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Operations Management: Creating Value Along the Supply Chain, 6th Edition
by
Russell, Roberta S., Virginia Tech ; Taylor, Bernard W.
Publisher: John Wiley & Sons
Publishing Date: 2007/12/21
eText ISBN-10
0-470-38772-6
eText ISBN-13
978-0-470-38772-6
Print ISBN-10
0-470-09515-6
Print ISBN-13
978-0-470-09515-7
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Operations Management: Creating Value Along the Supply Chain, 6th Edition
by
Russell, Roberta S., Virginia Tech ; Taylor, Bernard W.
eTextbook $95.50
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Copyright, vi
About the Authors, ix
Preface, xxiii
Part ONE. OPERATIONS MANA...
Part TWO. SUPPLY CHAIN MA...
Appendix A—Normal Curve A...
Solutions to Selected Odd...
Index, 765
Table of Contents
Copyright, vi
About the Authors, ix
Preface, xxiii
Part ONE. OPERATIONS MANAGEMENT, 1
1. Introduction to Operations Management, 1
What do Operations and Supply Chain Managers Do?, 3
The Operations Function, 4
The Evolution of Operations and Supply Chain Management, 6
Globalization, 9
The China Factor, 10
The Balancing Act at New Balance, 12
India, at Your Service, 12
Productivity and Competitiveness, 13
Strategy and Operations, 16
Primary Task, 16
Core Competencies, 17
Order Winners and Order Qualifiers, 17
Positioning the Firm, 18
Competing on Cost, 18
Competing on Speed, 18
Competing on Quality, 19
Competing on Flexibility, 19
Strategy at Green Mountain Coffee, 19
Strategy Deployment, 20
Policy Deployment, 20
Balanced Scorecard, 21
Operations Strategy, 23
Organization of this Text, 24
Learning Objectives of this Course, 24
Summary, 25
Summary of Key Terms, 25
Questions, 26
Problems, 27
Case Problem 1.1—What Does It Take to Compete?, 28
Case Problem 1.2—Visualize This, 29
Case Problem 1.3—Whither an MBA at Strutledge?, 29
Case Problem 1.4—Weighing Options at the Weight Club, 30
References, 30
Supplement to Chapter 1 Operational Decision-Making Tools: Decision Analysis, 32
Decision Analysis, 33
Decision Making Without Probabilities, 33
Decision Analysis With Excel, 36
Decision Analysis With OM Tools, 36
Decision Making With Probabilities, 37
Expected Value of Perfect Information, 38
Sequential Decision Trees, 39
Summary, 41
Summary of Key Formulas, 41
Summary of Key Terms, 41
Solved Problem, 41
Problems, 42
Case Problem S1.1—Whither an MBA at Strutledge?—Continued, 48
Case Problem S1.2—Transformer Replacement at Mountain States Electric Service, 49
Case Problem S1.3—Evaluating Projects at Nexcom Systems, 50
References, 51
2. Quality Management, 52
What is Quality?, 53
Quality from the Customer’s Perspective, 53
Dimensions of Quality for Manufactured Products, 53
Dimensions of Quality for Services, 55
Quality from the Producer’s Perspective, 55
A Final Perspective on Quality, 56
Quality Management System, 57
The Evolution of Quality Management, 57
Applying Deming’s PDSA Cycle in a Public School System and a Hospital, 59
Quality Tools, 60
Process Flowcharts, 61
Cause-And-Effect Diagrams, 61
Check Sheets and Histograms, 62
Pareto Analysis, 62
Scatter Diagrams, 63
Process Control Charts and Statistical Quality Control, 64
TQM and QMS, 64
The Focus of Quality Management—Customers, 65
Quality Management in the Supply Chain, 65
Measuring Customer Satisfaction, 66
The Role of Employees in Quality Improvement, 67
Kaizen and Continuous Improvement, 67
Quality Circles, 68
Process Improvement Teams, 69
Quality in Services, 69
Quality Attributes in Services, 70
Quick Service and Customer Satisfaction at Pal’s Sudden Service, 70
Ritz-Carlton Hotels: Two-Time Baldrige National Quality Award Winner, 71
Six Sigma, 72
The Six Sigma Goal—3.4 DPMO, 72
Motorola’s Six Sigma Quality, 73
