NCC 5580 Managing Operations Yasin Alan Spring 2011

Course Syllabus
INSTRUCTOR Yasin Alan 201J Sage Hall Email: [email protected] Phone: 607-254-5316 CLASS LOCATION CLASS TIMES OFFICE HOURS Sage Hall B11 W 4:25pm-5:40pm and 5:55pm-7:10pm M 5:00pm-6:30pm Sage 302A F 1:30pm-3:00pm Sage 134 [Required] Matching Supply with Demand: An Introduction to Operations Management (2nd ed.), by G. Cachon and C. Terwiesch, McGraw-Hill/Irwin [Required] The Goal (3rd revised ed.), by E. Goldratt, North River Press COURSE DESCRIPTION AND OBJECTIVES This course provides a general introduction to operations management. Operations management is the management of business processes, that is, the management of the recurring activities of a firm. Along with finance and marketing, operations is one of the three primary functions of a firm. At the risk of being simplistic, one may say that marketing induces the demand for products (goods and services), finance provides the capital, and operations produces and delivers the product. More generally, operations spans the entire organization: COOs are in charge of R&D, design/engineering, production operations, marketing, sales, support, and service. This course aims to (1) familiarize you with the problems and issues confronting operations managers, and (2) to provide you with the language, concepts, insights and tools to deal with these issues in order to gain a competitive advantage through operations. This course should be of particular interest to people aspiring for a career in designing and managing business processes, either directly (e.g., V.P. of Operations) or indirectly (e.g., management consulting).
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TEXTS

The course should also be of interest to people who manage interfaces between operations and other business functions such as engineering, finance, marketing, managerial accounting, and human resources. Finally, a working knowledge of operations, which typically employs the greatest number of employees and requires the largest investment in assets, is indispensable for policy makers, general managers, and entrepreneurs. In this course, we will see how different business strategies require different business processes, and how different operational capabilities allow and support different strategies to gain competitive advantage. A process view of operations will be used to analyze different key operational dimensions such as capacity management, flow (cycle) time management, supply chain and logistics management, quality management. Finally, we will connect to recent developments such as lean or world-class manufacturing, just-in-time operations, and business re-engineering. PREREQUISITES There are no prerequisites for this class, but an elementary algebra and probability/statistics knowledge will be very helpful. GRADING Course grading will be based on the following criteria: o Group Homework Assignments: 40% (5 Assignments, 8% each) o Participation: 10% Class Participation: 5% Team Participation: 5% plus up to 2% extra credit o The Goal Quiz: 5% o Midterm Exam: 15% o Final Exam: 25% o Take-away sheet: 5% Group Homework Assignments: We will have five group assignments one four each course module. Assignments will have a mix of quantitative and qualitative questions reflecting the theme of this course. They are designed to help you better understand and absorb the concepts discussed in class. They should be submitted in groups of maximum four students each. Assignments submitted by groups of five or more students will not be accepted for credit. Groups should not collaborate with each other for the purpose of doing an assignment. Each submission is due at the beginning of the first section. No late submissions will be accepted. Submissions will be graded on clarity of presentation, correct application of concepts and formulas, and whether they reflect an honest attempt at a solution to each question.

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Participation: The development of speaking and listening skills is considered to be an important part of your evaluation in this course. Effective class participation will be judged based on the degree to which your comments contribute to learning in lectures. Everyone will start the semester with 0%. You will end up at 0% if you are shy or absent. I will grade class participation on frequency and quality of your questions/comments. I will track these metrics continuously in the course, and make attempts to give fair airtime to everyone. Because the group homework assignments comprise a significant portion of the total grade, peer review will be used to evaluate 50% of the participation grade (i.e., 5% of your overall grade). You will be asked to evaluate the other members of your team as to the extent of their contribution, beyond what you did yourself. Essentially, if you do your share of the team projects, then you will get full credit; if you do nothing, you will get zero; and if you do more than your share, you will get extra credit for your effort (the other members lack of effort). These peer evaluations will be combined through a constrained optimization problem that avoids the bias inherent in a straightforward weighted average. Tests: We will have a 20 minute quiz from The Goal on February 23. This will be an open book quiz. See page 5 for details. We will have a 65 minute midterm exam on March 16. This exam will cover the material up-to (including) March 9. Final exam on Tuesday, May 17 will be comprehensive, but will mainly focus on the last two modules, inventory management and supply chain management. Midterm and final exams will be closed book and closed notes. However, you are allowed to bring a one page, double-sided cheat sheet. Take-away sheet: See page 6.
HONOR CODE

