Operations Management, Fourteenth Edition
By William J. Stevenson
Contents:
Preface vii
1 Introduction to Operations
Management 2
Introduction 4
Production of Goods Versus Providing Services 8
Why Learn About Operations Management? 10
Career Opportunities and Professional Societies 12
Process Management 13
The Scope of Operations Management 14
Reading:
Why Manufacturing Matters 17
Operations Management and Decision Making 18
Reading: Analytics 20
The Historical Evolution of Operations Management 21
Operations Today 24
Reading: Agility Creates a Competitive Edge 26
Key Issues for Today’s Business Operations 27
Readings: Sustainable Kisses 28
Diet and the Environment: Vegetarian Nonvegetarian 29
Operations Tour: Wegmans Food Markets 33
Summary 36
Key Points 36
Key Terms 36
Discussion and Review Questions 36
Taking Stock 37
Critical Thinking Exercises 37
Case: Hazel 38
Selected Bibliography and Further Readings 38
Problem-Solving Guide 39
2 Competitiveness, Strategy, and Productivity 40
Introduction 42
Competitiveness 42
Mission and Strategies 44
Readings: Amazon Ranks High in Customer Service 45
Low Inventory Can Increase Agility 50
Operations Strategy 51
Implications of Organization Strategy for Operations Management 54
Transforming Strategy into Action: The Balanced Scorecard 54
Productivity 56
Readings: Why Productivity Matters 59
Dutch Tomato Growers’ Productivity Advantage 60
Productivity Improvement 62
Summary 62
Key Points 63
Key Terms 63
Solved Problems 63
Discussion and Review Questions 64
Taking Stock 64
Critical Thinking Exercises 65
Problems 65
Cases: Home-Style Cookies 67
Hazel Revisited 68
“Your Garden Gloves” 69
Girlfriend Collective 69
Operations Tour: The U.S. Postal Service 70
Selected Bibliography and Further Readings 73
3 Forecasting 74
Introduction 76
Features Common to All Forecasts 78
Elements of a Good Forecast 78
Forecasting and the Supply Chain 79
Steps in the Forecasting Process 79
Approaches to Forecasting 80
Qualitative Forecasts 80
Forecasts Based on Time-Series Data 82
Associative Forecasting Techniques 98
Reading: Lilacs 104
Forecast Accuracy 104
Reading: High Forecasts Can be Bad News 106
Monitoring Forecast Error 107
Choosing a Forecasting Technique 111
Using Forecast Information 112
Computer Software in Forecasting 113
Operations Strategy 113
Reading: Gazing at the Crystal Ball 114
Summary 115
Key Points 117
Key Terms 117
Solved Problems 118
Discussion and Review Questions 124
Taking Stock 125
Critical Thinking Exercises 125
Problems 125
Cases: M&L Manufacturing 136
Highline Financial Services, Ltd. 137
Selected Bibliography and Further Readings 137
4 Product and Service Design 138
Reading: Design as a Business Strategy 140
Introduction 140
Reading: Dutch Boy Brushes Up Its Paints 142
Idea Generation 142
Reading: Vlasic’s Big Pickle Slices 143
Legal and Ethical Considerations 144
Human Factors 145
Cultural Factors 145
Reading: Green Tea Ice Cream? Kale Soup? 146
Global Product and Service Design 146
Environmental Factors: Sustainability 146
Readings: Kraft Foods’ Recipe for Sustainability 148
China Clamps Down on Recyclables 149
Recycle City: Maria’s Market 150
Other Design Considerations 151
Readings:
Lego A/S in the Pink 152
Fast-Food Chains Adopt Mass Customization 155
Phases in Product Design and Development 162
Designing for Production 163
Service Design 165
Reading: The Challenges of Managing Services 169
Operations Strategy 170
Summary 170
Key Points 171
Key Terms 171
Discussion and Review Questions 171
Taking Stock 172
Critical Thinking Exercises 172
Problems 172
Operations Tour: High Acres Landfill 174
Selected Bibliography and Further Readings 174
SUPPLEMENT TO CHAPTER 4: Reliability 176
5 Strategic Capacity Planning for Products and Services 190
Introduction 191
Reading:
Excess Capacity Can Be Bad News! 192
Capacity Decisions Are Strategic 193
Defining and Measuring Capacity 194
Determinants of Effective Capacity 196
Strategy Formulation 197
Forecasting Capacity Requirements 198
Additional Challenges of Planning Service Capacity 200
Do It In-House or Outsource It? 201
Reading: My Compliments to the Chef, Er, Buyer 202
Developing Capacity Strategies 202
Constraint Management 207
Evaluating Alternatives 207
Operations Strategy 213
Summary 213
Key Points 214
Key Terms 214
Solved Problems 214
Discussion and Review Questions 216
Taking Stock 217
Critical Thinking Exercises 217
Problems 217
Case: Outsourcing of Hospital Services 221
Selected Bibliography and Further Readings 221
SUPPLEMENT TO CHAPTER 5: Decision Theory 222
6 Process Selection and Facility Layout 244
Introduction 246
Process Selection 246
