Thư viện tri thức trực tuyến
Kho tài liệu với 50,000+ tài liệu học thuật
© 2023 Siêu thị PDF - Kho tài liệu học thuật hàng đầu Việt Nam
Operation management
Nội dung xem thử
Mô tả chi tiết
This page intentionally left blank
E1FFIRS01.qxd 8/5/10 11:37 AM Page i
E1FFIRS01.qxd 8/5/10 11:37 AM Page ii
Operations
Management
Creating Value Along the Supply Chain
JOHN WILEY & SONS, INC.
Bernard W. Taylor III
R. B. Pamplin Professor
Virginia Polytechnic Institute and State University
7TH EDITION
Roberta S. Russell
Professor
Virginia Polytechnic Institute and State University
E1FFIRS01.qxd 8/5/10 11:37 AM Page iii
VP & EXECTUIVE PUBLIHSER George Hoffman
EXECUTIVE EDITOR Lise Johnson
ASSISTANT EDITOR Sarah Vernon
PRODUCTION SERVICES MANAGER Dorothy Sinclair
PRODUCTION EDITOR Anna Melhorn
EXECUTIVE MARKETING MANAGER Karolina Zarychta
CREATIVE DIRECTOR Harry Nolan
PRODUCTION MANAGEMENT SERVICES Elm Street Publishing Services
PHOTO EDITOR Sarah Wilkin, Hilary Newman
SENIOR EDITORAL ASSISTANT Chelsea Theis
MEDIA EDITOR Elena Santa Maria
CENTER COVER PHOTO: © Brigitte Wegner/Getty Images, Inc.
BOTTOM INSET PHOTOS (left to right): © Norman Chan/iStockphoto; © Yaiza Fernandex
Garcia/iStockphoto; © Julian Nieman/Alamy;
© James L. Stanfield/National Geographic/Getty
Images, Inc; ©GoGo Images Corporation/Alamy
COVER AND INTERIOR DESIGN James O’Shea
This book was set in Times by Thomson Digital and printed and bound by Courier/Kendallville.
The cover was printed by Courier/Kendallville.
This book is printed on acid free paper.
Copyright © 2011 John Wiley and Sons, Inc. All rights reserved. No part of this publication, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or
otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either
the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to
the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com.
Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons,
Inc., 111 River Street, Hoboken, NJ 07030-5774, (201) 748-6011. Fax (201) 748-6008, website http://www.wiley.com/
go/permissions.
“Evaluation copies are provided to qualified academics and professionals for review purposes only, for use in their
courses during the next academic year. These copies are licensed and may not be sold or transferred to a third party.
Upon completion of the review period, please return the evaluation copy to Wiley. Return instructions and a free of
charge return shipping label are available at www.wiley.com/ go/returnlabel. Outside of the United States, please
contact your local representative.”
ISBN-13 9780470525906
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
To my mother, Margaret Snead, with appreciation
for your love and support.
To my mother, Jean V. Taylor,
and in memory of my father, Bernard W. Taylor, Jr.,
with love and appreciation.