The Six Sigma Process, 74
Improvement Projects, 74
Six Sigma Highlights, 74
The Breakthrough Strategy: DMAIC, 75
North Shore University Hospital: A Six Sigma Project Example, 75
Black Belts and Green Belts, 76
Design for Six Sigma, 77
The Bottom Line—Profitability, 77
The Cost of Quality, 78
The Cost of Achieving Good Quality, 78
The Cost of Poor Quality, 79
The Cost of Poor Quality at Firestone, 80
Measuring and Reporting Quality Costs, 80
The Quality-Cost Relationship, 82
Reducing Quality Costs at Seagate Technology, 82
The Effect of Quality Management on Productivity, 83
Productivity, 83
Measuring Product Yield and Productivity, 83
The Quality-Productivity Ratio, 86
Quality Awards, 87
The Malcolm Baldrige Award, 87
Other Awards for Quality, 88
Baldrige National Quality Award Winners: What It Takes, 89
ISO 9000, 89
Standards, 90
Certification, 90
Implications of ISO 9000 for U.S. Companies, 90
ISO 9001 Certification at Monarcas Morelia, 91
ISO Registrars, 93
Summary, 93
Summary of Key Formulas, 93
Summary of Key Terms, 93
Solved Problems, 94
Questions, 95
Problems, 97
Case Problem 2.1—Designing a Quality-Management Program for the Internet at D4Q, 99
Case Problem 2.2—Quality Management at State University, 99
Case Problem 2.3—Quality Problems at the Tech Bookstores, 100
Case Problem 2.4—Product Yield at Continental Luggage Company, 101
References, 102
3. Statistical Process Control, 103
The Basics of Statistical Process Control, 104
SPC in Quality Management, 105
Quality Measures: Attributes and Variables, 105
SPC Applied to Services, 106
Where to Use Control Charts, 107
Control Charts, 107
Control Charts for Attributes, 108
p
-Chart, 109
Using Control Charts for Improving Health-Care Quality, 111
c
-Chart, 112
Control Charts for Variables, 114
Mean (
x
-) Chart, 114
Range (
R
-) Chart, 117
Using
x
- and
R
-Charts Together, 118
Using Control Charts at Kentucky Fried Chicken, 119
Control Chart Patterns, 119
Sample Size Determination, 121
SPC with Excel and OM Tools, 122
Process Capability, 123
Process Capability Measures, 126
Design Tolerances at Harley-Davidson Company, 126
Process Capability with Excel and OM Tools, 127
Summary, 128
Summary of Key Formulas, 128
Summary of Key Terms, 129
Solved Problems, 129
Questions, 130
Problems, 131
Case Problem 3.1—Quality Control at Rainwater Brewery, 140
Case Problem 3.2—Quality Control at Grass, Unlimited, 141
Case Problem 3.3—Improving Service Time at Dave’s Burgers, 142
References, 142
Supplement to Chapter 3 Operational Decision-Making Tools: Acceptance Sampling, 143
Single-Sample Attribute Plan, 144
Producer’s and Consumer’s Risks, 144
The Operating Characteristic Curve, 145
Developing a Sampling Plan with OM Tools, 145
Average Outgoing Quality, 147
Double- and Multiple-Sampling Plans, 148
Summary, 149
Summary of Key Terms, 149
Solved Problem, 149
Questions, 150
Problems, 150
4. Product Design, 151
The Design Process, 152
Idea Generation, 152
Great Ideas from IDEO, 154
Feasibility Study, 154
Rapid Prototyping, 155
Form Design, 155
Functional Design, 155
Reliability, 155
Mazda’s New Concept Car Embodies Motion, 155
Usability, 159
Production Design, 160
Final Design and Process Plans, 161
Concurrent Design, 162
Technology in Design, 163
Collaborative Product Design, 164
Design Review, 165
Design for Environment, 166
Extended Producer Responsibility, 166
Sustainability, 167
The Greening of Wal-Mart, 168
Quality Function Deployment, 169
Design for Robustness, 174
Summary, 175
Summary of Key Terms, 176
Summary of Key Formulas, 176
Solved Problems, 177
Questions, 177
Problems, 178
Case Problem 4.1—Lean and Mean, 181
References, 182
5. Service Design, 183
The Service Economy, 184
Characteristics of Services, 185
