on Response
Issues in Operations Strategy
Strategy Development and Implementation
Key Success Factors and Core CompetenciesIntegrating OM with Other ActivitiesBuilding and Staffing the OrganizationImplementing the 10 Strategic OM Decisions
Strategic Planning, Core Competencies, and Outsourcing
The Theory of Comparative AdvantageRisks of OutsourcingRating Outsource ProvidersApproachSolutionInsightLearning ExerciseRelated Problems
Global Operations Strategy Options
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Outsourcing ProblemsCreating Your Own Excel Spreadsheets Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 2.1SolutionSolved Problem 2.2SolutionProblemsProblems 2.1–2.3 relate to A Global View of Operations and Supply ChainsProblems 2.4 and 2.5 relate to Achieving Competitive Advantage Through OperationsProblem 2.6 relates to Issues in Operations StrategyProblem 2.7 relates to Strategy Development and ImplementationProblems 2.8–2.12 relate to Strategic Planning, Core Competencies, and OutsourcingProblem 2.13 relates to Global Operations Strategy OptionsChapter 2 Rapid ReviewSelf Test
Chapter 3 Project Management
Chapter Outline Global Company Profile: Bechtel GroupLearning Objectives
The Importance of Project Management
Project Planning
The Project ManagerEthical Issues Faced in Project ManagementWork Breakdown Structure
Project Scheduling
Project Controlling
Project Management Techniques: PERT and CPM
The Framework of PERT and CPMNetwork Diagrams and ApproachesApproachSolutionInsightLearning ExerciseActivity-on-Node ExampleApproachSolutionInsightLearning ExerciseRelated ProblemsActivity-on-Arrow ExampleApproachSolutionInsightLearning ExerciseRelated Problems
Determining the Project Schedule
Forward PassEarliest Start Time RuleEarliest Finish Time RuleApproachSolutionInsightLearning ExerciseRelated ProblemsBackward PassLatest Finish Time RuleLatest Start Time RuleApproachSolutionInsightLearning ExerciseRelated ProblemsCalculating Slack Time and Identifying the Critical Path(s)ApproachSolutionInsightLearning ExerciseRelated ProblemsApproachInsightLearning ExerciseRelated ProblemsTotal Slack Time
Variability in Activity Times
Three Time Estimates in PERTApproachSolutionInsightLearning ExerciseRelated ProblemsProbability of Project CompletionApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsDetermining Project Completion Time for a Given Confidence LevelApproachSolutionInsightLearning ExerciseRelated ProblemsVariability in Completion Time of Noncritical PathsWhat Project Management Has Provided So Far
Cost-Time Trade-Offs and Project Crashing
ApproachSolutionInsightLearning ExerciseRelated Problems
A Critique of PERT and CPM
Using Microsoft Project to Manage Projects
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Project Management Problems Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 3.1SolutionSolved Problem 3.2SolutionSolved Problem 3.3SolutionSolved Problem 3.4SolutionSolved Problem 3.5SolutionSolved Problem 3.6SolutionSolved Problem 3.7SolutionProblemsProblems 3.1–3.2 relate to Project PlanningProblem 3.3 relates to Project SchedulingProblems 3.4–3.14 relate to Project Management TechniquesProblems 3.15–3.16 relate to Determining the Project ScheduleProblems 3.17–3.27 relate to Variability in Activity TimesProblems 3.28–3.33 relate to Cost-Time Trade-Offs and Project CrashingEndnotes
Chapter 3 Rapid Review
Self Test
Chapter 4 Forecasting
Chapter Outline Global Company Profile: Walt Disney Parks & ResortsLearning Objectives
What Is Forecasting?
