Operations Management
An Integrated Approach, EMEA Edition
7th Edition
Published on 10. February 2020
Book
Paperback/Softback
656 pages
978-1-119-66817-6 (ISBN)
Description
As the business environment continues to rapidly change, Dan Reid and Nada Sanders have developed an integrated approach that makes the introductory OM course accessible and engaging for all business majors. Beyond providing a solid foundation, this text covers emerging topics like Artificial Intelligence, Robotics, Data Analytics, and Sustainability and gives equal time to strategic and tactical decisions in both service and manufacturing organizations.
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Content
From the Authors v
Making Operations Management Personal vi
Changes to This Edition viii
Improved Learning Outcomes with WileyPLUS x
Acknowledgments xii
About the Authors xiv
1 Introduction to Operations Management 1
Chapter Overview 1
What is Operations Management? 2
Differences between Manufacturing and Service Organizations 4
Operations Management Decisions 6
Historical Development 9
Today's OM Environment 17
Operations Management in Practice 17
Within OM: How It All Fits Together 18
The Supply Chain Link 20
The Sustainability Link 20
Case: Hightone Electronics, Inc. 21
Case: Creature Care Animal Clinic (A) 21
Case: Analytics in Decision Making 22
Interactive Case: Virtual Company 22
Internet Challenge: Demonstrating Your Knowledge of OM 23
Chapter Highlights / Key Terms / Discussion Questions / Selected Bibliography
2 Operations Strategy and Competitiveness 25
Chapter Overview 25
The Role of Operations Strategy 26
The Importance of Operations Strategy 27
Developing a Business Strategy 27
Developing an Operations Strategy 31
Strategic Role of Technology 36
Productivity 37
Operations Strategy within OM: How It All Fits Together 40
The Supply Chain Link 41
The Sustainability Link 42
Solved Problems 42
Case: Prime Bank of Massachusetts 43
Case: Boseman Oil and Petroleum (BOP) 44
Case: Analytics in Decision Making 45
Interactive Case: Virtual Company 45
Internet Challenge: Understanding Strategic Differences 46
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
3 Product Design and Process Selection 49
Chapter Overview 49
Product Design 50
The Product Design Process 51
Factors Impacting Product Design 55
Process Selection 58
Designing Processes 61
Process Performance Metrics 64
Linking Product Design and Process Selection 65
Technology Decisions 70
Designing Services 74
Product Design and Process Selection within OM: How It All Fits Together 79
The Supply Chain Link 80
The SustainabilIty Link 80
Solved Problems 81
Case: Biddy's Bakery (BB) 83
Case: Creature Care Animal Clinic (B) 83
Case: Analytics in Decision Making 84
Interactive Case: Virtual Company 84
Internet Challenge: Country Comfort Furniture 85
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
4 Supply Chain Management 89
Chapter Overview 89
Basic Supply Chains 90
Issues Affecting Supply Chain Management 96
The Role of Purchasing 105
Sourcing Decisions 108
The Role of Warehouses 116
Implementing Supply Chain Management 121
Supply Chain Management within OM: How It All Fits Together 124
The Supply Chain Link 125
The Sustainability Link 125
Solved Problems 126
Case: Electronic Personal Heart Rate Monitors Supply Chain Management Game 127
Case: Supply Chain Management at Durham International Manufacturing Company (DIMCO) 129
Case: Analytics in Decision Making 130
Interactive Case: Virtual Company 130
Internet Challenge: Global Shopping 131
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
5 Total Quality Management 135
Chapter Overview 135
Defining Quality 136
Cost of Quality 138
The Evolution of Total Quality Management (TQM) 139
The Philosophy of TQM 143
Quality Awards and Standards 154
Why TQM Efforts Fail 156
Total Quality Management (TQM) within OM: How It All Fits Together 157
The Supply Chain Link 158
The Sustainability Link 159
Solved Problems 159
Case: Gold Coast Advertising (GCA) 160
Case: Delta Plastics, Inc. (A) 160
Case: Analytics in Decision Making 162
Interactive Case: Virtual Company 162
Internet Challenge: Snyder Bakeries 163
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
6 Statistical Quality Control 167
Chapter Overview 167
What is Statistical Quality Control? 168
Sources of Variation: Common and Assignable Causes 169
Descriptive Statistics 169
Statistical Process Control Methods 171
Control Charts for Variables 173
Control Charts for Attributes 179
Process Capability 185