Opener Photo Credits
Repeat chocolate chip © Geoffrey Holman/iStockphoto, Chapter 1 © Yin Yang/iStockphoto,
Chapter 2 © ECKEHARD SCHULZ/AP/Wide World Photos, Chapter 3 © H. Mark Weidman Photography/
Alamy, Chapter 4 © Ina Peters/iStockphoto, Chapter 5 © Patrik Urban/Alamy, Chapter 6 © Yaiza Fernandez
Garcia/iStockphoto, Chapter 7 © Lyn Hughes/Corbis, Chapter 8 © “Andersen Ross/Getty Images, Inc.”,
Chapter 9 © John O'Boyle/Star Ledger/Corbis, Chapter 10 © Norman Chan/iStockphoto, Chapter 11 © Jim
West/ Alamy, Chapter 12 © “Spencer Platt/Getty Images, Inc.”, Chapter 13 © Julian Nieman/Alamy,
Chapter 14 © Richard Levine/Alamy, Chapter 15 © H-Gall/iStockphoto, Chapter Opener 16 © mediablitzimages
Limited/Alamy, Chapter 17 © Ei Katsumata/Alamy
E1FFIRS01.qxd 8/5/10 11:37 AM Page iv
Bernard W. Taylor III is the Pamplin Professor of Management Science and Head of the Department of Business Information Technology in the Pamplin College of Business at
Virginia Polytechnic Institute and State University. He received a Ph.D. and an M.B.A. from the University of Georgia
and a B.I.E. from the Georgia Institute of Technology. He is
the author of the book Introduction to Management Science
(10th ed.) and co-author of Management Science (4th ed.),
both published by Prentice Hall. Dr. Taylor has published
over 80 articles in such journals as Operations Research,
Management Science, Decision Sciences, IIE Transactions,
Journal of the Operational Research Society, Computers and
Operations Research, Omega, and the International Journal
of Production Research, among others. His paper in Decision
Sciences (with P. Y. Huang and L. P. Rees) on the Japanese
kanban production system received the Stanley T. Hardy
Award for its contribution to the field of production and operations management. He has served as President of the Decision Sciences Institute (DSI) as well as Program Chair,
Council Member, Vice President, Treasurer, and as the Editor
of Decision Line, the newsletter of DSI. He is a Fellow of
DSI and a recipient of their Distinguished Service Award. He
is a former President, Vice-President, and Program Chair of
the Southeast Decision Sciences Institute and a recipient of
their Distinguished Service Award. He teaches management
science and production and operations management courses
at both the undergraduate and graduate level. He has received
the University Certificate of Teaching Excellence on four
occasions, the Pamplin College of Business Certificate of
Teaching Excellence Award, and the Pamplin College of
Business Ph.D. Teaching Excellence Award at Virginia Tech.
Roberta S. Russell is a Professor of Business Information
Technology in the Pamplin College of Business at Virginia
Polytechnic Institute and State University. She received a
Ph.D. from Virginia Polytechnic Institute and State University, an M.B.A. from Old Dominion University, and a B.S.
degree from Virginia Polytechnic Institute and State University. Dr. Russell’s primary research and teaching interests are
in the areas of operations and supply chain management, service operations, scheduling, and quality. She has published
in Decision Sciences, IIE Transactions, International Journal
of Production Research, Journal of Operations Management,
IEEE Transactions, Annals of Operations Research, Computers and Operations Research, and others. She is also coauthor of the Prentice Hall book Service Management and
Operations. Dr. Russell is a member of DSI, ASQ, POMS,
and IIE and a certified fellow of APICS. She is past Vice
President of POMS, past President of the Southwest Virginia
Chapter of APICS and has held numerous offices in Southeast DSI. She has received the Pamplin College of Business
Certificate of Teaching Excellence, the University Certificate
of Teaching Excellence, and the MBA Association’s Outstanding Professor Award. She serves on the Education and
Research Foundation Board of APICS, and is a certified supply chain management professional (CSCMP). Her consulting experience with IBM, AT&T, Dupont, Courtaulds, Xaloy,
Northrup Grumman Shipbuilding and others brings a practical perspective into the classroom.
