Operations_management_10th_edition_by_ja

OPERATIONS MANAGEMENT\nGLOBAL EDITION\nTENTH EDITION\n\nJAY HEIZER\nJesse H. Jones Professor of Business Administration\nTexas Lutheran University\n\nBARRY RENDER\nCharles Harwood Professor of Operations Management\nCrummer Graduate School of Business\nRollins College\n\nPEARSON\n\nBoston Columbus Indianapolis New York San Francisco Upper Saddle River\nAmsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto\nDelhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editorial Director: Sally Yates\nEditor in Chief: Eric Swenson\nAcquisitions Editor: Charles Sturtevant\nAcquisitions Editor, Global Edition: Steven Jackson\nEditorial Project Manager: Kathy McMurray\nEditorial Assistant: Jason Cline\nDirector of Marketing: Patricia Lumbreras\nSenior Marketing Manager: Dean Erasmuis\nMarketing Manager: Anthony Jones\nSenior Project Manager: Bob Richter\nDirector of Operations: Lauri Ann Villa\nManaging Supervisor: Brenda Burch\nProject Researcher: Stella Newman\nManaging Editor and Permissions: Zena Azalia\n\nImage Permission Coordinator: Annice Laird\nManager, Cover Visual Research & Permissions:\n Karren Sautter\n\nCover Designer: Todd Novitzki\nCover Project Manager: Allison Loughrey\nMedia Project Manager: Producer: Liz Lindahl\n\nProduction Services: Mary Kate Murray\nFull-Service Project Management: GGS Higher\n\nRedaction Resources: Division of Mediashelf Global, Inc. \nComposition: GGS Higher Education Resources, \n A Division of Mediashelf Global, Inc.\n\nPrinter/Binder: Cougar/Gearhold, Inc.\nCover Printer: Lehigh-Phoenix/Colors/Signatures\n\nText Font: 1012 Trinidad\n\nCredits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within\nor one per page.\n\nMicrosoft\u00ae and Windows\u00ae are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. Screen shots and icons reproduced with\npermission from the vendor of Microsoft Corporation. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation.\n\nThis is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the\nUnited States or Canada only; you should be aware that this has been published outside the United States or Canada.\n\nCopyright \u00a9 2004, 2001, 2003, 2001 Pearson Education, Inc.; publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey,\n07458. All rights reserved. No part of this publication may be reproduced, copied, or stored in a retrieval system, or transmitted in any form or by any\nmeans, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.\n\nISBN 10: 0-13-511143-9\nISBN 13: 978-0-13-511143-7 To: Tristan, Sebastian, Max, Kate, Owen, Clara,\nthe next generation is in good hands\n\nJH\n\nThe Reva Shader\n\nBR Jay Heizer Professor Emeritus, the Jesse H. Jones Chair of Business Administration, Texas Lutheran University, Seguin, Texas. He received his B.B.A. and M.B.A. from the University of North Texas and his Ph.D. in Management and Statistics from Arizona State University. He was previously a member of the faculty at the University of Memphis, the University of Oklahoma, Virginia Commonwealth University, and the University of Richmond. He has also held visiting positions at Boston University, George Mason University, the Ceiba Management Center, and the Otto von Guericke University, Magdeburg.\n\nDr. Heizer's industrial experience is extensive. He learned the practical side of operations management as a machinist apprentice at Foringer and Company, as a graduating planner for Westinghouse Aircraft, and at Gtearcial Dynamics, where he worked in engineering administration. In addition, he has been actively involved in consulting in the OM and MIS areas for a variety of organizations, including Philip Morris, Firestone, Dixie Container Corporation, Columbia Industries, and Tennessee. He holds the CPIM certification from APICS—the Association for Operations Management.\n\nProfessor Heizer has co-authored 5 books and has published more than 30 articles on a variety of management topics. His papers have appeared in the Academy of Management Journal, Journal of Purchasing, Personnel Psychology, Production & Inventory Control Management, APICS—The Performance Advantage, Journal of Management, Health Solutions and Engineering Management, among others. He has taught operations management courses in undergraduate, graduate, and executive programs.