Six Sigma Quality 189
Acceptance Sampling 190
Implications for Managers 196
Statistical Quality Control in Services 198
Statistical Quality Control (SQC) within OM: How It All Fits Together 199
The Supply Chain Link 200
The SustainabilIty Link 200
Solved Problems 201
Case: Scharadin Hotels 206
Case: Delta Plastics, Inc. (B) 207
Case: Analytics in Decision Making 207
Interactive Case: Virtual Company 208
Internet Challenge: Safe-Air 208
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
7 Just-in-Time and Lean Systems 214
Chapter Overview 214
The Philosophy of JIT 215
Elements of JIT 217
Just-in-Time Manufacturing 220
Total Quality Management 227
Respect for People 230
Benefits of JIT 233
Implementing JIT 234
JIT in Services 236
JIT and Lean Systems within OM: How It All Fits Together 237
The Supply Chain Link 238
The Sustainability Link 238
Solved Problems 239
Case: Katz Carpeting 239
Case: Dixon Audio Systems 240
Case: Analytics in Decision Making 241
Interactive Case: Virtual Company 241
Internet Challenge: Truck-Fleet, Inc. 242
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
8 Forecasting 245
Chapter Overview 245
Principles of Forecasting 246
Steps in the Forecasting Process 246
Types of Forecasting Methods 247
Time Series Models 251
Causal Models 266
Measuring Forecast Accuracy 270
Selecting the Right Forecasting Model 273
Collaborative Planning, Forecasting, and Replenishment (CPFR) 276
Forecasting within OM: How It All Fits Together 277
The Supply Chain Link 278
The Sustainability Link 278
Solved Problems 279
Case: Bram-Wear 284
Case: The Emergency Room (ER) at Northwest General (A) 285
Case: Analytics in Decision Making 286
Interactive Case: Virtual Company 286
Internet Challenge: Online Data Access 286
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
9 Capacity Planning and Facility Location 293
Chapter Overview 293
Capacity Planning 294
Making Capacity Planning Decisions 299
Decision Trees 301
Location Analysis 304
Making Location Decisions 308
Capacity Planning and Facility Location within OM: How It All Fits Together 318
Capacity Planning and Facility Location across the Organization 318
The Supply Chain Link 318
The Sustainability Link 319
Solved Problems 319
Case: Data Tech, Inc. 322
Case: The Emergency Room (ER) at Northwest General (B) 323
Case: Analytics in Decision Making 323
Interactive Case: Virtual Company 323
Internet Challenge: EDS Office Supplies, Inc. 324
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
10 Facility Layout 329
Chapter Overview 329
What is Layout Planning? 330
Types of Layouts 330
Designing Process Layouts 333
Special Cases of Process Layout 339
Designing Product Layouts 343
Group Technology (Cell) Layouts 349
Facility Layout within OM: How It All Fits Together 350
The Supply Chain Link 351
The Sustainability Link 351
Solved Problems 352
Case: Sawhill Athletic Club (A) 354
Case: Sawhill Athletic Club (B) 355
Case: Analytics in Decision Making 356
Interactive Case: Virtual Company 356
Internet Challenge: D J and Associates, Inc. 356
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
11 Work System Design 363
Chapter Overview 363
Work System Design 364
Job Design 364
Work Measurement 372
Compensation 385
Work System Design within OM: How It All Fits Together 386
The Supply Chain Link 387
The Sustainability Link 388
Solved Problems 388
Case: The Navigator III 391
Case: Northeast State University 391
Case: Analytics in Decision Making 392
Interactive Case: Virtual Company 392
Internet Challenge: E -commerce Job Design 393
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
12 Inventory Management 399
Chapter Overview 399
Basic Inventory Principles 400
Inventory Management Objectives 402
Minimum Inventory Investment 404
Relevant Inventory Costs 406
ABC Inventory Classification 408
Inventory Record Accuracy 411
Determining Order Quantities 413
Determining Safety Stock Levels 428
The Periodic Review System 430
Inventory Management within OM: How It All Fits Together 433
The Supply Chain Link 434
The Sustainability Link 434
Solved Problems 434
Case: FabQual Ltd. 438
Case: Kayaks!Incorporated 438
Case: Analytics in Decision Making 439
Interactive Case: Virtual Company 440
Internet Challenge: Community Fundraiser (A) 440
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
13 Aggregate Planning 447
Chapter Overview 447
Business Planning 448
Aggregate Planning Options 450
Aggregate Plan Strategies 454
Developing the Aggregate Plan 456
Aggregate Planning within OM: How It All Fits Together 465