About the Authors
Bernard W. Taylor III and Roberta S. Russell
E1FFIRS01.qxd 8/5/10 11:37 AM Page v
PART ONE: Operations Management 1
1. Introduction to Operations and Supply Chain Management 1
S1. Operational Decision-Making Tools: Decision Analysis 33
2. Quality Management 54
3. Statistical Process Control 108
S3. Operational Decision-Making Tools: Acceptance Sampling 148
4. Product Design 156
5. Service Design 189
6. Processes and Technology 226
7. Capacity and Facilities Design 257
S7. Operational Decision-Making Tools: Facility Location Models 297
8. Human Resources 315
S8. Operational Decision-Making Tools: Work Measurement 348
9. Project Management 366
PART TWO: Supply Chain Management 420
10. Supply Chain Management Strategy and Design 420
11. Global Supply Chain Procurement and Distribution 450
S11. Operational Decison-Making Tools: Transportation
and Transshipment Models 475
12. Forecasting 495
13. Inventory Management 553
S13. Operational Decision-Making Tools: Simulation 590
14. Sales and Operations Planning 607
S14. Operational Decision-Making Tools: Linear Programming 645
15. Resource Planning 678
16. Lean Systems 720
17. Scheduling 755
APPENDIX A—Normal Curve Areas 789
SOLUTIONS TO SELECTED ODD-NUMBERED PROBLEMS 790
INDEX 798
Brief Contents
E1FTOC01.qxd 8/5/10 2:30 PM Page vi
Decision Making With Probabilities 38
Expected Value of Perfect Information 38
Sequential Decision Trees 39
Summary 41
Summary of Key Formulas 42
Summary of Key Terms 42
Solved Problems 42
Problems 42
Case Problem S1.1–Whither an MBA at Strutledge? 51
Case Problem S1.2–Transformer Replacement at
Mountain States Electric Service 51
Case Problem S1.3–Evaluating Projects at Nexcom
Systems 52
References 53
2. Quality Management 54
■ Quality Management at Mars 54
What Is Quality? 55
Quality from the Customer’s Perspective 56
Dimensions of Quality for Manufactured Products 56
Dimensions of Quality for Services 56
Quality from the Producer’s Perspective 58
A Final Perspective on Quality 59
Quality Management System 59
The Evolution of Quality Management 59
■ Applying Deming’s PDCA Cycle in Baldrige
Award-Winning Schools and Hospitals 62
Quality Tools 62
Process Flowcharts 64
Cause-and-Effect Diagrams 64
Checksheets and Histograms 65
Pareto Analysis 65
Scatter Diagrams 66
Process Control Charts and Statistical Quality Control 67
TQM and QMS 67
The Focus of Quality Management—Customers 68
Quality Management in the Supply Chain 68
Measuring Customer Satisfaction 69
■ Measuring Customer Satisfaction with
“Voice of the Customer (VoC)” at Two
Baldrige Award Winners 70
The Role of Employees in Quality Improvement 70
Kaizen and Continuous Improvement 71
Quality Circles 72
Process Improvement Teams 72
■ Customer Focus and Employee Empowerment
in a Baldrige Award-Winning City 73
Quality in Services 73
PART ONE:
OPERATIONS MANAGEMENT 1
1. Introduction to Operations and
Supply Chain Management 1
■ Operations and Supply Chain Management
for Chocolate 1
■ What Do Operations and Supply Chain
Managers Do? 3
The Operations Function 2
■ OM Dialogue: Mark Jackson, Marketing Manager 6
The Evolution of Operations and Supply Chain Management 6
Globalization 9
The China Factor 10
■ The Balancing Act at New Balance 12
India, The World’s Service Provider 13
Productivity and Competitiveness 14
Strategy and Operations 17
Primary Task 17
Core Competencies 18
Order Winners and Order Qualifiers 18
Positioning the Firm 19
Competing on Cost 19
Competing on Speed 19
■ Trader Joe’s Unique Strategy 20
Competing on Quality 21
Competing on Flexibility 21
Strategy Deployment 21
Policy Deployment 21
Balanced Scorecard 23
Operations Strategy 25
Organization of this Text 25
Learning Objectives of this Course 26
Summary 26
Summary of Key Terms 27
Questions 27
Problems 28
Case Problem 1.1–Visualize This 30
Case Problem 1.2–Whither an MBA at Strutledge? 30
Case Problem 1.3–Weighing Options at the Weight Club 31
References 31
1.