Operations Tour:
Morton Salt 250
Technology 252
Readings:
Foxconn Shifts Its Focus to Automation 254
Zipline Drones Save Lives in Rwanda 258
Self-Driving Vehicles 259
Process Strategy 260
Strategic Resource Organization: Facilities
Layout 260
Reading:
A Safe Hospital Room of the Future 269
Designing Product Layouts: Line Balancing 272
Reading:
BMW’s Strategy: Flexibility 280
Designing Process Layouts 281
Summary 285
Key Points 286
Key Terms 286
Solved Problems 286
Discussion and Review Questions 290
Taking Stock 291
Critical Thinking Exercises 291
Problems 291
Selected Bibliography and Further Readings 298
7 Work Design and Measurement 300
Introduction 301
Job Design 301
Quality of Work Life 305
Methods Analysis 310
Reading: Taylor’s Techniques Help UPS 311
Motion Study 315
Work Measurement 316
Operations Strategy 327
Summary 328
Key Points 328
Key Terms 329
Solved Problems 329
Discussion and Review Questions 330
Taking Stock 331
Critical Thinking Exercises 331
Problems 331
Selected Bibliography and Further Readings 334
SUPPLEMENT TO CHAPTER 7: Learning Curves 336
8 Location Planning and Analysis 348
The Need for Location Decisions 350
The Nature of Location Decisions 350
Global Locations 352
Reading: Coffee? 355
General Procedure for Making Location Decisions 355
Identifying a Country, Region, Community, and Site 356
Service and Retail Locations 363
Evaluating Location Alternatives 364
Summary 370
Key Points 370
Key Terms 371
Solved Problems 371
Discussion and Review Questions 372
Taking Stock 372
Critical Thinking Exercises 373
Problems 373
Case: Hello, Walmart? 377
Selected Bibliography and Further Readings 377
9 Management of Quality 378
Introduction 379
The Evolution of Quality Management 380
The Foundations of Modern Quality Management: The Gurus 381
Insights on Quality Management 383
Readings: American Fast-Food Restaurants Are Having Success in China 386
Hyundai: Exceeding Expectations 389
Quality and Performance Excellence Awards 391
Quality Certification 392
Quality and the Supply Chain 393
Total Quality Management 394
Problem Solving and Process Improvement 398
Quality Tools 401
Operations Strategy 409
Summary 409
Key Points 409
Key Terms 410
Solved Problem 410
Discussion and Review Questions 411
Taking Stock 412
Critical Thinking Exercises 412
Problems 412
Cases:
Chick-n-Gravy Dinner Line 414
Tip Top Markets 415
Selected Bibliography and Further Readings 416
10 Quality Control 418
Introduction 419
Inspection 420
Reading:
Falsified Inspection Reports Create Major Risks and Job Losses 424
Statistical Process Control 425
Process Capability 443
Readings:
RFID Chips Might Cut Drug Errors in
Hospitals 448
Operations Strategy 448
Summary 449
Key Points 450
Key Terms 450
Solved Problems 450
Discussion and Review Questions 454
Taking Stock 455
Critical Thinking Exercises 455
Problems 456
Cases:
Toys, Inc. 462
Tiger Tools 462
Selected Bibliography and Further Readings 463
11 Aggregate Planning and Master
Scheduling 464
Introduction 466
Reading:
Duplicate Orders Can Lead to Excess Capacity 470
Basic Strategies for Meeting Uneven Demand 473
Techniques for Aggregate Planning 476
Aggregate Planning in Services 484
Disaggregating the Aggregate Plan 485
Master Scheduling 486
The Master Scheduling Process 487
Summary 491
Key Points 491
Key Terms 492
Solved Problems 493
Discussion and Review Questions 496
Taking Stock 496
Critical Thinking Exercises 496
Problems 496
Case:
Eight Glasses a Day (EGAD) 501
Selected Bibliography and Further Readings 501
12 Inventory Management 502
Introduction 503
Reading: $$$ 504
The Nature and Importance of Inventories 504
Requirements for Effective Inventory Management 507
Readings: Radio Frequency Identification (RFID) Tags 509
Catch Them Before They Steal! Reducing Inventory Loss With an Assist From AI 510
Drones Can Help With Inventory Management in Warehouses 513
Inventory Ordering Policies 513
How Much to Order: Economic Order Quantity Models 514
Reorder Point Ordering 525
How Much to Order: Fixed-Order-Interval Model 530
The Single-Period Model 533
Operations Strategy 538
Summary 538
Key Points 538
Key Terms 540
Solved Problems 540
Discussion and Review Questions 545
Taking Stock 545
Critical Thinking Exercises 545
Problems 546
Cases:
UPD Manufacturing 553
Grill Rite 554
Farmers Restaurant 554
Operations Tours: Bruegger’s Bagel Bakery 556
PSC, INC. 557
Selected Bibliography and Further Readings 559
13 MRP and ERP 560
Introduction 561
An Overview of MRP 562
MRP Inputs 563
MRP Processing 566
MRP Outputs 573
Other Considerations 574
MRP in Services 576
Benefits and Requirements of MRP 576
MRP II 577