Forecasting Time HorizonsTypes of Forecasts
The Strategic Importance of Forecasting
Supply-Chain ManagementHuman ResourcesCapacity
Seven Steps in the Forecasting System
Forecasting Approaches
Overview of Qualitative MethodsOverview of Quantitative Methods1Time-Series ModelsAssociative Models
Time-Series Forecasting
Decomposition of a Time SeriesNaive ApproachMoving AveragesApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsExponential SmoothingApproachSolutionInsightLearning ExerciseRelated ProblemsSelecting the Smoothing ConstantMeasuring Forecast ErrorMean Absolute DeviationApproachSolutionInsightLearning ExerciseRelated ProblemsMean Squared ErrorApproachSolutionInsightLearning ExerciseRelated ProblemsMean Absolute Percent ErrorApproachSolutionInsightLearning ExerciseRelated ProblemsExponential Smoothing with Trend AdjustmentApproachSolutionInsightLearning ExerciseRelated ProblemsTrend ProjectionsApproachSolutionInsightLearning ExerciseRelated ProblemsNotes on the Use of the Least-Squares MethodSeasonal Variations in DataApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsCyclical Variations in Data
Associative Forecasting Methods: Regression and Correlation Analysis
Using Regression Analysis for ForecastingApproachSolutionInsightLearning ExerciseRelated ProblemsStandard Error of the EstimateApproachSolutionInsightLearning ExerciseRelated ProblemsCorrelation Coefficients for Regression LinesApproachSolutionInsightLearning ExerciseRelated ProblemsMultiple-Regression AnalysisApproachSolutionInsightLearning ExerciseRelated Problems
Monitoring and Controlling Forecasts
ApproachSolutionInsightLearning ExerciseRelated ProblemsAdaptive SmoothingFocus Forecasting
Forecasting in the Service Sector
Summary
Key TermsDiscussion QuestionsUsing Software in ForecastingCreating Your Own Excel SpreadsheetsX Using Excel OMP Using POM for WindowsSolved ProblemsSolved Problem 4.1SolutionSolved Problem 4.2SolutionSolved Problem 4.3SolutionSolved Problem 4.4SolutionSolved Problem 4.5SolutionSolved Problem 4.6SolutionSolved Problem 4.7SolutionSolved Problem 4.8SolutionProblemsProblems 4.1–4.42 relate to Time-Series ForecastingProblems 4.43–4.58 relate to Associative Forecasting MethodsProblems 4.59–4.61 relate to Monitoring and Controlling ForecastsEndnotes
Chapter 4 Rapid Review
Self Test
Part Two Designing Operations
Chapter 5 Design of Goods and ServicesChapter Outline Global Company Profile: Regal MarineLearning Objectives
Goods and Services Selection
Product Strategy Options Support Competitive AdvantageProduct Life CyclesLife Cycle and StrategyIntroductory PhaseGrowth PhaseMaturity PhaseDecline PhaseProduct-by-Value Analysis
Generating New Products
Product Development
Product Development SystemQuality Function Deployment (QFD)ApproachSolutionInsightLearning ExerciseRelated ProblemsOrganizing for Product DevelopmentManufacturability and Value Engineering
Issues for Product Design
Robust DesignModular DesignComputer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM)Virtual Reality TechnologyValue AnalysisSustainability and Life Cycle Assessment (LCA)
Product Development Continuum
Purchasing Technology by Acquiring a FirmJoint VenturesAlliances
Defining a Product
Make-or-Buy DecisionsGroup Technology
Documents for Production
Product Life-Cycle Management (PLM)
Service Design
Process–Chain–Network (PCN) AnalysisAdding Service EfficiencyLimit the OptionsDelay CustomizationModularizationAutomationMoment of TruthDocuments for ServicesApproachSolutionDocumentation for Tellers at Drive-up WindowsInsightLearning ExerciseRelated Problem
Application of Decision Trees to Product Design
ApproachSolutionInsightLearning ExerciseRelated Problems
Transition to Production
Summary
Key TermsDiscussion QuestionsSolved ProblemSolved Problem 5.1SolutionProblemsProblems 5.1–5.3 relate to Goods and Services SelectionProblems 5.4–5.8 relate to Product DevelopmentProblems 5.9–5.17 relate to Defining a ProductProblems 5.18–5.20 relate to Service DesignProblems 5.21–5.28 relate to the Application of Decision Trees to Product DesignEndnotes
Chapter 5 Rapid Review
Self Test
Supplement 5 Sustainability in the Supply Chain
Supplement OutlineLearning Objectives
Corporate Social Responsibility1
Sustainability
Systems ViewCommonsTriple Bottom LinePeoplePlanetProfit
Design and Production for Sustainability
Product DesignApproachSolutionInsightLearning ExerciseRelated ProblemsProduction ProcessLogisticsApproachSolutionInsightsLearning ExerciseRelated ProblemsEnd-of-Life Phase
Regulations and Industry Standards
International Environmental Policies and StandardsEuropean Union Emissions Trading SystemISO 14000
Summary
Key TermsDiscussion QuestionsSolved ProblemsSolved Problem S5.1SolutionSolved Problem S5.2SolutionProblemsProblems S5.1–S5.19 relate to Design and Production for SustainabilityEndnotes