SUPPLEMENT
Operational Decision-Making Tools:
Decision Analysis 33
Decision Analysis With and Without Probabilities 33
Decision Making Without Probabilities 34
Decision Analysis With Excel 36
Decision Analysis With OM Tools 37
Contents
E1FTOC01.qxd 8/5/10 2:30 PM Page vii
viii Contents
SPC Applied to Services 111
Where to Use Control Charts 112
Control Charts 112
Control Charts for Attributes 113
p-Chart 114
■ Using Control Charts for Improving
Health-Care Quality 116
c-Chart 117
Control Charts for Variables 119
Mean (x
–) Chart 119
Range (R-) Chart 122
Using x
–- and R- Charts Together 123
Control Chart Patterns 124
Sample Size Determination 125
SPC with Excel and OM Tools 126
Process Capability 127
Process Capability Measures 130
■ Design Tolerances at Harley-Davidson
Company 131
Process Capability with Excel and OM Tools 132
Summary 133
Summary of Key Formulas 133
Summary of Key Terms 133
Solved Problems 134
Questions 135
Problems 135
Case Problem 3.1–Quality Control at Rainwater
Brewery 145
Case Problem 3.2–Quality Control at Grass, Unlimited 146
Case Problem 3.3–Improving Service Time at Dave’s
Burgers 147
References 147
3. SUPPLEMENT
Operational Decision-Making Tools:
Acceptance Sampling 148
Single-Sample Attribute Plan 149
Producer’s and Consumer’s Risks 149
The Operating Characteristic Curve 150
Developing a Sampling Plan with OM Tools 151
Average Outgoing Quality 152
Double- and Multiple-Sampling Plans 153
Summary 154
Summary of Key Terms 154
Solved Problem 154
Questions 155
Problems 155
4. Product Design 156
■ Product Design at Mars 156
The Design Process 157
Idea Generation 158
Feasibility Study 159
■ Pixar’s Creativity 160
Rapid Prototyping and Concurrent Design 160
Quality Attributes in Services 74
■ Ritz-Carlton Hotels: Two-Time Baldrige National
Quality Award Winner 75
Six Sigma 76
The Six Sigma Goal—3.4 DPMO 76
■ Motorola’s Six Sigma Quality 77
The Six Sigma Process 78
■ Six Sigma Highlights 78
Improvement Projects 79
The Breakthrough Strategy: DMAIC 79
■ North Shore University Hospital: A Six Sigma
Project Example 79
Black Belts and Green Belts 80
Design for Six Sigma 80
Lean Six Sigma 80
The Bottom Line—Profitability 82
The Cost of Quality 83
The Cost of Achieving Good Quality 84
The Cost of Poor Quality 84
Measuring and Reporting Quality Costs 85
The Quality–Cost Relationship 87
The Effect of Quality Management on Productivity 87
Productivity 87
Measuring Product Yield and Productivity 88
The Quality–Productivity Ratio 90
Quality Awards 91
The Malcolm Baldrige Award 91
Other Awards for Quality 93
■ Baldrige National Quality Award Winners:
What It Takes 93
ISO 9000 94
Standards 94
Certification 95
Implications of ISO 9000 for U.S. Companies 95
■ ISO 9001 Certification at Monarcas Morelia 96
ISO Registrars 97
Summary 98
Summary of Key Formulas 98
Summary of Key Terms 98
Solved Problems 99
Questions 99
Problems 102
Case Problem 2.1–Designing a Quality-Management
Program for the Internet at D4Q 104
Case Problem 2.2–Quality Management at State University 105
Case Problem 2.3–Quality Problems at the Tech Bookstores 105
Case Problem 2.4–Product Yield at Continental Luggage
Company 107
References 107
3. Statistical Process Control 108
■ Statistical Process Control at Mars and
Hershey’s 108
The Basics of Statistical Process Control 109
SPC in Quality Management 110
Quality Measures: Attributes and Variables 110
E1FTOC01.qxd 8/5/10 2:30 PM Page viii
Contents ix
Service Improvement Analysis 207
Solution of the Single-Server Model with Excel 209
Advanced Single-Server Models 209
Multiple-Server Model 210
The Basic Multiple-Server Model 210
Summary 214
Summary of Key Terms 214
Summary of Key Formulas 215
Solved Problems 215
Questions 216
Problems 217
Case Problem 5.1–Streamlining the Refinancing Process 222
Case Problem 5.2–Herding the Patient 223
Case Problem 5.3–The College of Business Copy
Center 223
Case Problem 5.4–Northwoods Backpackers 224