The Service Design Process, 187
The Service-Process Matrix, 188
Tools for Service Design, 191
Service Blueprinting, 191
Front-Office and Back-Office Activities, 192
Servicescapes, 192
Quantitative Techniques, 192
The Health Benefits of Good Design, 193
Waiting Line Analysis for Service Improvement, 193
Elements of Waiting Line Analysis, 193
Elements of a Waiting Line, 194
The Calling Population, 194
The Arrival Rate, 195
Service Times, 195
Arrival Rate Less Than Service Rate, 195
Queue Discipline and Length, 195
Basic Waiting Line Structures, 196
Operating Characteristics, 196
Traditional Cost Relationships in Waiting Line Analysis, 197
The Psychology of Waiting, 198
Improving Waiting Time in England’s National Health Service, 199
Waiting Line Models, 200
The Psychology of Waiting at Bank of America, 200
The Basic Single-Server Model, 201
Service Improvement Analysis, 203
Solution of the Single-Server Model with Excel, 203
Advance Single-Server Models, 204
Multiple-Server Model, 205
The Basic Multiple-Server Model, 205
Summary, 209
Summary of Key Terms, 209
Summary of Key Formulas, 209
Solved Problems, 210
Questions, 211
Problems, 212
Case Problem 5.1—Streamlining the Refinancing Process, 216
Case Problem 5.2—Herding the Patient, 217
Case Problem 5.3—The College of Business Copy Center, 218
Case Problem 5.4—Northwoods Backpackers, 218
References, 219
6. Processes and Technology, 220
Process Planning, 221
Outsourcing, 221
Process Selection, 222
Zara’s Lightening Fast Processes, 223
Process Selection with Breakeven Analysis, 225
Process Plans, 227
Process Analysis, 228
Process Flowcharts, 229
Making Fast Food Faster, 231
Process Innovation, 234
Steps in Process Innovation, 235
Progressive Innovates Processes, 237
Technology Decisions, 238
Financial Justification of Technology, 238
Too Much of a Good Thing Turns Bad for JetBlue, 239
A Technology Primer, 240
Summary, 243
Summary of Key Terms, 243
Summary of Key Formulas, 243
Solved Problem, 243
Questions, 244
Problems, 245
Case Problem 6.1—A Manager’s Woes, 247
Case Problem 6.2—Wrong Meds, Again!, 247
Case Problem 6.3—Hooptie Ride!, 248
References, 250
7. Capacity and Facilities, 251
Capacity Planning, 252
Facilities, 254
Objectives of Facility Layout, 254
Bank of America’s Towering Achievement in Green Design, 255
Basic Layouts, 256
Process Layouts, 256
Product Layouts, 257
Fixed-Position Layouts, 258
Designing Process Layouts, 260
Block Diagramming, 260
Relationship Diagramming, 262
Computerized Layout Solutions, 264
Designing Service Layouts, 264
Designing Product Layouts, 265
Line Balancing, 266
Computerized Line Balancing, 269
Hybrid Layouts, 269
Cellular Layouts, 269
Advantages of Cellular Layouts, 271
Cellular Prowess at Buck Knives, Parker-Hannifin, and Rowe Furniture, 271
Disadvantages of Cellular Layouts, 273
Flexible Manufacturing Systems, 274
Mixed-Model Assembly Lines, 274
Summary, 277
Summary of Key Formulas, 277
Summary of Key Terms, 277
Solved Problems, 278
Questions, 279
Problems, 280
Case Problem 7.1—Workout Plus, 285
Case Problem 7.2—Photo Op—Please Line Up, 286
Case Problem 7.3—The Grab ‘n Go Cafe, 286
References, 288
Supplement to Chapter 7 Operational Decision-Making Tools: Facility Location Models, 289
Types of Facilities, 290
Site Selection: Where to Locate, 290
Global Supply Chain Factors, 291
Regional and Community Location Factors in the United States, 292
Location Incentives, 293
Geographic Information Systems, 293
Location Analysis Techniques, 294
Location Factor Rating, 294
Location Factor Rating with Excel, 295
Center-of-Gravity Technique, 295
Center-of-Gravity Technique with Excel, 298
Load-Distance Technique, 298
Load-Distance Technique with Excel, 300
Summary, 300