Supplement 5 Rapid Review
Self Test
Chapter 6 Managing Quality
Chapter Outline Global Company Profile: Arnold Palmer HospitalLearning Objectives
Quality and Strategy
Defining Quality
Implications of QualityMalcolm Baldrige National Quality AwardISO 9000 International Quality StandardsCost of Quality (COQ)Leaders in QualityEthics and Quality Management
Total Quality Management
Continuous ImprovementPlan-Do-Check-ActSix SigmaImplementing Six SigmaEmployee EmpowermentBenchmarkingInternal BenchmarkingJust-in-Time (JIT)Taguchi ConceptsKnowledge of TQM Tools
Tools of TQM
Check SheetsScatter DiagramsCause-and-Effect DiagramsPareto ChartsApproachSolutionInsightLearning ExerciseRelated ProblemsFlowchartsApproachInsightLearning ExerciseRelated ProblemsHistogramsStatistical Process Control (SPC)
The Role of Inspection
When and Where to InspectSource InspectionService Industry InspectionInspection of Attributes versus Variables
TQM in Services
Summary
Key TermsDiscussion QuestionsSolved ProblemsSolved Problem 6.1SolutionProblemsProblems 6.1–6.20 relate to Tools of TQMEndnotes
Chapter 6 Rapid Review
Self Test
Supplement 6 Statistical Process Control
Supplement OutlineLearning Objectives
Statistical Process Control (SPC)
Control Charts for VariablesThe Central Limit TheoremSetting Mean Chart Limits (x¯-charts)ApproachInsightLearning ExerciseRelated ProblemsSetting Range Chart Limits (R-Charts)Example S3 Setting Range Limits Using Table ValuesApproachSolutionUsing Mean and Range ChartsSteps to Follow When Building Control ChartsControl Charts for Attributesp-ChartsApproachSolutionLearning Exercisec-ChartsApproachSolutionInsightLearning ExerciseRelated ProblemsManagerial Issues and Control Charts
Process Capability
Process Capability Ratio (Cp)Process Capability Index (Cpk)SolutionInsightLearning ExerciseRelated Problems
Acceptance Sampling7
Operating Characteristic CurveAverage Outgoing Quality
Summary
Key TermsDiscussion QuestionsUsing Software for SPC Creating YOUR OWN Excel Spreadsheets to Determine Control Limits for A C-CHART Using Excel OMP Using Pom for WindowsSolved ProblemsSolved Problem S6.1SolutionSolved Problem S6.2SolutionSolved Problem S6.3SolutionSolved Problem S6.4SolutionSolved Problem S6.5SolutionProblemsProblems S6.1–S6.39 relate to Statistical Process Control (SPC)Self Test
Chapter 7 Process Strategy
Chapter Outline Global Company Profile: Harley-DavidsonLearning Objectives
Four Process Strategies
Process FocusRepetitive FocusProduct FocusMass Customization FocusMaking Mass Customization WorkProcess ComparisonCrossover ChartsApproachSolutionInsightLearning ExerciseRelated ProblemsFocused Processes
Selection of Equipment
Process Analysis and Design
FlowchartTime-Function MappingProcess ChartsValue-Stream MappingApproachSolutionInsightLearning ExerciseRelated ProblemService Blueprinting
Special Considerations for Service Process Design
Production Technology
Machine TechnologyAutomatic Identification Systems (AISs) and RFIDProcess ControlVision SystemsRobotsAutomated Storage and Retrieval Systems (ASRSs)Automated Guided Vehicles (AGVs)Flexible Manufacturing Systems (FMSs)Computer-Integrated Manufacturing (CIM)
Technology in Services
Process Redesign
Summary
Key TermsDiscussion QuestionsSolved ProblemSolved Problem 7.1SolutionProblemsProblems 7.1–7.12 relate to Four Process StrategiesProblems 7.13–7.17 relate to Process Analysis and DesignEndnotes
Self Test
Supplement 7 Capacity and Constraint Management
Supplement OutlineLearning Objectives
Capacity
Design and Effective CapacitySolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsCapacity and StrategyCapacity ConsiderationsManaging DemandDemand Exceeds CapacityCapacity Exceeds DemandAdjusting to Seasonal DemandsTactics for Matching Capacity to DemandService-Sector Demand and Capacity ManagementDemand ManagementCapacity Management
Bottleneck Analysis and the Theory of Constraints
ApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsTheory of ConstraintsBottleneck Management
Break-Even Analysis
Single-Product CaseApproachSolutionInsightLearning ExerciseRelated ProblemsMultiproduct CaseApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsReducing Risk with Incremental ChangesApplying Expected Monetary Value (EMV) to Capacity DecisionsApproach:SolutionInsightLearning ExerciseRelated ProblemsApplying Investment Analysis to Strategy-Driven InvestmentsInvestment, Variable Cost, and Cash FlowNet Present ValueApproachSolutionInsightLearning ExerciseRelated Problems
Summary