References 225
6. Processes and Technology 226
■ Processes and Technology for Chocolate
Manufacturing 226
Process Planning 228
Outsourcing 228
Process Selection 229
Process Selection with Breakeven Analysis 230
Process Plans 235
Process Analysis 235
Process Flowcharts 236
■ Making Fast Food Faster 238
Process Innovation 241
Steps in Process Innovation 241
■ OM Dialogue: Anastasia Thatcher, Business
Process Manager 244
Technology Decisions 245
Financial Justification of Technology 245
A Technology Primer 246
Summary 249
Summary of Key Terms 249
Summary of Key Formulas 249
Solved Problems 249
Questions 250
Problems 251
Case Problem 6.1–A Manager’s Woes 253
Case Problem 6.2–Wrong Meds, Again! 254
Case Problem 6.3–The DPA Protocol 255
References 255
7. Capacity and Facilities Design 257
■ Capacity and Facilities Design at the
New England Confectionery Company 257
Capacity Planning 258
Facilities 261
Objectives of Facility Layout 261
■ Bank of America’s Towering Achievement in
Green Design 261
Form Design 161
■ Apple’s Design Process 162
Functional Design 163
Reliability 163
Maintainability 164
Usability 165
Production Design 165
Final Design and Process Plans 167
Technology in Design 167
Collaborative Product Design Systems 168
Design Quality Reviews 169
■ Jugaad, Design for the Times 170
Design for Environment 170
Green Sourcing 172
Green Manufacture 172
Green Consumption 173
Recycling and Re-Use 173
Quality Function Deployment 173
■ Nike’s Trash Talking Shoes 174
Design for Robustness 179
Summary 181
Summary of Key Terms 181
Summary of Key Formulas 182
Solved Problems 182
Questions 183
Problems 183
Case Problem 4.1–Greening Product Design 186
Case Problem 4.2–Lean and Mean 187
References 188
5. Service Design 189
■ Service Design at Hershey’s 189
The Service Economy 190
Characteristics of Services 191
The Service Design Process 193
■ Redbox Brings Self-Service to Movie Rentals 193
The Service-Process Matrix 195
Tools for Service Design 196
Service Blueprinting 198
Front Office and Back-Office Activities 199
Servicescapes 199
Quantitative Techniques 199
Waiting Line Analysis for Service Improvement 200
Elements of Waiting Line Analysis 200
Elements of a Waiting Line 200
The Calling Population 200
The Arrival Rate 201
Service Times 202
Queue Discipline and Length 202
Basic Waiting Line Structures 202
Operating Characteristics 204
Traditional Cost Relationships in Waiting Line
Analysis 204
The Psychology of Waiting 205
Waiting Line Models 206
The Basic Single-Server Model 206
E1FTOC01.qxd 8/5/10 2:30 PM Page ix
x Contents
8. Human Resources 315
■ Human Resources at Hershey’s 315
Human Resources and Quality Management 317
The Changing Nature of Human Resources Management 318
The Assembly Line 318
Limitations of Scientific Management 319
Employee Motivation 319
■ Human Resources Management at Baldrige
National Quality Award-Winning Companies 320
Contemporary Trends in Human Resources Management 321
Job Training 321
Cross Training 321
■ Employee Training at Kyphon, Inc., and Triage
Consulting Group 322
Job Enrichment 322
Empowerment 323
Teams 323
■ Reducing Costs by Going Green in the
Workplace 324
Flexible Work Schedules 324
Alternative Workplaces and Telecommuting 324
Temporary and Part-Time Employees 325
■ Telecommuting at Capital One 326
Employee Compensation 326
■ Part-Time Employees at UPS 327
Types of Pay 327
Gainsharing and Profit Sharing 327
Managing Diversity in the Workplace 328
■ English in the Workplace 328
Affirmative Action and Equal Opportunity 329
Diversity Management Programs 329
■ A Commitment to Diversity at UPS and Kodak 330
Global Diversity Issues 331
■ Developing a Skilled Workforce in China 331
Job Design 332
The Elements of Job Design 333
Task Analysis 333
Worker Analysis 333
Environmental Analysis 334
Ergonomics 334
Technology and Automation 334
Job Analysis 335
Process Flowchart 335
Worker-Machine Chart 336