\n\nBarry Render Professor Emeritus, the Charles Harwood Professor of Operations Management, Crummer Graduate School of Business, Rollins College, Winter Park, Florida. He received his B.S. in Mathematics and Physics at Roosevelt University, his M.S. from Operations Research and Ph.D. in Quantitative Analysis at the University of Cincinnati. He previously taught at George Washington University, University of New Orleans, Boston University, and George Mason University. He held the Mason Foundation Professorship in Decision Sciences and was Chair of the Decision Science Department. He has worked in the aerospace industry, for General Electric, McDonnell Douglas, and NASA.\n\nProfessor Render has co-authored 10 textbooks and has extensive experience in Decision Modeling with spreadsheets, Quantitative Analysis for Management, Service Management, Introduction to Management Science, and Cases and Readings in Management Science. Quantitative Analysis for Management, now in its 10th edition, is a leading text in that discipline in the United States and globally. Dr. Render's more than 100 articles on a variety of management topics have appeared in Decision Sciences, Production and Operations Management, Interfaces, Information and Management, Journal of Management Information Systems, Socio-Economic Planning Sciences, IIE Solutions, and Operations Management Review, among others.\n\nDr. Render has been honored as an AACSB Fellow and was twice named a Senior Fulbright Scholar. He was Vice President of the Decision Science Institute Southeast Region and served as Software Review Editor for Decision Line for six years and as Editor of the New York Times Operations Management special issues for five years. From 1984 to 1993, Dr. Render was President of Management Service Associates of Virginia, Inc., whose technology clients included the FBI, the U.S. Navy, Fairfax County, Virginia, and C&F Telephone.\n\nDr. Render has taught operations management courses in Rollins College’s MBA and Executive MBA programs. He has received that school’s Webb Award as leading professor and was selected by Roosevelt University as the 1996 recipient of the St. Claire Drake Award for Outstanding Scholarship. In 2005, Dr. Render received the Rollins College MBA Student Award for Best Overall Course, and in 2009 was named Professor of the Year by full-time MBA students. PART ONE\nIntroduction to Operations Management 33\n1. Introduction to Operations Management 33\n2. The Global Environment and Operations Strategy 59\n3. Managing Projects 87\n4. Forecasting Demand 133\n\nPART TWO\nDesigning Operations 183\n5. Product Design 183\n6. Quality Management and International Standards 219\n Supplement 6: Statistical Process Control 249\n7. Process Design 281\n Supplement 7: Capacity Planning 313\n8. Location Decisions 343\n9. Layout Decisions 373\n10. Job Design and Work Measurement 413\n\nPART THREE\nManaging Operations 449\n11. Managing the Supply Chain 449\n Supplement 11: Outsourcing as a Supply-Chain Strategy 481\n\nPART FOUR\nQuantitative Modules 699\n12. Managing Inventory 497\n13. Aggregate Scheduling 541\n14. Material Requirements Planning (MRP) and ERP 575\n15. Scheduling for the Short Term 613\n16. JIT, Lean Operations, and the Toyota Production System 651\n17. Maintenance and Reliability Decisions 679\n\nPART FIVE\nOnline Tutorials 699\n1. Statistical Tools for Managers T1-1\n2. Acceptance Sampling T2-1\n3. The Simplex Method of Linear Programming T3-1\n4. The MODI and VAM Methods of Solving Transportation Problems T4-1\n5. Vehicle Routing and Scheduling T5-1 Table of Contents\nPART ONE\nIntroduction to Operations Management 33\n1. Introduction to Operations Management 33\nGlobal Company Profile: Hard Rock Cafe 34\nWhat Is Operations Management? 36\nOrganizing to Provide Goods and Services 36\nWhy Study OM? 39\nWhat Operations Managers Do 39\nThe Heritage of Operations Management 40\nOperations in the Service Sector 42\nDifferences between Goods and Services 42\nGrowth of Services 43\nService Pay 43\nExciting New Trends in Operations Management 44\nThe Productivity Challenge 45\nProductivity Measurement 46\nProductivity in the Service Sector 50\nEthics and Social Responsibility 51\nChapter Summary 51 • Key Terms 52 • Ethical Dilemma 52 • Discussion Questions 52 • Solved Problems 52 • Problems 53 • Case Studies: Norwegian Salmon Processing Facility, Trident 55 • Video Case Studies: Operations Management in Manufacturing 55; Hard Rock Café: Operations Management in Service 56 • Bibliography 56 • Rapid Review 57 • Self Test 58\n2. The Global Environment and Operations