Key TermsDiscussion QuestionsUsing Software for Break-Even AnalysisCreating Your Own Excel Spreadsheets Using Excel OM Using POM For WindowsSolved ProblemsSolved Problem S7.1SolutionSolved Problem S7.2SolutionSolved Problem S7.3SolutionSolved Problem S7.4SolutionSolved Problem S7.5SolutionProblemsProblems S7.1–S7.8 relate to CapacityProblems S7.16–S7.31 relate to Break-Even AnalysisProblems S7.32–S7.33 relate to Applying Expected Monetary Value (EMV) to Capacity DecisionsProblems S7.34–S7.45 relate to Applying Investment Analysis to Strategy-Driven InvestmentsSelf Test
Chapter 8 Location Strategies
Chapter Outline Global Company Profile: FedExLearning Objectives
The Strategic Importance of Location
Factors That Affect Location Decisions
Labor ProductivityExchange Rates and Currency RiskCostsPolitical Risk, Values, and CultureProximity to MarketsProximity to SuppliersProximity to Competitors (Clustering)
Methods of Evaluating Location Alternatives
The Factor-Rating MethodApproachSolutionInsightLearning ExerciseRelated ProblemsLocational Cost–Volume AnalysisApproachSolutionInsightLearning ExerciseRelated ProblemsCenter-of-Gravity MethodApproachSolutionInsightLearning ExerciseRelated ProblemsTransportation Model
Service Location Strategy
Geographic Information Systems
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Location ProblemsCreating Your Own Excel SpreadsheetsX Using Excel Om Using Pom for WindowsSolved ProblemsSolved Problem 8.1SolutionSolved Problem 8.2SolutionSolved Problem 8.3SolutionProblemsProblems 8.1–8.4 relate to Factors That Affect Location DecisionsProblems 8.5–8.34 relate to Methods of Evaluating Location AlternativesEndnotes
Chapter 8 Rapid Review
Self Test
Chapter 9 Layout Strategies
Chapter Outline Global Company Profile: McDonald’sLearning Objectives
The Strategic Importance of Layout Decisions
Types of Layout
Office Layout
Retail Layout
Servicescapes
Warehouse and Storage Layouts
Cross-DockingRandom StockingCustomizing
Fixed-Position Layout
Process-Oriented Layout
Approach and SolutionInsightLearning ExerciseRelated ProblemsComputer Software for Process-Oriented Layouts
Work Cells
Requirements of Work CellsStaffing and Balancing Work CellsApproachSolutionInsightLearning ExerciseRelated ProblemThe Focused Work Center and the Focused Factory
Repetitive and Product-Oriented Layout
Assembly-Line BalancingApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated Problems
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Layout ProblemsX Using Excel Om Using Pom for WindowsSolved ProblemsSolved Problem 9.1SolutionSolved Problem 9.2SolutionProblemsProblems 9.1–9.10 relate to Process-Oriented LayoutProblem 9.11 relates to Work CellsProblems 9.12–9.27 relate to Repetitive and Product-Oriented LayoutEndnotes
Chapter 9 Rapid Review
Self Test
Chapter 10 Human Resources, Job Design, and Work Measurement
Chapter Outline Global Company Profile: Rusty Wallace’s NASCAR Racing TeamLearning Objectives
Human Resource Strategy for Competitive Advantage
Constraints on Human Resource Strategy
Labor Planning
Employment-Stability PoliciesWork SchedulesJob Classifications and Work Rules
Job Design
Labor SpecializationJob ExpansionPsychological Components of Job DesignHawthorne StudiesCore Job CharacteristicsSelf-Directed TeamsLimitations of Job ExpansionMotivation and Incentive Systems
Ergonomics and the Work Environment
Methods Analysis
The Visual Workplace
Labor Standards
Historical ExperienceTime StudiesApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsPredetermined Time StandardsApproachSolutionInsightLearning ExerciseRelated ProblemWork SamplingApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated Problem
Ethics
Summary
Key TermsDiscussion QuestionsSolved ProblemsSolved Problem 10.1SolutionSolved Problem 10.2SolutionSolved Problem 10.3SolutionSolved Problem 10.4SolutionSolved Problem 10.5SolutionSolved Problem 10.6SolutionProblemsProblem 10.1 relates to Job DesignProblems 10.2–10.12 relate to Methods AnalysisProblems 10.13–10.46 relate to Labor StandardsEndnotes
Self Test
Part Three Managing Operations
Chapter 11 Supply Chain ManagementChapter Outline Global Company Profile: Darden RestaurantsLearning Objectives
The Supply Chain’s Strategic Importance
ApproachSolutionInsightLearning ExerciseRelated Problems
Sourcing Issues: Make-or-Buy and Outsourcing
Make-or-Buy DecisionsOutsourcing
Six Sourcing Strategies
Many SuppliersFew SuppliersVertical IntegrationJoint VenturesKeiretsu NetworksVirtual Companies
Supply Chain Risk
Risks and Mitigation TacticsSecurity and JIT
Managing the Integrated Supply Chain
Issues in Managing the Integrated Supply ChainLocal OptimizationIncentives (Sales Incentives, Quantity Discounts, Quotas, and Promotions)Large LotsOpportunities in Managing the Integrated Supply ChainAccurate “Pull” DataLot Size ReductionSingle-Stage Control of ReplenishmentVendor-Managed InventoryCollaborative Planning, Forecasting, and Replenishment (CPFR)Blanket OrdersStandardizationPostponementElectronic Ordering and Funds TransferDrop Shipping and Special Packaging