Motion Study 337
Learning Curves 338
Determining Learning Curves with Excel 341
Learning Curves with OM Tools 342
Summary 342
Summary of Key Formulas 342
Summary of Key Terms 343
Solved Problems 343
Questions 343
Problems 344
Case Problem 8.1–Maury Mills 345
References 347
Basic Layouts 262
Process Layouts 262
Product Layouts 264
Fixed-Position Layouts 266
Designing Process Layouts 266
Block Diagramming 266
■ The Health Benefits of Good Layout 267
Relationship Diagramming 269
Computerized Layout Solutions 271
■ Urban Outfitters’ New Distribution Facility 272
Designing Service Layouts 273
Designing Product Layouts 274
Line Balancing 274
Computerized Line Balancing 278
Hybrid Layouts 278
Cellular Layouts 278
Advantages of Cellular Layouts 280
Disadvantages of Cellular Layouts 281
Flexible Manufacturing Systems 282
Mixed-Model Assembly Lines 282
Summary 284
Summary of Key Formulas 285
Summary of Key Terms 285
Solved Problems 286
Questions 287
Problems 287
Case Problem 7.1–Workout Plus 293
Case Problem 7.2–Photo Op–Please Line Up 294
Case Problem 7.3–The Grab ’n Go Café 294
References 296
7. SUPPLEMENT 7
Operational Decision-Making Tools:
Facility Location Models 297
Types of Facilities 297
Site Selection: Where to Locate 298
Global Supply Chain Factors 299
Regional and Community Location Factors in
the United States 299
Location Incentives 300
Geographic Information Systems 301
Location Analysis Techniques 302
Location Factor Rating 302
Location Factor Rating with Excel and OM Tools 303
Center-of-Gravity Technique 304
Center-of-Gravity Technique with Excel and OM Tools 305
Load-Distance Technique 305
Load-Distance Technique with Excel and OM Tools 307
Summary 308
Summary of Key Formulas 308
Summary of Key Terms 308
Solved Problems 309
Questions 309
Problems 310
Case Problem S7.1–Selecting a European Distribution Center
Site for American International Automotive Industries 314
References 314
E1FTOC01.qxd 8/5/10 2:30 PM Page x
Contents xi
Probabilistic Time Estimates 389
■ An Interstate Highway Construction Project
in Virginia 392
CPM/PERT Analysis with OM Tools 393
Probabilistic Network Analysis 393
Microsoft Project 396
PERT Analysis with Microsoft Project 398
■ The Corps of Engineers Hurricane Katrina
New Orleans Restoration Project 399
Project Crashing and Time-Cost Tradeoff 400
Project Crashing 401
The General Relationship of Time and Cost 403
Summary 404
Summary of Key Formulas 405
Summary of Key Terms 405
Solved Problems 406
Questions 407
Problems 408
Case Problem 9.1–The Bloodless Coup Concert 417
Case Problem 9.2–Moore Housing Contractors 418
References 419
PART TWO:
SUPPLY CHAIN MANAGEMENT 420
10. Supply Chain Management Strategy
and Design 420
■ Supply Chain Management Strategy and
Design at Mars 420
Supply Chains 421
Supply Chains for Service Providers 423
Value Chains 425
The Management of Supply Chains 425
Supply Chain Uncertainty and Inventory 425
The Bullwhip Effect 426
Risk Pooling 427
■ Eliminating the Bullwhip Effect at Philips
Electronics 427
“Green” Supply Chains 428
■ Going Green at Walmart 428
Sustainability and Quality Management 429
■ Achieving Sustainability While Reducing
Costs and Increasing Profits 430
Information Technology: A Supply Chain Enabler 431
Electronic Business 431
Electronic Data Interchange 432
■ Strategic Supply Chain Design at 7-Eleven
in Japan and the United States 432
Bar Codes 433
Radio Frequency Identification 433
The Internet 435
■ Supply Chain Management at Gaylord Hotels 436
Build-To-Order (BTO) 437
Supply Chain Integration 437
Collaborative Planning, Forecasting, and
Replenishment 437
8. SUPPLEMENT 8
Operational Decision-Making Tools:
Work Measurement 348
Time Studies 348
Stopwatch Time Study 349
Number of Cycles 353
Elemental Time Files 354
Predetermined Motion Times 354
Work Sampling 356
Summary 358
Summary of Key Formulas 358
Summary of Key Terms 358
Solved Problems 359
Questions 359