Summary of Key Formulas, 301
Summary of Key Terms, 301
Solved Problem, 301
Questions, 302
Problems, 302
Case Problem S7.1—Selecting a European Distribution Center Site for American International Automotive Industries, 305
References, 306
8. Human Resources, 307
Human Resources and Quality Management, 309
The Changing Nature of Human Resources Management, 310
The Assembly Line, 310
Limitations of Scientific Management, 310
Employee Motivation, 311
Human Resources Management at Baldrige National Quality Award-Winning Companies, 312
Contemporary Trends in Human Resources Management, 312
Job Training, 313
Cross Training, 313
Employee Training at Kyphon, Inc., and Triage Consulting Group, 314
Job Enrichment, 314
Empowerment, 314
Teams, 315
Flexible Work Schedules, 315
Alternative Workplaces and Telecommuting, 316
Telecommuting at Merrill Lynch, 317
Temporary and Part-Time Employees, 317
Part-Time Employees at UPS, 317
Employee Compensation, 318
Types of Pay, 318
Gainsharing and Profit Sharing, 318
Managing Diversity in the Workplace, 319
Affirmative Action and Equal Opportunity, 319
Diversity Management Programs, 320
A Commitment to Diversity at UPS and Kodak, 321
Global Diversity Issues, 322
Job Design, 322
The Elements of Job Design, 323
Task Analysis, 323
Worker Analysis, 323
Environmental Analysis, 323
Ergonomics, 324
Technology and Automation, 324
Job Analysis, 325
Process Flowchart, 325
Worker-Machine Chart, 326
Motion Study, 327
Learning Curves, 328
Determining Learning Curves with Excel, 331
Learning Curves with OM Tools, 332
Summary, 332
Summary of Key Formulas, 332
Summary of Key Terms, 332
Solved Problem, 333
Questions, 333
Problems, 334
Case Problem 8.1—Maury Mills, 335
References, 337
Supplement to Chapter 8 Operational Decision-Making Tools: Work Measurement, 338
Time Studies, 339
Stopwatch Time Study, 339
Number of Cycles, 343
Elemental Time Files, 345
Predetermined Motion Times, 345
Work Sampling, 345
Summary, 348
Summary of Key Formulas, 349
Summary of Key Terms, 349
Solved Problems, 349
Questions, 350
Problems, 350
Case Problem S8.1—Measuring Faculty Work Activity at State University, 354
References, 355
9. Project Management, 356
Project Planning, 358
Elements of a Project Plan, 358
The Project Team, 358
A Drug Development Project to Combat Malaria, 360
The Project Manager, 360
Scope Statement, 360
Work Breakdown Structure, 361
Responsibility Assignment Matrix, 362
Global and Diversity Issues in Project Management, 362
Project Management Diversity in China, 363
Project Scheduling, 364
The Gantt Chart, 364
Project Control, 365
Time Management, 366
Cost Management, 366
Quality Management, 366
Performance Management, 366
Communication, 366
Reconstructing the Pentagon after 9/11, 367
Enterprise Project Management, 367
CPM/PERT, 367
The Project Network, 368
AOA Network, 369
AON Network, 370
British Airport Authority’s Terminal Project at Heathrow Airport, 370
The Critical Path, 371
Activity Scheduling, 372
Activity Slack, 374
Probabilistic Activity Times, 376
Probabilistic Time Estimates, 376
CPM/PERT Analysis with OM Tools, 379
Probabilistic Network Analysis, 379
Microsoft Project, 382
PERT Analysis with Microsoft Project, 384
Project Crashing and Time-Cost Tradeoff, 386
Project Crashing, 387
Improving Air Flight Safety and Efficiency at the FAA, 387
The General Relationship of Time and Cost, 390
Summary, 390
Summary of Key Formulas, 391
Summary of Key Terms, 391
Solved Problem, 392
Questions, 393
Problems, 394
Case Problem 9.1—The Bloodless Coup Concert, 402
Case Problem 9.2—Moore Housing Contractors, 403
References, 404
Part TWO. SUPPLY CHAIN MANAGEMENT, 405
10. Supply Chain Management Strategy and Design, 405
Supply Chains, 406
Supply Chains for Service Providers, 407