The Supply Chain Link 466
The Sustainability Link 466
Solved Problems 467
Case: Newmarket International Manufacturing Company (A) 473
Case: JPC, Inc.: Kitchen Countertops Manufacturer 474
Interactive Case: Virtual Company 474
Case: Analytics in Decision Making 475
Internet Challenge: Cruising 475
Chapter Highlights / Key Terms / Discussion Questions / Problems / Selected Bibliography
14 Resource Planning 480
Chapter Overview 480
Enterprise Resource Planning 481
The Benefits and Costs of ERP 484
Material Planning Systems 486
How MRP Works 494
Capacity Requirements Planning (CRP) 500
Resource Planning within OM: How It All Fits Together 502
Resource Planning across the Organization 503
The Supply Chain Link 504
The Sustainability Link 504
Solved Problems 504
Case: Newmarket International Manufacturing Company (B) 508
Case: Desserts by J.B. 510
Case: Analytics in Decision Making 510
Interactive Case: Virtual Company 511
Internet Challenge: The Gourmet Dinner 512
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
15 Scheduling 517
Chapter Overview 517
Basic Scheduling Concepts 518
Developing a Schedule of Operations 523
Optimized Production Technology 532
Scheduling Issues for Service Organizations 534
Scheduling within OM: Putting It All Together 538
The Supply Chain Link 539
The SustainabilIty Link 539
Solved Problems 539
Case: Air Traffic Controller School (ATCS) 543
Case: Scheduling at Red, White, and Blue Fireworks Company 544
Interactive Case: Virtual Company 544
Case: Analytics in Decision Making 545
Internet Challenge: Batter Up 545
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
16 Project Management 550
Chapter Overview 550
The Project Life Cycle 551
Project Management Concepts 552
Estimating the Probability of Completion Dates 564
Reducing Project Completion Time 566
The Critical Chain Approach 569
Project Management within OM: How It All Fits Together 570
The Supply Chain Link 571
The Sustainability Link 572
Solved Problems 572
Case: The Research Office Moves 576
Case: Writing a Textbook 576
Case: Analytics in Decision Making 577
Interactive Case: Virtual Company 578
Internet Challenge: Creating Memories 578
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
Appendix A Solutions to Odd Problems 584
Appendix B The Standard Normal Distribution 608
Appendix C p-Chart 609
Company Index 613
Subject Index 615
Available in WileyPLUS and Wiley Custom:
Supplement A Spreadsheet Modeling: An Introduction A1
Supplement B Introduction to Optimization B1
Supplement C Waiting Line Models C1
Supplement D Master Scheduling and Rough-Cut Capacity Planning D
Making Operations Management Personal vi
Changes to This Edition viii
Improved Learning Outcomes with WileyPLUS x
Acknowledgments xii
About the Authors xiv
1 Introduction to Operations Management 1
Chapter Overview 1
What is Operations Management? 2
Differences between Manufacturing and Service Organizations 4
Operations Management Decisions 6
Historical Development 9
Today's OM Environment 17
Operations Management in Practice 17
Within OM: How It All Fits Together 18
The Supply Chain Link 20
The Sustainability Link 20
Case: Hightone Electronics, Inc. 21
Case: Creature Care Animal Clinic (A) 21
Case: Analytics in Decision Making 22
Interactive Case: Virtual Company 22
Internet Challenge: Demonstrating Your Knowledge of OM 23
Chapter Highlights / Key Terms / Discussion Questions / Selected Bibliography
2 Operations Strategy and Competitiveness 25
Chapter Overview 25
The Role of Operations Strategy 26
The Importance of Operations Strategy 27
Developing a Business Strategy 27
Developing an Operations Strategy 31
Strategic Role of Technology 36
Productivity 37
Operations Strategy within OM: How It All Fits Together 40
The Supply Chain Link 41
The Sustainability Link 42
Solved Problems 42
Case: Prime Bank of Massachusetts 43
Case: Boseman Oil and Petroleum (BOP) 44
Case: Analytics in Decision Making 45
Interactive Case: Virtual Company 45
Internet Challenge: Understanding Strategic Differences 46
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
3 Product Design and Process Selection 49
Chapter Overview 49
Product Design 50
The Product Design Process 51
Factors Impacting Product Design 55
Process Selection 58
Designing Processes 61
Process Performance Metrics 64
Linking Product Design and Process Selection 65
Technology Decisions 70
Designing Services 74
Product Design and Process Selection within OM: How It All Fits Together 79
The Supply Chain Link 80
The SustainabilIty Link 80
Solved Problems 81