Problems 360
Case Problem S8.1–Measuring Faculty Work Activity
at State University 364
References 365
9. Project Management 366
■ Project Management at Mars 366
Project Planning 367
Elements of a Project Plan 369
Project Return 369
The Project Team 370
■ Cross-Cultural Project Teams 370
The Project Manager 371
Scope Statement 371
Work Breakdown Structure 371
Responsibility Assignment Matrix 372
■ Green Projects on the Increase Around the
World 372
Global and Diversity Issues in Project Management 373
■ Project Management Diversity in China 374
Project Scheduling 375
The Gantt Chart 376
Project Control 377
Time Management 377
Cost Management 377
Quality Management 377
Performance Management 377
Communication 378
■ Reconstructing the Pentagon after 9/11 378
Enterprise Project Management 379
CPM/PERT 379
The Project Network 380
AOA Network 380
AON Network 381
■ British Airport Authority’s Terminal 5 Project
at Heathrow Airport 382
The Critical Path 382
Activity Scheduling 383
Activity Slack 386
■ A Couple of Iconic Building Renovation Projects 388
Probabilistic Activity Times 389
E1FTOC01.qxd 8/5/10 2:30 PM Page xi
xii Contents
Questions 473
Case Problem 11.1–Somerset Furniture Company’s
Global Supply Chain–Continued 474
11. SUPPLEMENT 11
Operational Decision-Making Tools:
Transportation and Transshipment
Models 475
The Transportation Model 475
Solution of the Transportation Model with Excel 477
The Transshipment Model 480
Solution of the Transshipment Problem with Excel 481
Summary 482
Summary of Key Terms 482
Solved Problems 482
Problems 483
Case Problem S11.1–Stateline Shipping and Transport
Company 492
Case Problem S11.2–Global Supply Chain Management
at Cantrex Apparel International 493
References 494
12. Forecasting 495
■ Forecasting at Hershey’s 495
The Strategic Role of Forecasting in Supply Chain
Management 496
Supply Chain Management 496
■ Sharing Forecasts at Boeing and Alcoa 498
Quality Management 498
Strategic Planning 499
■ Supply Chain Forecasting at Heineken USA 499
Components of Forecasting Demand 499
Time Frame 499
Demand Behavior 500
Forecasting Methods 501
Forecasting Process 502
■ Forecasting at Dell 503
Time Series Methods 503
Moving Average 504
Weighted Moving Average 506
Exponential Smoothing 507
Adjusted Exponential Smoothing 510
Linear Trend Line 512
Seasonal Adjustments 514
■ The CPFR Process at Bayer Consumer Care
in the EU 516
Forecast Accuracy 517
Mean Absolute Deviation 517
Cumulative Error 519
Forecast Control 520
■ Forecasting Market Demand at NBC 523
Time Series Forecasting Using Excel 524
Forecasting with OM Tools 526
Regression Methods 526
Linear Regression 527
Correlation 529
Supply Chain Management (SCM) Software 438
Measuring Supply Chain Performance 439
Key Performance Indicators 439
■ Apple’s Top-Ranked Supply Chain 441
Process Control 441
SCOR 442
Summary 444
Summary of Key Terms 444
Summary of Key Formulas 444
Solved Problems 444
Questions 445
Problems 447
Case Problem 10.1–Somerset Furniture Company’s
Global Supply Chain 448
References 449
11. Global Supply Chain Procurement
and Distribution 450
■ Global Supply Chain Procurement and
Distribution at Hershey’s 450
Procurement 451
Outsourcing 452
E-Procurement 453
E-Marketplaces 454
■ Virtual Manufacturing at Palm Inc. 454
Reverse Auctions 454
Distribution 455
Speed and Quality 455
Internet Companies: Amazon.com 455
■ Achieving Warehouse Efficiency and
Sustainability at Genzyme Corporation 456
Distribution Centers and Warehousing 457
Postponement 457
■ Supply Chain Management at Royal Caribbean 457
Warehouse Management Systems 458
Vendor-Managed Inventory 459
■ Vendor-Managed Inventory (VMI) at Dell 459
Collaborative Logistics 459
Distribution Outsourcing 460
Transportation 460
■ Supply Chain Operations at Food Distributor
Sysco Corporation 462
Internet Transportation Exchanges 463
The Global Supply Chain 463
Obstacles to Global Supply Chain Management 464