Students should abide by the Johnson School Honor Code. If you do not understand the rules, please ask for clarification. Potential violations of the Code of Academic Integrity will be treated seriously and penalties may include failure in the course or even expulsion.

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Course Schedule
Week 1 1 2 2 3 3 4 4 5 5 6 6 7 7 Session 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Date 26-Jan 26-Jan 2-Feb 2-Feb 9-Feb 9-Feb 16-Feb 16-Feb 23-Feb 23-Feb 2-Mar 2-Mar 9-Mar 9-Mar Topic Deliverable

Process Analysis
Course Overview / Introduction to OM Process Fundamentals Process Flow Analysis Process Flow Analysis (contd.) Continuous Flow and Batch Processing

Managing Variability
Process Variability Process Variability Quality Management Quality Management & Six Sigma The Toyota Production System Quiz The Goal Homework 1

Optimization
Linear Programming Linear Programming Constrained Optimization Midterm Review Homework 2

Inventory Management
Wed, March 16 4:25-5:30pm 8 9 9 10 10 11 11 12 12 13 13 14 14 16 17 18 19 20 21 22 23 24 25 26 27 28 16-Mar 23-Mar 30-Mar 30-Mar 6-Apr 6-Apr 13-Apr 13-Apr 20-Apr 20-Apr 27-Apr 27-Apr 4-May 4-May Economic Order Quantity Model Demand Forecasting Newsvendor Model Newsvendor Model Midterm Exam Economic Order Quantity Model Spring Break Homework 3

Supply Chain Management

Supply Chain Management - Overview Order up-to and Vendor Managed Inventory Models Supply Chain Coordination Supply Chain Coordination Risk Pooling Strategies Logistics and Facility Location The Role of Operations within the Firm Course Wrap-up / Final Review Final Exam
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Homework 4

Homework 5

Tue, May 17 7:00-9:30pm

NCC 5580 Spring 2011 / Yasin Alan, The Johnson School, Cornell University

Suggested guidelines for reading THE GOAL

Required Reading: You only have to read through page 264 of the book. THE GOAL is an international bestseller (more than 2 million copies sold) and has become a common point of reference for those involved in Operations Management. (For example, one commonly hears the phrase Wheres Herbie? when addressing a capacity issue.) The book illustrates the concepts of Process Analysis that we will study more formally in the first part of this course. If you spend a lot of time listening to your iPod, you can get an unabridged audio version from one of the online bookstores. You are advised to finish reading this book by Wednesday, February 23 since we will have a quiz on that day, which will be based on this book. Following is a summary of the themes of different chapters that you will read in this book. Book chapters to be read before February 23 Chapters 1-4: Introduction to the problems faced by Alexs factory Chapters 5-8: Defining the goals of Alexs factory Chapters 9-12: Is Alexs plant being managed by the goals? Chapters 13-16: Learning on the hike Chapters 17-20: Diagnosis: Where is Herbie in the factory? Chapters 21-24: Learning from the new production schedule Chapters 25-28: Further improvements. Understanding how bottlenecks differ from non-bottlenecks. Chapters 29-31: Effect of batch size on throughput and inventory. Summary of ideas

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Take-Away Sheet
Please briefly describe the lessons or final points you get from each weeks lectures. For example, Week 1: Operations management does not matter because supply always matches demand.

Week
1 2 3 4 5 6 7 8 9 10 11 12 13 14

Take-away

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