Value Chains, 408
Successful Supply Chain Design at Toyota and Honda, 410
The Management of Supply Chains, 410
Supply Chain Uncertainty and Inventory, 411
The Bullwhip Effect, 411
Risk Pooling, 412
Eliminating the Bullwhip Effect at Philips Electronics, 413
Information Technology: A Supply Chain Enabler, 413
Electronic Business, 413
Electronic Data Interchange, 414
Strategic Supply Chain Design at 7-Eleven in Japan and the United States, 415
Bar Codes, 415
Radio Frequency Identification, 416
The Internet, 416
Build-To-Order (BTO), 416
Quick Supply Chain Responsiveness and Flexibility at Zara, 418
Supply Chain Integration, 419
Collaborative Planning, Forecasting, and Replenishment, 420
Supply Chain Success at Harley-Davidson, 420
Supply Chain Management (SCM) Software, 422
Measuring Supply Chain Performance, 422
Key Performance Indicators, 422
Process Control, 424
SCOR, 424
Summary, 426
Summary of Key Terms, 426
Summary of Key Formulas, 426
Solved Problem, 427
Questions, 427
Problems, 429
Case Problem 10.1—Somerset Furniture Company’s Global Supply Chain, 430
References, 431
11. Global Supply Chain Procurement and Distribution, 432
Procurement, 433
Outsourcing, 434
Supplier Awards at Intel, 435
E-Procurement, 435
E-Marketplaces, 436
Virtual Manufacturing at Palm Inc., 436
Reverse Auctions, 437
Distribution, 437
Speed and Quality, 437
Amazon.com, 437
Distribution Centers and Warehousing, 438
Postponement, 438
Supply Chain Management at Royal Caribbean, 439
Warehouse Management Systems, 439
Vendor-Managed Inventory, 440
Vendor-Managed Inventory (VMI) at Dell, 441
Collaborative Logistics, 441
Distribution Outsourcing, 441
Transportation, 441
Internet Transportation Exchanges, 444
The Global Supply Chain, 444
Obstacles to Global Supply Chain Management, 445
Duties, Tariffs, and Global Trading Groups, 445
Landed Cost, 446
Web-Based International Trade Logistics Systems, 446
Global Supply Chains in France, 448
Recent Trends in Globalization for U.S. Companies, 448
China’s Increasing Role in the Global Supply Chain, 449
Effects of 9/11 on Global Supply Chains, 451
Summary of Key Terms, 451
Questions, 452
Case Problem 11.1—Somerset Furniture Company’s Global Supply Chain—continued, 452
Supplement to Chapter 11 Operational Decision-Making Tools: Transportation and Transshipment Models, 453
The Transportation Model, 454
Solution of the Transportation Model with Excel, 455
The Transshipment Model, 458
Solution of the Transshipment Problem with Excel, 459
Summary, 460
Summary of Key Terms, 460
Solved Problem, 461
Problems, 461
Case Problem S11.1—Stateline Shipping and Transport Company, 469
Case Problem S11.2—Global Supply Chain Management at Cantrex Apparel International, 470
References, 471
12. Forecasting, 472
The Strategic Role of Forecasting in Supply Chain Management, 474
Supply Chain Management, 474
Sharing Forecasts at Boeing and Alcoa, 475
Quality Management, 475
Strategic Planning, 476
Components of Forecasting Demand, 476
Time Frame, 476
Demand Behavior, 476
Forecasting Methods, 477
Forecasting Process, 478
Forecasting at Dell, 478
Time Series Methods, 480
Moving Average, 480
Weighted Moving Average, 482
Exponential Smoothing, 483
Adjusted Exponential Smoothing, 486
Linear Trend Line, 488
Forecasting Service Calls at Federal Express, 488
Seasonal Adjustments, 490
The CPFR Process at Bayer Consumer Care in the EU, 492
Forecast Accuracy, 493
Mean Absolute Deviation, 493
Cumulative Error, 495
Forecast Control, 496
Time Series Forecasting Using Excel, 498
Forecasting with OM Tools, 501
Regression Methods, 501
Linear Regression, 501
Correlation, 503
Regression Analysis with Excel, 504
Multiple Regression with Excel, 506
Forecasting Demand in the Utilities Industry, 508