Duties, Tariffs, and Global Trading Groups 464
Landed Cost 465
Web-Based International Trade Logistics Systems 465
■ Achieving Global Sustainability at HP in
China 467
Recent Trends in Globalization for U.S. Companies 468
China’s Increasing Role in the Global Supply Chain 468
■ Brazil as a Potential Near Shore Supplier for
the United States 470
Reverse Globalization 470
■ Reverse Globalization at K’NEX 472
Effects of Terrorism on Global Supply Chains 472
Summary of Key Terms 473
E1FTOC01.qxd 8/5/10 2:30 PM Page xii
Contents xiii
Solved Problems 580
Questions 582
Problems 582
Case Problem 13.1–The Instant Paper Clip Office
Supply Company 587
Case Problem 13.2–The Texas Gladiators Apparel
Store Case 587
Problem 13.3–Pharr Foods Company 588
References 589
13. SUPPLEMENT 13
Operational Decision-Making Tools:
Simulation 590
Monte Carlo Simulation 590
Computer Simulation with Excel 594
Decision Making with Simulation 596
Areas of Simulation Application 598
Waiting Lines/Service 599
Inventory Management 599
Production and Manufacturing Systems 599
Capital Investment and Budgeting 599
Logistics 599
Service Operations 599
Environmental and Resource Analysis 599
Summary 600
Summary of Key Terms 600
Solved Problems 600
Questions 602
Problems 602
References 606
14. Sales and Operations Planning 607
■ Sales and Operations Planning at
Hershey’s 607
The Sales and Operations Planning Process 608
■ Disney’s Magic Numbers 611
Strategies for Adjusting Capacity 612
Level Production 612
Chase Demand 612
Peak Demand 613
Overtime and Undertime 613
Subcontracting 613
Part-Time Workers 613
■ Meeting Demand for Panettones 613
Backlogs, Backordering, and Lost Sales 614
Strategies for Managing Demand 614
■ The Bullwhip Effect in a Slowdown 615
Quantitative Techniques for Aggregate Planning 616
Pure Strategies 616
General Linear Programming Model 618
Mixed Strategies 619
The Transportation Method 623
Other Quantitative Techniques 623
The Hierarchical Nature of Planning 626
Collaborative Planning 628
Available-to-Promise 628
Regression Analysis with Excel 529
Multiple Regression with Excel 530
■ Forecasting Airport Security Gate Arrivals at
the Transportation Security Administration 533
Summary 534
Summary of Key Formulas 534
Summary of Key Terms 535
Solved Problems 535
Questions 537
Problems 538
Case Problem 12.1–Forecasting at State University 549
Case Problem 12.2–The University Bookstore Student
Computer Purchase Program 549
Case Problem 12.3–Cascades Swim Club 550
Case problem 12.4–Forecasting Passenger Arrivals at the
Gotham International Airport 551
References 552
13. Inventory Management 553
■ Inventory Management at Mars 553
The Role of Inventory in Supply Chain Management 555
The Effects of Information Technology on Inventory
Management 556
Inventory and Quality Management in the Supply Chain 556
The Elements of Inventory Management 557
Demand 557
Inventory Costs 557
Inventory Control Systems 559
Continuous Inventory Systems 559
Periodic Inventory Systems 560
The ABC Classification System 560
■ Inventory Management at Dell 561
■ Determining Supply Chain Strategy
by Evaluating Inventory Costs at
Hewlett-Packard 563
Economic Order Quantity Models 564
The Basic EOQ Model 564
The Production Quantity Model 567
Solution of EOQ Models with Excel 569
Solution of EOQ Models with OM Tools 570
Quantity Discounts 570
Quantity Discounts with Constant Carrying Cost 571
Quantity Discount Model Solution with Excel 573
Reorder Point 573
Safety Stocks 574
Service Level 574
Reorder Point with Variable Demand 575
Determining the Reorder Point with Excel 576
■ Establishing Inventory Safety Stocks at
Kellogg’s 577
Order Quantity for a Periodic Inventory System 577
Order Quantity with Variable Demand 578
Determining the Order Quantity for the Fixed-Period
Model with Excel 578
Summary 579
Summary of Key Formulas 580
Summary of Key Terms 580
E1FTOC01.qxd 8/5/10 2:30 PM Page xiii