Building the Supply Base
Supplier EvaluationSupplier CertificationSupplier DevelopmentNegotiationsCost-Based Price ModelMarket-Based Price ModelCompetitive BiddingContractingCentralized PurchasingE-ProcurementOnline Catalogs and ExchangesOnline Auctions
Logistics Management
Shipping SystemsTruckingRailroadsAirfreightWaterwaysPipelinesMultimodalWarehousingThird-Party Logistics (3PL)
Distribution Management
Ethics and Sustainable Supply Chain Management
Supply Chain Management EthicsPersonal EthicsEthics Within the Supply ChainEthical Behavior Regarding the EnvironmentEstablishing Sustainability in Supply Chains
Measuring Supply Chain Performance
Assets Committed to InventoryApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsBenchmarking the Supply ChainThe SCOR Model
Summary
Key TermsDiscussion QuestionsSolved ProblemsSolved Problem 11.1SolutionProblemsProblems 11.1–11.3 relate to The Supply Chain’s Strategic ImportanceProblem 11.4 relates to Six Sourcing StrategiesProblems 11.5–11.8 relate to Measuring Supply Chain Performance
Supplement 11 Supply Chain Management Analytics
Supplement OutlineLearning Objectives
Techniques for Evaluating Supply Chains
Evaluating Disaster Risk in the Supply Chain
ApproachSolutionInsightLearning ExerciseRelated Problems
Managing the Bullwhip Effect
A Bullwhip Effect MeasureApproachSolutionInsightLearning ExerciseRelated Problems
Supplier Selection Analysis
ApproachSolutionInsightLearning ExerciseRelated Problems
Transportation Mode Analysis
ApproachSolutionInsightLearning ExerciseRelated Problems
Warehouse Storage
ApproachSolutionInsightLearning ExerciseRelated Problems
Summary
Discussion Questions
Solved Problems
Solved Problem S11.1SolutionSolved Problem S11.2SolutionSolved Problem S11.3SolutionSolved Problem S11.4Solution
Problems
Problems S11.1–S11.5 relate to Evaluating Disaster Risk in the Supply ChainProblems S11.6–S11.9 relate to Managing the Bullwhip EffectProblems S11.10–S11.13 relate to Supplier Selection AnalysisProblems S11.14–S11.17 relate to Transportation Mode AnalysisProblems S11.18–S11.20 relate to Warehouse Storage
Supplement 11 Rapid Review
Self Test
Chapter 12 Inventory Management
Chapter Outline Global Company Profile: Amazon.comLearning Objectives
The Importance of Inventory
Functions of InventoryTypes of Inventory
Managing Inventory
ABC AnalysisApproachSolutionInsightLearning ExerciseRelated ProblemsRecord AccuracyCycle CountingApproachSolutionInsightLearning ExerciseRelated ProblemControl of Service Inventories
Inventory Models
Independent vs. Dependent DemandHolding, Ordering, and Setup Costs
Inventory Models for Independent Demand
The Basic Economic Order Quantity (EOQ) ModelMinimizing CostsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsRobust ModelApproachSolutionInsightLearning ExerciseRelated ProblemsReorder PointsApproachSolutionInsightLearning ExerciseRelated ProblemsProduction Order Quantity ModelApproachSolutionInsightLearning ExerciseRelated ProblemsQuantity Discount ModelsSolution ProcedureApproachSolutionInsightLearning ExerciseRelated Problems
Probabilistic Models and Safety Stock
ApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsOther Probabilistic ModelsDemand Is Variable and Lead Time Is ConstantApproachSolutionInsightLearning ExerciseRelated ProblemLead Time Is Variable and Demand Is ConstantApproachSolutionInsightLearning ExerciseRelated ProblemBoth Demand and Lead Time Are VariableApproachSolutionInsightLearning ExerciseRelated Problem
Single-Period Model
ApproachSolutionInsightLearning ExerciseRelated Problems
Fixed-Period (P ) Systems
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Inventory ProblemsCreating Your Own Excel Spreadsheets Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 12.1SolutionSolved Problem 12.2SolutionSolved Problem 12.3SolutionSolved Problem 12.4SolutionSolved Problem 12.5SolutionSolved Problem 12.6SolutionSolved Problem 12.7SolutionSolved Problem 12.8SolutionSolved Problem 12.9SolutionProblemsProblems 12.1–12.6 relate to Managing InventoryProblems 12.7–12.40 relate to Inventory Models for Independent DemandProblems 12.41–12.50 relate to Probabilistic Models and Safety StockProblems 12.51–12.53 relate to Single-Period ModelParker Hi-Fi SystemsDiscussion QuestionsEndnotes
Chapter 12 Rapid Review
Self Test
Chapter 13 Aggregate Planning and S&OPAggregate Planning and S&OP
Chapter Outline Global Company Profile: Frito-LayLearning Objectives
The Planning Process
Sales and Operations Planning
The Nature of Aggregate Planning
Aggregate Planning Strategies
Capacity OptionsDemand OptionsMixing Options to Develop a PlanChase StrategyLevel Strategy