Summary, 509
Summary of Key Formulas, 509
Summary of Key Terms, 510
Solved Problems, 510
Questions, 512
Problems, 513
Case Problem 12.1—Forecasting at State University, 523
Case Problem 12.2—The University Bookstore Student Computer Purchase Program, 523
Case Problem 12.3—Cascades Swim Club, 524
References, 525
13. Inventory Management, 526
The Role of Inventory Management in Supply Chain Management, 528
Inventory and Quality Management in the Supply Chain, 529
The Elements of Inventory Management, 529
Demand, 530
Inventory Costs, 530
Inventory Control Systems, 531
Continuous Inventory Systems, 532
Periodic Inventory Systems, 533
The ABC Classification System, 533
Inventory Management at Dell, 533
Determining Supply Chain Strategy by Evaluating Inventory Costs at Hewlett-Packard, 535
Economic Order Quantity Models, 536
The Basic EOQ Model, 536
The Production Quantity Model, 539
Solution of EOQ Models with Excel, 542
Solution of EOQ Models with OM Tools, 542
Quantity Discounts, 543
Quantity Discounts with Constant Carrying Cost, 543
Electronic Auctions for Quantity-Discount Orders at Mars, Inc., 544
Quantity-Discount Model Solution with Excel, 545
Reorder Point, 546
Safety Stocks, 546
Service Level, 547
Reorder Point with Variable Demand, 547
Establishing Inventory Safety Stocks at Kellogg’s, 549
Determining the Reorder Point with Excel, 549
Order Quantity for a Periodic Inventory System, 549
Order Quantity with Variable Demand, 550
Determining the Order Quantity for the Fixed-Period Model with Excel, 550
Summary, 552
Summary of Key Formulas, 552
Summary of Key Terms, 552
Solved Problems, 553
Questions, 554
Problems, 555
Case Problem 13.1—The Instant Paper Clip Office Supply Company, 559
Case Problem 13.2—The Texas Gladiators Apparel Store, 560
Case Problem 13.3—Pharr Foods Company, 560
References, 561
Supplement to Chapter 13 Operational Decision-Making Tools: Simulation, 562
Monte Carlo Simulation, 563
Computer Simulation with Excel, 567
Decision Making with Simulation, 568
Areas of Simulation Application, 571
Waiting Lines/Service, 571
Inventory Management, 571
Production and Manufacturing Systems, 571
Capital Investment and Budgeting, 571
Logistics, 571
Service Operations, 572
Environmental and Resource Analysis, 572
Summary, 572
Summary of Key Terms, 572
Solved Problem, 573
Questions, 574
Problems, 574
References, 578
14. Sales and Operations Planning, 579
The Sales and Operations Planning Process, 580
Disney’s Magic Numbers, 583
Strategies for Adjusting Capacity, 584
Level Production, 584
Chase Demand, 584
Following the Harvest, 585
Peak Demand, 585
Overtime and Undertime, 585
Subcontracting, 585
Part-Time Workers, 585
Backlogs, Backordering, and Lost Sales, 586
Strategies for Managing Demand, 586
Quantitative Techniques for Aggregate Planning, 587
Pure Strategies, 587
How Dell Excells, 588
Mixed Strategies, 590
General Linear Programming Model, 590
The Transportation Method, 590
Other Quantitative Techniques, 595
The Hierarchical Nature of Planning, 599
Collaborative Planing, 599
Available-to-Promise, 599
Aggregate Planning for Services, 602
Yield Management, 602
Overbooking, 602
Fare Classes, 602
Single-Order Quantities, 603
Summary, 604
Summary of Key Terms, 605
Solved Problems, 605
Questions, 607
Problems, 607
Case Problem 14.1—Have a Seat, Bloke, 612
Case Problem 14.2—Erin’s Energy Plan, 613
References, 614
Supplement to Chapter 14 Operational Decision-Making Tools: Linear Programming, 615
Model Formulation, 617
Graphical Solution Method, 618
Linear Programming Model Solution, 622
The Simplex Method, 622
Slack and Surplus Variables, 623
Solving Linear Programming Problems with Excel, 624
Sensitivity Analysis, 625
Sensitivity Ranges, 626
