Operations Management - International Student Edition

Ray R. Venkataraman is Professor of Project and Supply Chain Management at the Sam and Irene Black School of Business at Penn State Erie, The Behrend College. He has a PhD in Management Science from Illinois Institute of Technology and has over 30 years of teaching experience. He has taught a variety of courses, including Operations Planning and Control, Supply Chain Management, Operations Strategy, Purchasing, Business Statistics, and Project Management. He has received the Ideal Industries Award for Excellence in Business Teaching at Northern Illinois University. He currently teaches online courses in Planning and Resource Management in Projects, and Cost and Value Management in Projects at the graduate level. Dr. Venkataraman has several research publications in top-tier operations management journals. He has published in journals such as International Journal of Production Research, Omega, International Journal of Operations and Production Management, Production and Operations Management, Production and Inventory Management, Production Planning and Control, The International Journal of Quality and Reliability Management, and Interfaces. In addition, he has coauthored books titled Cost and Value Management in Projects and Decision Making in Project Management. His current research interests are in the area of sustainability integration in project and supply chain management. As an assistant manager with a multinational bank in India, Dr. Venkataraman has several years of industry experience in the financial services industry. He has served on the editorial review boards of the Production and Operations Management and IEEE Transactions on Engineering Management journals.Dr. Jeffrey K. Pinto is the Andrew Morrow and Elizabeth Lee Black Chair in the Management of Technology in the Sam and Irene Black School of Business at Penn State Erie, The Behrend College. Dr. Pinto held previous academic appointments at the University of Cincinnati and the University of Maine. In 2016, he was a visiting scholar at the Kemmy School of Business, University of Limerick, Ireland. He is the lead faculty member for Penn State’s Master of Project Management program. The author or editor of 26 books and over 150 scientific papers that have appeared in a variety of academic and practitioner journals, books, conference proceedings, video lessons, and technical reports, Dr. Pinto’s work has been translated into nine languages. He served as editor of the Project Management Journal from 1990 to 1996, is past-department editor for R&D and engineering projects with IEEE Transactions on Engineering Management, and serves on several other journal editorial boards. With over 25 years’ experience in the field of project management, Dr. Pinto is a two-time recipient of the Distinguished Contribution Award from the Project Management Institute for outstanding service to the project management profession. He received PMI’s Research Achievement Award in 2009 for outstanding contributions to project management research. In 2017, he received the Research Achievement Award from the International Project Management Association for shaping the discipline of project management through his work.Dr. Pinto has taught and consulted widely in the United States and Europe on a variety of topics, including project management, supply chain management, new product development, information system implementation, organization development, leadership, and conflict resolution.

• PrefaceAcknowledgmentsAbout the AuthorsPART I: INTRODUCTIONChapter 1: Introduction to Managing Global Operations and Supply Chains1.1 Supply Chains and Operations Management in the Global Economy1.2 What Does Operations Management Entail?1.3 What Does Supply Chain Management Entail?1.4 An Integrated Perspective on Operations and Supply Chain Management1.5 The Evolution of Operations and Supply Chain Management1.6 Current and Emerging Issues in Operations and Supply Chain Management1.7 Road Map: How This Text Is OrganizedChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 1.1 Multinational Companies and China: Investing for the Long TermCase Study 1.2 Nintendo’s Wii and Wii U: Absence Makes the Heart Grow FonderVideo CaseCritical Thinking ExercisePART II: STRATEGIC DECISIONSChapter 2: Operations and Supply Chain Strategies2.1 Levels of Strategic Planning2.2 Formulating and Evaluating Operations Strategies2.3 Formulating and Evaluating Strategies for Service Organizations2.4 Measuring Productivity as Part of Strategic Planning2.5 Strategies for Supply Chains2.6 Global Strategies2.7 Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 2.1 Supply Chain Strategies and Disaster PlanningVideo CaseCritical Thinking ExerciseChapter 3: Project Management3.1 Projects, Project Teams, and Measuring Success3.2 Project Life Cycles3.3 Conceptualizing and Planning Projects3.4 Scheduling Projects3.5 Supply Chains for Projects3.6 Executing, Evaluating, and Terminating Projects3.7 Sustainability Issues3.8 Global ProjectsChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 3.1 Project Management in the Movie BusinessVideo CaseCritical Thinking ExerciseSupplement for Chapter 3: Project Management3S.1 Determining the Probability of a Project Being Completed on Time3S.2 