Methods for Aggregate Planning
Graphical MethodsApproachSolutionInsightLearning ExerciseRelated ProblemAnalysis of Plan 1 ApproachSolutionInsightLearning ExerciseRelated ProblemsAnalysis Of Plan 2 ApproachSolutionInsightLearning ExerciseRelated ProblemsAnalysis Of Plan 3 ApproachSolutionInsightLearning ExerciseRelated ProblemsMathematical ApproachesThe Transportation Method of Linear ProgrammingApproachSolutionInsightLearning ExampleRelated Problems
Aggregate Planning in Services
RestaurantsHospitalsNational Chains of Small Service FirmsMiscellaneous ServicesApproachSolutionInsightLearning ExerciseRelated ProblemsAirline Industry
Revenue Management
ApproachSolutionInsightLearning ExerciseRelated Problem
Summary
Key TermsDiscussion QuestionsUsing Software for Aggregate PlanningCreating Your Own Excel Spreadsheets Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 13.1SolutionSolved Problem 13.2SolutionProblemsProblems 13.1–13.23 relate to Methods for Aggregate PlanningProblems 13.24–13.25 relate to Aggregate Planning in ServicesProblem 13.26 relates to Revenue ManagementEndnotes
Chapter 13 Rapid Review
Self Test
Chapter 14 Material Requirements Planning (MRP) and ERP
Chapter Outline Global Company Profile: Wheeled CoachLearning Objectives
Dependent Demand
Dependent Inventory Model Requirements
Master Production ScheduleBills of MaterialApproachSolutionInsightLearning ExerciseRelated ProblemsModular BillsPlanning Bills and Phantom BillsLow-Level CodingAccurate Inventory RecordsPurchase Orders OutstandingLead Times for Components
MRP Structure
ApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated Problems
MRP Management
MRP DynamicsMRP Limitations
Lot-Sizing Techniques
Extensions of MRP
Material Requirements Planning II (MRP II)Closed-Loop MRPCapacity PlanningApproachSolutionInsightLearning ExerciseRelated Problems
MRP in Services
Distribution Resource Planning (DRP)
Enterprise Resource Planning (ERP)
ERP in the Service Sector
Summary
Key TermsDiscussion QuestionsUsing Software to Solve MRP Problems Using Excel Om Using Pom for WindowsSolved ProblemsSolved Problem 14.1SolutionSolved Problem 14.2SolutionSolved Problem 14.3SolutionSolved Problem 14.4SolutionProblems*Problems 14.1–14.4 relate to Dependent Inventory Model RequirementsProblems 14.5–14.21 relate to MRP StructureProblems 14.22–14.28 relate to Lot-Sizing TechniquesProblems 14.29–14.32 relate to Extensions of MRPEndnotes
Chapter 14 Rapid Review
Self Test
Chapter 15 Short-Term Scheduling
Chapter Outline Global Company Profile: Alaska AirlinesLearning Objectives
The Importance of Short-Term Scheduling
Scheduling Issues
Forward and Backward SchedulingFinite and Infinite LoadingScheduling Criteria
Scheduling Process-Focused Facilities
Loading Jobs
Input–Output ControlApproachSolutionInsightLearning ExerciseRelated ProblemGantt ChartsApproachSolutionInsightLearning ExerciseRelated ProblemApproachSolutionInsightLearning ExerciseRelated ProblemsAssignment MethodApproachSolutionInsightLearning ExerciseRelated ProblemsSequencing JobsPriority Rules for Sequencing JobsPerformance CriteriaApproachSolutionInsightLearning ExerciseRelated ProblemsCritical RatioApproachSolutionInsightLearning ExerciseRelated ProblemsSequencing N Jobs on Two Machines: Johnson’s RuleApproachSolutionInsightLearning ExerciseRelated ProblemsLimitations of Rule-Based Sequencing SystemsFinite Capacity Scheduling (FCS)Scheduling ServicesAirlines24/7 OperationsScheduling Service Employees with Cyclical SchedulingCyclical SchedulingApproachSolutionInsightLearning ExerciseRelated Problems
Summary
Key TermsDiscussion QuestionsUsing Software for Short-Term Scheduling Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem 15.1SolutionSolved Problem 15.2SolutionSolved Problem 15.3SolutionSolved Problem 15.4SolutionSolved Problem 15.5SolutionProblemsProblems 15.1–15.14 relate to Loading JobsProblems 15.15–15.25 relate to Sequencing JobsProblems 15.26–15.27 relate to Scheduling ServicesDiscussion Questions*Chapter 15 Rapid ReviewSelf Test
Chapter 16 Lean Operations
Chapter Outline Global Company Profile: Toyota Motor CorporationLearning Objectives
Lean Operations
Eliminate WasteRemove VariabilityImprove Throughput
Lean and Just-in-Time
Supplier PartnershipsLean LayoutDistance ReductionIncreased FlexibilityImpact on EmployeesReduced Space and InventoryLean InventoryReduce Inventory and VariabilityReduce Lot SizesApproachSolutionInsightLearning ExerciseRelated ProblemsReduce Setup CostsLean SchedulingLevel SchedulesKanbanDetermining the Number of Kanban Cards or ContainersApproachSolutionInsightLearning ExerciseRelated ProblemsAdvantages of KanbanLean QualityLean and the Toyota Production SystemContinuous ImprovementRespect for PeopleProcesses and Standard Work Practice