Case: Biddy's Bakery (BB) 83
Case: Creature Care Animal Clinic (B) 83
Case: Analytics in Decision Making 84
Interactive Case: Virtual Company 84
Internet Challenge: Country Comfort Furniture 85
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
4 Supply Chain Management 89
Chapter Overview 89
Basic Supply Chains 90
Issues Affecting Supply Chain Management 96
The Role of Purchasing 105
Sourcing Decisions 108
The Role of Warehouses 116
Implementing Supply Chain Management 121
Supply Chain Management within OM: How It All Fits Together 124
The Supply Chain Link 125
The Sustainability Link 125
Solved Problems 126
Case: Electronic Personal Heart Rate Monitors Supply Chain Management Game 127
Case: Supply Chain Management at Durham International Manufacturing Company (DIMCO) 129
Case: Analytics in Decision Making 130
Interactive Case: Virtual Company 130
Internet Challenge: Global Shopping 131
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
5 Total Quality Management 135
Chapter Overview 135
Defining Quality 136
Cost of Quality 138
The Evolution of Total Quality Management (TQM) 139
The Philosophy of TQM 143
Quality Awards and Standards 154
Why TQM Efforts Fail 156
Total Quality Management (TQM) within OM: How It All Fits Together 157
The Supply Chain Link 158
The Sustainability Link 159
Solved Problems 159
Case: Gold Coast Advertising (GCA) 160
Case: Delta Plastics, Inc. (A) 160
Case: Analytics in Decision Making 162
Interactive Case: Virtual Company 162
Internet Challenge: Snyder Bakeries 163
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
6 Statistical Quality Control 167
Chapter Overview 167
What is Statistical Quality Control? 168
Sources of Variation: Common and Assignable Causes 169
Descriptive Statistics 169
Statistical Process Control Methods 171
Control Charts for Variables 173
Control Charts for Attributes 179
Process Capability 185
Six Sigma Quality 189
Acceptance Sampling 190
Implications for Managers 196
Statistical Quality Control in Services 198
Statistical Quality Control (SQC) within OM: How It All Fits Together 199
The Supply Chain Link 200
The SustainabilIty Link 200
Solved Problems 201
Case: Scharadin Hotels 206
Case: Delta Plastics, Inc. (B) 207
Case: Analytics in Decision Making 207
Interactive Case: Virtual Company 208
Internet Challenge: Safe-Air 208
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
7 Just-in-Time and Lean Systems 214
Chapter Overview 214
The Philosophy of JIT 215
Elements of JIT 217
Just-in-Time Manufacturing 220
Total Quality Management 227
Respect for People 230
Benefits of JIT 233
Implementing JIT 234
JIT in Services 236
JIT and Lean Systems within OM: How It All Fits Together 237
The Supply Chain Link 238
The Sustainability Link 238
Solved Problems 239
Case: Katz Carpeting 239
Case: Dixon Audio Systems 240
Case: Analytics in Decision Making 241
Interactive Case: Virtual Company 241
Internet Challenge: Truck-Fleet, Inc. 242
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
8 Forecasting 245
Chapter Overview 245
Principles of Forecasting 246
Steps in the Forecasting Process 246
Types of Forecasting Methods 247
Time Series Models 251
Causal Models 266
Measuring Forecast Accuracy 270
Selecting the Right Forecasting Model 273
Collaborative Planning, Forecasting, and Replenishment (CPFR) 276
Forecasting within OM: How It All Fits Together 277
The Supply Chain Link 278
The Sustainability Link 278
Solved Problems 279
Case: Bram-Wear 284
Case: The Emergency Room (ER) at Northwest General (A) 285
Case: Analytics in Decision Making 286
Interactive Case: Virtual Company 286
Internet Challenge: Online Data Access 286
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
9 Capacity Planning and Facility Location 293
Chapter Overview 293
Capacity Planning 294
Making Capacity Planning Decisions 299
Decision Trees 301
Location Analysis 304
Making Location Decisions 308
Capacity Planning and Facility Location within OM: How It All Fits Together 318
Capacity Planning and Facility Location across the Organization 318
The Supply Chain Link 318
The Sustainability Link 319
Solved Problems 319
Case: Data Tech, Inc. 322
Case: The Emergency Room (ER) at Northwest General (B) 323
Case: Analytics in Decision Making 323
Interactive Case: Virtual Company 323
Internet Challenge: EDS Office Supplies, Inc. 324
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
10 Facility Layout 329
Chapter Overview 329
What is Layout Planning? 330
Types of Layouts 330
Designing Process Layouts 333
Special Cases of Process Layout 339