Strategy 59\nGlobal Company Profile: Boeing 60\nA Global View of Operations 62\nCultural and Ethical Issues 65\nDeveloping Missions and Strategies 66\nMission 66\nStrategy 66\nAchieving Competitive Advantage Through Operations 67\nCompeting on Differentiation 67\nCompeting on Cost 68\nCompeting on Response 68\nTen Strategic OM Decisions 71\nIssues in Operations Strategy 72\nStrategy Development and Implementation 75\nKey Success Factors and Core Competencies 75\nBuild and Staff the Organization 77\nIntegrate OM with Other Activities 77\nGlobal Operations Strategy 78\nInternational Strategy 78\nGlobal Strategy 79\nChapter Summary 80 • Key Terms 80 • Ethical Dilemma 81 • Discussion Questions 81 • Solved Problem 81 • Problems 81 • Case Studies: The Project Manager 81 • Video Case Studies: The Project Manager 83\n3. Managing Projects 87\nGlobal Company Profile: Bechtel Group 88\nThe Importance of Project Management 90\nProject Planning 90\nThe Project Manager 91\nProject Scheduling 93\nProject Controlling 94\nProject Management Techniques: PERT and CPM 95\nThe Framework of PERT and CPM 95\nNetwork Diagrams and Approaches 95\nActivity-on-Node Example 97\nActivity-on-Arrow Example 100\nDetermining the Project Schedule 100\nForward Pass 101\nBackward Pass 103\nCalculating Slack Time and Identifying the Critical Path 104\nVariability in Activity Times 105\nThree Time Estimates in PERT 106\nProbability of Project Completion 108\nCost-Time Trade-offs and Project Crashing 111\nA Critique of PERT and CPM 113 Table of Contents\n6. Quality Management and International Standards 219\nGlobal Company Profile: Arnold Palmer\nHospital 220\nQuality and Strategy 222\nDefining Quality 222\nImplications of Quality 223\nMalcolm Baldrige National Quality Award 224\nCost of Quality (COQ) 224\nEthics and Quality Management 224\nInternational Quality Standards 225\nISO 9000 225\nISO 14000 225\nTotal Quality Management 226\nContinuous Improvement 227\nSix Sigma 227\nEmployee Empowerment 228\nBenchmarking 229\nJust-in-Time (JIT) 230\nTaguchi Concepts 231\nKnowledge of TQM 232\nTools of TQM 232\nCheck Sheets 232\nScatter Diagrams 233\nCause-and-Effect Diagrams 233\nPareto Charts 233\nFlowcharts 234\nHistograms 234\nStatistical Process Control (SPC) 235\nThe Role of Inspection 236\nMean and Range to Inspect 236\nSource Inspection 237\nService Industry Inspection 237\nInspection of Attributes versus Variable 237\nTQM in Services 238\nChapter Summary 241 • Key Terms 241 • Ethical Dilemma 241 • Discussion Questions 241 • Problems 242 • Case Studies: Southwestern University: (C) 244 • Video Case Studies: The Culture of Quality at Arnold Palmer Hospital 245 • Bibliography 246 • Rapid Review 247 • Self Test 248\nSupplement 6: Statistical Process Control 249\nStatistical Process Control (SPC) 250\nControl Charts for Variables 252\nThe Central Limit Theorem 252\nSetting Mean Chart Limits (R-Charts) 253\nSetting Range Chart Limits (R-Charts) 257\nUsing Mean and Range Charts 257\nControl Charts for Attributes 258\nManagerial Issues and Control Charts 262\nProcess Capability 263\nProcess Capability Ratio (Cpk) 263\nProcess Capability Index (Cpi) 264\nAcceptance Sampling 265\nOperating Characteristic Curve 266\nSupplement Summary 268 • Key Terms 268 • Discussion Questions 268 • Using Software for SPC 270 • Solved Problem 271 • Case Studies: Cecil Rice Export, Alexandria, Egypt 275 • Video Case Studies: Tony’s Quality-Controlled Patio Chips Restaurant 277 • Bibliography 278 • Rapid Review 279 • Self Test 280\n7. Process Design 281\nGlobal Company Profile: Harley-Davidson 282\nFour Process Strategies 284\nProcess Focus 284\nRepetitive Focus 285\nProduct Focus 286\nMass Customization Focus 286\nComparison of Process Choices 288\nProcess Analysis and Design 291\nFlowchart 291\nTime-Function Mapping 291\nProcess Charts 293\nService Blueprinting 294\nSpecial Considerations for Service Process Design 295\nCustomer Interaction and Process Design 295\nService Processes 297\nSelection of Equipment and Technology 297\nProduction Technology 298\nMachine Technology 298\nAutomatic Identification Systems (AISs) and RFID 298\nProcess Control 299\nVision Systems 299\nRobots 300\nAutomated Storage and Retrieval Systems (AS/RS) 300\nAutomated Guided Vehicles (AGVs) 300\nFlexible Manufacturing Systems (FMSs) 300\nComputer-Integrated Manufacturing (CIM) 300 Table of Contents\nPART TWO\nDesigning Operations 183\n5. Product Design 183\nGlobal Company Profile: Regal