Lean Organizations
Building a Lean OrganizationLean Sustainability
Lean in Services
Summary
Key TermsDiscussion QuestionsSolved ProblemSolved Problem 16.1SolutionProblemsProblems 16.1–16.12 relate to Lean and Just-in-TimeChapter 16 Rapid ReviewSelf Test
Chapter 17 Maintenance and Reliability
Chapter Outline Global Company Profile: Orlando Utilities CommissionLearning Objectives
The Strategic Importance of Maintenance and Reliability
Reliability
System ReliabilityApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsProviding RedundancyBackup RedundancyApproachSolutionInsightLearning ExerciseRelated ProblemsParallel RedundancyApproachSolutionInsightLearning ExerciseRelated Problems
Maintenance
Implementing Preventive MaintenanceApproachSolutionInsightLearning ExerciseRelated ProblemsIncreasing Repair CapabilitiesAutonomous Maintenance
Total Productive Maintenance
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Reliability ProblemsSolved ProblemsSolved Problem 17.1SolutionSolved Problem 17.2SolutionProblemsProblems 17.1–17.17 relate to ReliabilityProblems 17.18–17.24 relate to Maintenance
Chapter 17 Rapid Review
Self Test
Part Four Business Analytics Modules
Module A Decision-Making ToolsModule OutlineLearning Objectives
The Decision Process in Operations
Fundamentals of Decision Making
ApproachSolutionInsightLearning ExerciseRelated Problems
Decision Tables
ApproachSolutionInsightLearning Exercise
Types of Decision-Making Environments
Decision Making Under UncertaintyApproachSolutionInsightLearning ExerciseRelated ProblemsDecision Making Under RiskApproachSolutionInsightLearning ExerciseRelated ProblemsDecision Making Under CertaintyExpected Value of Perfect Information (EVPI)ApproachSolutionInsightLearning ExerciseRelated Problems
Decision Trees
ApproachSolutionInsightLearning ExerciseRelated ProblemsA More Complex Decision TreeApproachSolutionInsightLearning ExerciseRelated ProblemsThe Poker Decision ProcessApproachSolutionInsightLearning ExerciseRelated Problem
Summary
Key TermsDiscussion QuestionsUsing Software for Decision ModelsCreating an Excel Spreadsheet to Evaluate a Decision Table Using Excel Om Using Pom for WindowsSolved ProblemsSolved Problem A.1SolutionSolved Problem A.2SolutionSolved Problem A.3SolutionProblemsProblems A.1–A.20 relate to Types of Decision-Making EnvironmentsProblems A.21–A.32 relate to Decision TreesModule A Rapid ReviewSelf Test
Module B Linear Programming
Module OutlineLearning Objectives
Why Use Linear Programming?
Requirements of a Linear Programming Problem
Formulating Linear Programming Problems
Glickman Electronics Example
Graphical Solution to a Linear Programming Problem
Graphical Representation of ConstraintsIso-Profit Line Solution MethodCorner-Point Solution Method
Sensitivity Analysis
Sensitivity ReportChanges in the Resources or Right-Hand-Side ValuesValidity Range for the Shadow PriceChanges in the Objective Function CoefficientAllowable Ranges for Objective Function Coefficients
Solving Minimization Problems
ApproachSolutionInsightLearning ExerciseRelated Problems
Linear Programming Applications
Production-Mix ExampleApproachSolutionInsightLearning ExerciseRelated Problems
Diet Problem Example
ApproachSolutionInsightLearning ExerciseRelated Problems
Labor Scheduling Example
ApproachSolutionInsightLearning ExerciseRelated Problems
The Simplex Method of LP
Integer and Binary Variables
Creating Integer and Binary VariablesLinear Programming Applications with Binary VariablesLimiting the Number of Alternatives SelectedDependent SelectionsA Fixed-Charge Integer Programming ProblemApproachSolutionInsightLearning ExerciseRelated Problems
Summary
Key TermsDiscussion QuestionsUsing Software to Solve LP Problems Creating Your Own Excel Spreadsheets Using Excel OM and POM for WindowsSolved ProblemsSolved Problem B.1SolutionSolved Problem B.2SolutionSolved Problem B.3SolutionProblemsProblem B.1 relates to Requirements of a Linear Programming ProblemProblems B.2–B.21 relate to Graphical Solution to a Linear Programming ProblemProblems B.22–B.24 relate to Sensitivity AnalysisProblems B.25–B.33 relate to Solving Minimization ProblemsProblems B.34–B.40 relate to Linear Programming ApplicationsProblems B.41–B.42 relate to Integer and Binary VariablesEndnotes
Module B Rapid Review
Self Test
Module C Transportation Models
Module OutlineLearning Objectives
Transportation Modeling
Developing an Initial Solution
The Northwest-Corner RuleApproachSolutionInsightsLearning ExerciseRelated ProblemsThe Intuitive Lowest-Cost MethodApproachSolutionInsightLearning ExerciseRelated Problems
The Stepping-Stone Method
ApproachSolutionInsightLearning ExerciseRelated Problems
Special Issues in Modeling
Demand Not Equal to SupplyDegeneracy