Designing Product Layouts 343
Group Technology (Cell) Layouts 349
Facility Layout within OM: How It All Fits Together 350
The Supply Chain Link 351
The Sustainability Link 351
Solved Problems 352
Case: Sawhill Athletic Club (A) 354
Case: Sawhill Athletic Club (B) 355
Case: Analytics in Decision Making 356
Interactive Case: Virtual Company 356
Internet Challenge: D J and Associates, Inc. 356
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
11 Work System Design 363
Chapter Overview 363
Work System Design 364
Job Design 364
Work Measurement 372
Compensation 385
Work System Design within OM: How It All Fits Together 386
The Supply Chain Link 387
The Sustainability Link 388
Solved Problems 388
Case: The Navigator III 391
Case: Northeast State University 391
Case: Analytics in Decision Making 392
Interactive Case: Virtual Company 392
Internet Challenge: E -commerce Job Design 393
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
12 Inventory Management 399
Chapter Overview 399
Basic Inventory Principles 400
Inventory Management Objectives 402
Minimum Inventory Investment 404
Relevant Inventory Costs 406
ABC Inventory Classification 408
Inventory Record Accuracy 411
Determining Order Quantities 413
Determining Safety Stock Levels 428
The Periodic Review System 430
Inventory Management within OM: How It All Fits Together 433
The Supply Chain Link 434
The Sustainability Link 434
Solved Problems 434
Case: FabQual Ltd. 438
Case: Kayaks!Incorporated 438
Case: Analytics in Decision Making 439
Interactive Case: Virtual Company 440
Internet Challenge: Community Fundraiser (A) 440
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
13 Aggregate Planning 447
Chapter Overview 447
Business Planning 448
Aggregate Planning Options 450
Aggregate Plan Strategies 454
Developing the Aggregate Plan 456
Aggregate Planning within OM: How It All Fits Together 465
The Supply Chain Link 466
The Sustainability Link 466
Solved Problems 467
Case: Newmarket International Manufacturing Company (A) 473
Case: JPC, Inc.: Kitchen Countertops Manufacturer 474
Interactive Case: Virtual Company 474
Case: Analytics in Decision Making 475
Internet Challenge: Cruising 475
Chapter Highlights / Key Terms / Discussion Questions / Problems / Selected Bibliography
14 Resource Planning 480
Chapter Overview 480
Enterprise Resource Planning 481
The Benefits and Costs of ERP 484
Material Planning Systems 486
How MRP Works 494
Capacity Requirements Planning (CRP) 500
Resource Planning within OM: How It All Fits Together 502
Resource Planning across the Organization 503
The Supply Chain Link 504
The Sustainability Link 504
Solved Problems 504
Case: Newmarket International Manufacturing Company (B) 508
Case: Desserts by J.B. 510
Case: Analytics in Decision Making 510
Interactive Case: Virtual Company 511
Internet Challenge: The Gourmet Dinner 512
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
15 Scheduling 517
Chapter Overview 517
Basic Scheduling Concepts 518
Developing a Schedule of Operations 523
Optimized Production Technology 532
Scheduling Issues for Service Organizations 534
Scheduling within OM: Putting It All Together 538
The Supply Chain Link 539
The SustainabilIty Link 539
Solved Problems 539
Case: Air Traffic Controller School (ATCS) 543
Case: Scheduling at Red, White, and Blue Fireworks Company 544
Interactive Case: Virtual Company 544
Case: Analytics in Decision Making 545
Internet Challenge: Batter Up 545
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
16 Project Management 550
Chapter Overview 550
The Project Life Cycle 551
Project Management Concepts 552
Estimating the Probability of Completion Dates 564
Reducing Project Completion Time 566
The Critical Chain Approach 569
Project Management within OM: How It All Fits Together 570
The Supply Chain Link 571
The Sustainability Link 572
Solved Problems 572
Case: The Research Office Moves 576
Case: Writing a Textbook 576
Case: Analytics in Decision Making 577
Interactive Case: Virtual Company 578
Internet Challenge: Creating Memories 578
Chapter Highlights / Key Terms / Formula Review / Discussion Questions / Problems / Selected Bibliography
Appendix A Solutions to Odd Problems 584
Appendix B The Standard Normal Distribution 608
Appendix C p-Chart 609
Company Index 613
Subject Index 615
Available in WileyPLUS and Wiley Custom:
Supplement A Spreadsheet Modeling: An Introduction A1
Supplement B Introduction to Optimization B1
Supplement C Waiting Line Models C1
Supplement D Master Scheduling and Rough-Cut Capacity Planning D