Calculating the Time-Cost Trade-Offs of Crashing a Project3S.3 Calculating a Project’s Earned ValueSupplement SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCritical Thinking ExerciseChapter 4: Product and Service Innovations4.1 Why Companies Develop New Products and Services4.2 How New Products Are Developed4.3 New Product Development Concepts and Strategies4.4 Using Technology to Develop New Products4.5 Global Product Development4.6 New Product Development Issues for Supply Chains4.7 How Services Are Designed4.8 Legal, Ethical, and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 4.1 Redesigning for Efficiency: The Chevrolet MalibuVideo CaseCritical Thinking ExerciseSupplement for Chapter 4: Reliability4S.1 Understanding Reliability4S.2 Availability and MaintainabilitySupplement SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsChapter 5: Managing for Quality5.1 Defining Quality5.2 The Benefits and Costs of Managing Quality5.3 The Evolution of Quality Management and Its Pioneers5.4 Major Quality Management Initiatives5.5 Quality Management Tools and Techniques5.6 Managing Quality for Supply Chains5.7 Global Quality Management5.8 Legal, Ethical, and Sustainability Issues,Chapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 5.1 Pfizer Fixes Problems With Its Cleaning ProcessesCase Study 5.2 Partnering to Improve QualityCase Study 5.3 3M: Finding the Delicate Balance Between Six Sigma and InnovationCase Study 5.4 Van Halen, Brown M&Ms, and Quality ControlVideo CaseCritical Thinking ExerciseChapter 6: Quality Improvement and Control Tools6.1 Quality Control Versus Quality Assurance6.2 Quality Appraisal Tools6.3 Quality Defect Prevention Tools6.4 Quality Design ToolsChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 6.1 J.D. Power Automobile Surveys: What Does “Quality” Mean, Anyway?Video CaseCritical Thinking ExercisesChapter 7: Capacity Planning7.1 Capacity Planning7.2 Service Capacity Planning7.3 Capacity Planning for Supply Chains7.4 Ethical and Sustainability Issues7.5 Global Capacity ManagementChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 7.1 Kirwain’s Capacity Planning ChallengeVideo CasesCritical Thinking ExercisesChapter 8: Supply Chain Design and Location Planning8.1 Supply Chain Design and Facility Location Decisions8.2 Phases in the Supply Chain Design and Location Decision-Making Process8.3 Analytical Methods for Evaluating Locations8.4 Ethical and Sustainability Issues8.5 Global Location PlanningChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 8.1 Countering the CounterfeitersCase Study 8.2 Alpharetta ToolsVideo CaseCritical Thinking ExerciseChapter 9: Process Design and Layout Planning9.1 Designing, Selecting, and Redesigning Manufacturing Processes9.2 Designing Service Processes9.3 Designing Processes for Supply Chains9.4 Global Process Design9.5 Layout Planning9.6 Legal, Ethical, and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 9.1 Challenges of Redesigning a Plant LayoutVideo CaseCritical Thinking ExerciseSupplement for Chapter 9: Tools for Analyzing, Designing, and Selecting Processes and Layouts9S.1 Process Selection, Design, and Analysis Tools9S.2 Layout Analysis Tools and TechniquesSupplement SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCritical Thinking ExercisesPART III: INTEGRATIVE DECISIONSChapter 10: Supplier Management10.1 Supplier Management and Its Goals10.2 The Supplier Management Process10.3 Managing Service Providers10.4 Global Supplier Management10.5 Legal, Ethical, and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study 10.1 The BoeingVideo CasesCritical Thinking ExerciseChapter 11: Logistics Management11.1 Integrated Logistics Management11.2 Order Fulfillment11.3 Transportation Management11.4 Packaging11.5 Materials Handling11.6 Warehousing Management11.7 Inventory Management11.8 Facilities Network Design,11.9 Global Logistics11.10 Logistics Outsourcing11.11 Logistics in the Service Sector11.12 Ethical and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 11.1 How Sustainable Logistics Solutions and Technologies Have Helped Walmart Become More EfficientCase Study 11.2 Third-Party Logistics and the Mistreatment of WorkersVideo CaseCritical Thinking ExercisesChapter 12: Demand Management and Customer Service12.1 Demand Management12.2 Global Demand Management12.3 Services Demand Management12.4 Customer Service and Demand Management12.5 Ethical and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsProblemsCase Study 12.1 McDonald’s Reinvents Itself, AgainCase Study 12.2 Predicting the Future Demand for Rural Health CareVideo CasesCritical Thinking ExercisesChapter 13: Demand Forecasting Methods13.1 Introduction to Forecasting and Its Applications13.2 The Characteristics of Good Forecasts13.3 Qualitative Versus Quantitative Forecasting Methods13.4 Measuring and Monitoring the Accuracy of Forecasting Methods13.5 Monitoring and Controlling Forecasts13.6 Forecasting for Supply Chains13.7 Ethical IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 13.1 Forecasting Ticket Demand for the Super BowlCase Study 13.2 Ethical Forecasting: If You Torture the Numbers Long Enough, They Can Tell You Anything!Video CasesCritical Thinking ExercisesPART IV: TACTICAL DECISIONSChapter 14: Lean Operations and Supply Chains14.1 Introduction to Lean