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Transportation Problems Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem C.1SolutionSolved Problem C.2SolutionProblemsProblems C.1–C.3 relate to Developing an Initial SolutionProblems C.4–C.13 relate to The Stepping-Stone MethodProblems C.14–C.18 relate to Special Issues in Modeling
Module C Rapid Review
Self Test
Module D Waiting-Line Models
Module OutlineLearning Objectives
Queuing Theory
Characteristics of a Waiting-Line System
Arrival CharacteristicsSize of the Arrival (Source) PopulationPattern of Arrivals at the SystemBehavior of ArrivalsWaiting-Line CharacteristicsService CharacteristicsBasic Queuing System DesignsService Time DistributionMeasuring a Queue’s Performance
Queuing Costs
The Variety of Queuing Models
Model A (M/M/1): Single-Server Queuing Model with Poisson Arrivals and Exponential Service TimesSolutionInsightLearning ExerciseRelated ProblemsExample D2 Economic Analysis of Example D1ApproachSolutionInsightLearning ExerciseRelated ProblemsModel B (M/M/S): Multiple-Server Queuing ModelExample D3 A Multiple-Server QueueApproachSolutionInsightLearning ExerciseRelated ProblemsUse of Waiting-Line TablesApproachSolutionInsightLearning ExerciseRelated ProblemModel C (M/D/1): Constant-Service-Time ModelApproachSolutionInsightLearning ExerciseRelated ProblemsLittle’s LawApproachSolutionInsightLearning ExerciseRelated ProblemsModel D (M/M/1 with Finite Source): Finite-Population ModelApproachSolutionInsightLearning ExerciseRelated Problems
Other Queuing Approaches
Summary
Key TermsDiscussion QuestionsUsing Software to Solve Queuing Problems Using Excel OM Using POM for WindowsSolved ProblemsSolved Problem D.1SolutionSolved Problem D.2SolutionSolved Problem D.3SolutionSolved Problem D.4SolutionProblemsProblems D.1–D.39 relate to The Variety of Queuing ModelsThe Winter Park HotelDiscussion QuestionsEndnotes
Module D Rapid Review
Self Test
Module E Learning Curves
Module OutlineLearning Objectives
What Is a Learning Curve?
Learning Curves in Services and Manufacturing
Applying the Learning Curve
Doubling ApproachFormula ApproachApproachSolutionInsightLearning ExerciseRelated ProblemsLearning-Curve Table ApproachApproachSolutionInsightLearning ExerciseRelated ProblemsSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated ProblemsApproachSolutionInsightLearning ExerciseRelated Problems
Strategic Implications of Learning Curves
Limitations of Learning Curves
Summary
Key TermDiscussion QuestionsUsing Software for Learning Curves Using Excel Om Using Pom for WindowsSolved ProblemsSolved Problem E.1SolutionSolved Problem E.2SolutionProblemsProblems E.1–E.32 relate to Applying the Learning CurveProblem E.33 relates to Strategic Implications of Learning CurvesSelf Test
Module F Simulation
Module OutlineLearning Objectives
What Is Simulation?
Advantages and Disadvantages of Simulation
Monte Carlo Simulation
ApproachSolutionInsightLearning ExerciseRelated Problems
Simulation with Two Decision Variables: An Inventory Example
ApproachSolutionInsightsLearning ExerciseRelated Problems
Summary
Key Terms
Discussion Questions
Using Software in Simulation
Using Excel Spreadsheets Using Pom for Windows and Excel OM
Solved Problems
Solved Problem F.1SolutionSolved Problem F.2Solution
Problems
Problems F.1–F.15 relate to Monte Carlo SimulationProblems F.16–F.25 relate to Simulation with Two Decision Variables: An Inventory ExampleSelf Test
Appendixes
Appendix I Normal Curve Areas
Appendix II Values of e−λ for use in the Poisson Distribution
Appendix III Table of Random Numbers
Appendix IV Using Excel OM and POM for Windows
Excel OMPOM for WindowsUsing Excel OM and POM for Windows with MyOMLab
Appendix V Solutions to Even-Numbered Problems
Bibliography
Name Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
General Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z

Content preview from Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

The Importance of Inventory

As Amazon.com well knows, inventory is one of the most expensive assets of many companies, representing as much as 50% of total invested capital. Operations managers around the globe have long recognized that good inventory management is crucial. On the one hand, a firm can reduce costs by reducing inventory. On the other hand, production may stop and customers become dissatisfied when an item is out of stock. The objective of inventory management is to strike a balance between inventory investment and customer service. You can never achieve a low-cost strategy without good inventory management.

All organizations have some type of inventory planning and control system. A bank has methods to control its inventory of ...

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