Marine 186\nGoods and Services Selection 186\nProduct Strategy Options Support Competitive Advantage 186\nProduct Life Cycle 187\nLife Cycle and Strategy 188\nProduct-By-Value Analysis 188\nGenerating New Products 189\nNew Product Opportunities 189\nImportance of New Products 189\nProduct Development 190\nProduct Development System 190\nQuality Function Deployment (QFD) 191\nOrganizing for Product Development 193\nManufacturability and Value Engineering 194\nIssues for Product Design 195\nRobust Design 195\nModular Design 195\nComputer-Aided Design (CAD) 196\nComputer-Aided Manufacturing (CAM) 197\nVirtual Reality Technology 197\nValue Analysis 197\nEthics, Environmentally-Friendly Designs, and Sustainability 198\nSystem and Life Cycle Perspectives 198\nTune-Up 201\nPurchasing Technology by Acquiring a Firm 201\nJoint Ventures 202\nDefining a Product 202\nMake-or-Buy Decisions 203\nGroup Technology 204\nDocuments for Production 204\nProduct Life-Cycle Management (PLM) 205\nService Design 206\nDocuments for Services 207\nApplication of Decision Trees to Product Design 209\nTransition to Production 210\nChapter Summary 211 • Key Terms 211 • Ethical Dilemma 211 • Discussion Questions 211 • Solved Problems 212 • Problems 213 • Case Studies: Global’s Product Strategy 214 • Video Case Studies: Product Design at Regal Marine 215 • Bibliography 216 • Rapid Review 217 • Self Test 218 Technology in Services 301\nProcess Reengineering 303\nSustainability 303\nResources 303\nRecycle 304\nRegulations 304\nReputation 304\nChapter Summary 305 • Key Terms 305 • Ethical Dilemma 306 • Discussion Questions 306 • Solved Problem 306 • Problems 306 • Case Studies:\nRoberts Manufacturing's Process Decision: 307;\nEnvironmental Sustainability in Tyree PLC;\nUK 303 • Video Case Studies: Green Manufacturing and Sustainability in Low-Log 308;\nProcess Analysis at Arnold Palmer Hospital 309; Process Strategy at Wheeled Coach 310 • Bibliography 310 • Self Test 312\n\nSupplement 7: Capacity Planning 313\nCapacity 314\nDesign and Effective Capacity 314\nCapacity and Strategy 316\nCapacity Considerations 317\nManaging Demand 318\nDemand and Capacity Management in the Service Sector 319\nBottleneck Analysis and the Theory of Constraints 320\nProcess Flow Charts for Systems, and Cycles 321\nTheory of Constraints 323\nBreak-Even Analysis 326\nSingle-Product Case 326\nMulti-Product Case 326\nReducing Risk with Incremental Changes 328\nApplying Expected Monetary Value (EMV) to Capacity Decisions 329\nApplying Investment Analysis to Strategy-Driven Investments 330\nInvestment, Variable Cost, and Cash Flow 330\nNet Present Value 330\nSupplement Summary 333 • Key Terms 333 • Discussion Questions 333 • Using Software for Break-even Analysis 333 • Solved Problems 334 • Problems 336 • Video Case Studies: Capacity Planning at Arnold Palmer Hospital 339 • Bibliography 340 • Rapid Review 341 • Self Test 342\n\n8. Location Decisions 343\nGlobal Company Profile: FedEx 344\nThe Strategic Importance of Location 346\nFactors That Affect Location Decisions 347\nLabor Productivity 348\nExchange Rates and Currency Risk 348\nCosts 349\nPolitical Risk, Values, and Culture 350\nProximity to Markets 350\nProximity to Suppliers 350\nProximity to Competitors (Clustering) 350\nMethods of Evaluating Location Alternatives 351\nThe Factor-Rating Method 351\nLocational Break-Even Analysis 352\nCenter-of-Gravity Method 353\nTransportation Model 355\nService Location Strategy 356\nHow Hotel Chains Select Sites 357\nThe Call Center Industry 358\nGeographic Information Systems 359\nChapter Summary 360 • Key Terms 360 • Ethical Dilemma 361 • Discussion Questions 361 • Using Software to Solve Location Problems 361 • Solved Problems 362 • Problems 363 • Case Studies: Finding a Location for Electronic Components Manufacturing in Asia 368 • Video Case Studies: Locating at the Next Red Lobster Record 369; Where to Place the Hard Rock Cafe 369 • Bibliography 370 • Rapid Review 371 • Self Test 372\n\n9. Layout Decisions 373\nGlobal Company Profile: McDonald's 373\nThe Strategic Importance of Layout Decisions 376\nTypes of Layouts 376\nOffice Layout 378\nRetail Layout 379\nServicecape 380\nWarehousing and Storage Layouts 381\nCross-Docking 382\nRandom Stocking 382\nCustomizing 382\nRequirements of Work Cells 388\nStaffing and Balancing Work Cells 389\nThe Focused Work Center and the Focused Factory 391\nRepetitive and Product-Oriented Layout 392\nAssembly-Line Balancing 393