Operations14.2 The Philosophy of Lean Systems14.3 Elements of Lean Systems14.4 Lean Services14.5 Lean Supply Chains14.6 Lean Global Supply Chains14.7 Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study 14.1 Lean Sustainable Supply Chains at UnileverCase Study 14.2 TAL Apparel and JCPenneyCritical Thinking ExerciseAppendix 14.1: Value Stream Mapping SymbolsAppendix 14.2: Steps for Developing a Value Stream MapChapter 15: Inventory Management15.1 Types of Inventory15.2 Inventory Costs15.3 Inventory Considerations for Supply Chains15.4 Inventory Management Measures15.5 Key Features of Effective Inventory Management Systems15.6 Uncertainty in Supply Chain Inventories: The Bullwhip Effect15.7 Ethical and Sustainability Issues15.8 Global Inventory Management15.9 Service Sector Inventory ManagementChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study 15.1 Inventory Pressures Cause Tuesday Morning to Abandon e-CommerceCase Study 15.2 Inventory Management in the Age of the Online ShopperVideo CaseCritical Thinking ExercisesChapter 16: Inventory Control Models16.1 How Much to Order: Continuous Review Systems16.2 Economic Production Quantity (EPQ) Model16.3 EOQ Model with Quantity Discounts16.4 When to Order: Reorder Point for Continuous Review Systems (EOQ Model)16.5 How Much to Order: Periodic Review Systems16.6 How Much to Order: Single-Period Inventory SystemsChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 16.1 When Your Customers Steer You Wrong: Walmart’s Project Impact DisasterVideo CaseCritical Thinking ExerciseChapter 17: Sales and Operations Planning17.1 The Basics of Sales and Operations Planning17.2 Benefits of Sales and Operations Planning17.3 Framework of the Sales and Operations Planning Process17.4 Options for Influencing Demand and Supply in Sales and Operations Planning17.5 Sales and Operations Planning Strategies17.6 Methods for Sales and Operations Planning17.7 Sales and Operations Planning for Supply Chains17.8 Sales and Operations Planning in Service Industries17.9 Sustainable S&OP: Sales Carbon Operations Planning (SCOP)17.10 Ethical IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study 17.1: Coordinating Sales and Operations Planning for the Next Big Thing: The Case of the Sony PS4 LaunchVideo CaseCritical Thinking ExercisePART V: OPERATIONAL DECISIONSChapter 18: Master Scheduling and Material Requirements Planning18.1 Master Scheduling18.2 Material Requirements Planning18.3 Ethical and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 18.1 Bringing Order to a Chaotic RestaurantVideo CaseCritical Thinking ExerciseSupplement for Chapter 18: Capacity Requirements Planning, MRP II, ERP, and DRP18S.1 Capacity Requirements Planning (CRP)18S.2 Manufacturing Resource Planning (MRP II)—An Extension of MRP18S.3 Enterprise Resource Planning (ERP)18S.4 Impact of MRP, MRP II, and ERP on Supply Chains18S.5 Distribution Requirements Planning (DRP)18S.6 Sustainability IssuesSupplement SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study 18S.1 Thinking Outside the Box: Enterprise Training at General MillsCritical Thinking ExerciseChapter 19: Detailed Scheduling19.1 What Detailed Scheduling Is19.2 Types of Scheduling for Manufacturers19.3 Why Scheduling Is Complex19.4 Scheduling in the Service Sector19.5 Scheduling for Supply Chains19.6 Ethical and Sustainability IssuesChapter SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study 19.1 Telling Umpires Where to Go!Video CaseCritical Thinking ExercisesPART VI: QUANTITATIVE MODULESModule A: Linear ProgrammingIntroductionA.1 Features of a Linear Programming (LP) ProblemA.2 Solving Linear Programming Problems Using ExcelA.3 Sensitivity AnalysisA.4 Additional Linear Programming ModelsModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study A.1 Happy Hour, Happy ProfitsModule B: The Transportation ModelsB.1 Formulating and Solving the Transportation ProblemB.2 Additional Issues in Transportation ModelingModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study B.1 Plant Location for Tru-Blade Ski CompanyModule C: Waiting Line ModelsC.1 Introduction to Waiting Line ModelsC.2 Queueing ModelsModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study C.1 The Psychology of Waiting in LinesQuestions for DiscussionModule D: SimulationD.1 Introduction to SimulationD.2 Monte Carlo SimulationModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemProblemsCase Study D.1 Staying Ahead of the Demand for Ice CreamModule E: Learning CurvesE.1 What Are Learning Curves?E.2 Applications of Learning CurvesE.3 Approaches to Solving Learning Curve ProblemsE.4 Learning Curves in Cost EstimationE.5 Limitations of Learning CurvesModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study E.1 Estimating the Cost of a Drilling PlatformModule F: Decision-Making ToolsF.1 Using a Systematic Decision-Making ProcessF.2 Elements in the Decision-Making ProcessF.3 Categorizing DecisionsF.4 Techniques for Making Decisions Under Certainty, Uncertainty, and RiskF.5 Techniques for Making Sequential DecisionsModule SummaryKey TermsDiscussion and Review QuestionsSolved ProblemsProblemsCase Study F.1 Gerber Products Company: The ProblemCase Study F.2 Gerber Products Company: The SolutionAppendix A: TablesAppendix B: Answers to Select ProblemsGlossaryNotesCompany IndexSubject Index