Summary, 628
Summary of Key Terms, 628
Solved Problem, 628
Questions, 629
Problems, 629
Case Problem S14.1—Mossaic Tile Company, 640
Case Problem S14.2—Summer Sports Camp at State University, 641
Case Problem S14.3—Spring Garden Tools, 642
Case Problem S14.4—Walsh’s Juice Company, 643
Case Problem S14.5—Julia’s Food Booth, 643
Case Problem S14.6—The Sea Village Amusement Park, 644
References, 645
15. Resource Planning, 646
Material Requirements Planning (MRP), 647
When to Use MRP, 648
Dependent Demand, 648
Discrete Demand, 649
Complex Products, 649
Erratic Orders, 650
Assemble-to-Order, 650
Master Production Schedule, 650
Product Structure File, 651
Phantom Bills, 653
K-Bills, 653
Modular Bills, 653
Time-Phased Bills, 654
Item Master File, 655
Five Million Possibilities at Hubbell Lighting, 656
The MRP Process, 656
Lot Sizing in MRP Systems, 659
Economic Order Quantity, 659
Periodic Order Quantity, 660
MRP Outputs, 662
Capacity Requirements Planning, 663
Calculating Capacity, 663
Load Profiles, 665
Overloads, 666
Load Leveling, 667
Relaxing MRP Assumptions, 667
Enterprise Resource Planning (ERP), 668
ERP Modules, 670
Finance/Accounting, 670
Sales/Marketing, 670
Enterprise Resource Planning at Cybex, 671
Production/ Materials Management, 671
Human Resources, 671
ERP Implementation, 672
Best-of-Breed at Best Buy, 673
Analyze Business Processes, 673
Choose Modules to Implement, 674
Align Level of Sophistication, 674
Finalize Delivery and Access, 674
Operational Excellence at Nike, 675
Link with External Partners, 675
Customer Relationship Management (CRM), 675
Supply Chain Management (SCM), 676
Product Lifecycle Management (PLM), 676
Connectivity and Integration, 676
Summary, 677
Summary of Key Terms, 678
Questions, 678
Solved Problem, 679
Problems, 680
Case Problem 15.1—Hosuki, 684
References, 685
16. Lean Systems, 687
Basic Elements of Lean Production, 689
Flexible Resources, 690
Cellular Layouts, 691
The Pull System, 692
Lean Service at Jefferson Pilot, 693
Kanbans, 694
Small Lots, 697
Quick Setups, 698
Uniform Production Levels, 700
Quality at the Source, 702
Visual Control, 702
Kaizen, 702
Jidoka, 704
Total Productive Maintenance, 704
Supplier Networks, 705
The Benefits of Lean Production, 706
As You Like It, 707
Implementing Lean Production, 708
TPS, A Learning Organization, 708
Drawbacks of Lean Production, 710
Lean Services, 710
Lean Retailing, 711
Lean Banking, 711
Lean Health Care, 711
Lean Retailing at Blockbuster, 712
Leaning the Supply Chain, 713
Lean Six Sigma, 713
Lean and the Environment, 713
Xerox is Back, Thanks to Lean Six Sigma, 714
Lean Consumption, 714
Summary, 715
Summary of Key Formulas, 715
Summary of Key Terms, 715
Questions, 716
Problems, 717
Case Problem 16.1—The Blitz is On, 718
Case Problem 16.2—Where’s My Cart?, 718
References, 720
17. Scheduling, 722
Objectives in Scheduling, 724
Loading, 724
The Assignment Method of Loading, 725
Sequencing, 727
Sequencing Jobs through One Process, 728
Sequencing Jobs through Two Serial Processes, 730
Guidelines for Selecting a Sequencing Rule, 732
Patient Scheduling, 734
Monitoring, 734
Gantt Charts, 735
Input/Output Control, 735
Advanced Planning and Scheduling Systems, 738
When Good Genes Make Good Schedules, 740
Theory of Constraints, 740
Drum-Buffer-Rope, 741
Process vs. Transfer Batch Sizes, 741
Employee Scheduling, 743
Automated Scheduling Systems, 745
Summary, 745
Summary of Key Formulas, 746
Summary of Key Terms, 746
Solved Problems, 746
Questions, 747
Problems, 748
Case Problem 17.1—From a Different Perspective, 751
References, 752
Appendix A—Normal Curve Areas, 755
Solutions to Selected Odd-Numbered Problems, 756
Index, 765
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