Capacity Requirements Planning 579
ERP 581
Readings: The ABCS of ERP 583
11 Common ERP Mistakes and How to
Avoid Them 587
Operations Strategy 589
Summary 589
Key Points 590
Key Terms 590
Solved Problems 590
Discussion and Review Questions 599
Taking Stock 599
Critical Thinking Exercises 600
Problems 600
Cases:
Promotional Novelties 605
DMD Enterprises 606
Operations Tour:
Stickley Furniture 606
Selected Bibliography and Further Readings 609
14 JIT and Lean Operations 610
Introduction 612
Reading: Toyota Recalls 614
Supporting Goals 615
Building Blocks 616
Reading: General Mills Studied NASCAR Pit Crew to Reduce
Changeover Time 619
Lean Tools 632
Reading: Gemba Walks 635
Transitioning to a Lean System 635
Lean Services 637
JIT II 638
Operations Strategy 638
Summary 639
Key Points 639
Key Terms 640
Solved Problems 640
Discussion and Review Questions 641
Taking Stock 642
Critical Thinking Exercises 642
Problems 642
Case: Level Operations 643
Operations Tour: Boeing 644
Selected Bibliography and Further Readings 645
SUPPLEMENT TO CHAPTER 14: Maintenance 646
15 Supply Chain Management 654
Introduction 656
Trends in Supply Chain Management 657
Readings: Walmart Focuses on Its Supply Chain 660
Supply Chain Transparency 661
At 3M, a Long Road Became a Shorter Road 662
Global Supply Chains 663
ERP and Supply Chain Management 663
Ethics and the Supply Chain 664
Small Businesses 664
Management Responsibilities 665
Procurement 667
E-Business 670
Supplier Management 671
Inventory Management 674
Order Fulfillment 675
Logistics 676
Operations Tour: Wegmans’ Shipping System 677
Readings: UPS Sets the Pace for Deliveries and Safe Driving 679
Springdale Farm 680
Active, Semi-Passive, and Passive RFID Tags 681
Creating an Effective Supply Chain 681
Readings: Clicks or Bricks, or Both? 683
Easy Returns 684
Strategy 686
Summary 687
Key Points 687
Key Terms 687
Discussion and Review Questions 687
Taking Stock 688
Critical Thinking Exercises 688
Problems 688
Case: Mastertag 689
Selected Bibliography and Further Readings 690
16 Scheduling 692
Scheduling Operations 694
Scheduling in Low-Volume Systems 697
Scheduling Services 715
Operations Strategy 719
Summary 719
Key Points 719
Key Terms 720
Solved Problems 720
Discussion and Review Questions 724
Taking Stock 724
Critical Thinking Exercises 724
Problems 725
Case: Hi-Ho, Yo-Yo, Inc. 731
Selected Bibliography and Further Readings 731
17 Project Management 732
Introduction 734
Project Life Cycle 734
Behavioral Aspects of Project Management 736
Reading: Artificial Intelligence Will Help Project Managers 740
Work Breakdown Structure 741
Planning and Scheduling with Gantt Charts 741
PERT and CPM 742
Deterministic Time Estimates 745
A Computing Algorithm 746
Probabilistic Time Estimates 753
Determining Path Probabilities 756
Simulation 758
Budget Control 759
Time–Cost Trade-Offs: Crashing 759
Advantages of Using PERT and Potential Sources of Error 762
Critical Chain Project Management 763
Other Topics in Project Management 763
Project Management Software 764
Operations Strategy 764
Risk Management 765
Summary 766
Key Points 767
Key Terms 767
Solved Problems 767
Discussion and Review Questions 774
Taking Stock 774
Critical Thinking Exercises 774
Problems 774
Case: Time, Please 781
Selected Bibliography and Further Readings 782
18 Management of Waiting Lines 784
Why Is There Waiting? 786
Reading: New Yorkers Do Not Like Waiting in Line 787
Managerial Implications of Waiting Lines 787
Goal of Waiting-Line Management 788
Characteristics of Waiting Lines 789
Measures of Waiting-Line Performance 792
Queuing Models: Infinite-Source 793
Queuing Model: Finite-Source 807
The Psychology of Waiting 813
Reading: David H. Maister on the Psychology of Waiting 814
Operations Strategy 814
Reading: Managing Waiting Lines at Disney World 815
Summary 815
Key Points 816
Key Terms 816
Solved Problems 816
Discussion and Review Questions 818
Taking Stock 818
Critical Thinking Exercises 818
Problems 818
Case: Big Bank 822
Selected Bibliography and Further Readings 822
19 Linear Programming 824
Introduction 825
Linear Programming Models 826
Graphical Linear Programming 828
The Simplex Method 840
Computer Solutions 840
Sensitivity Analysis 843
Summary 846
Key Points 846
Key Terms 846
Solved Problems 846
Discussion and Review Questions 849
Problems 849
Cases: Son, Ltd. 853
Custom Cabinets, Inc. 854
Selected Bibliography and Further Readings 856
APPENDIX A Answers to Selected Problems 858
APPENDIX B Tables 870
APPENDIX C Working with the Normal Distribution 876
APPENDIX D Ten Things to Remember Beyond the Final Exam 882
Company Index 883
Subject Index 884