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Operations Management
viii Preface
Finally, I would like to thank all the people at McGraw-Hill Prafulla Joglekar, LaSalle University; Vijay Kannan, Utah
for their efforts and support. It is always a pleasure to work State University; Sunder Kekre, Carnegie-Mellon University;
with such a professional and competent group of people. Jim Keyes, University of Wisconsin at Stout; Seung-Lae Kim,
Special thanks go to Noelle Bathurst, Portfolio Manager; Drexel University; Beate Klingenberg, Marist College; John
Michele Janicek, Lead Product Developer; Fran Simon and Kros, East Carolina University; Vinod Lall, Minnesota State
Katie Ward, Product Developers; Jamie Koch, Assessment University at Moorhead; Kenneth Lawrence, New Jersey
Content Project Manager; Sandy Ludovissy, Buyer; Matt Dia- Institute of Technology; Jooh Lee, Rowan University; Anita
mond, Designer; Jacob Sullivan, Content Licensing Special- Lee-Post, University of Kentucky; Karen Lewis, University of
ist; Harper Christopher, Executive Marketing Manager; and Mississippi; Bingguang Li, Albany State University; Cheng
many others who worked behind the scenes. Li, California State University at Los Angeles; Maureen P.
I would also like to thank the many reviewers of previous Lojo, California State University at Sacramento; F. Victor
editions for their contributions: Vikas Agrawal, Fayetteville Lu, St. John’s University; Janet Lyons, Utah State Univer-
State University; Bahram Alidaee, University of Mississippi; sity; James Maddox, Friends University; Gita Mathur, San
Ardavan Asef-Faziri, California State University at North- Jose State University; Mark McComb, Mississippi College;
ridge; Prabir Bagchi, George Washington State University; George Mechling, Western Carolina University; Scott Metlen,
Gordon F. Bagot, California State University at Los Angeles; University of Idaho; Douglas Micklich, Illinois State Univer-
Ravi Behara, Florida Atlantic University; Michael Bendixen, sity; Ajay Mishra, SUNY at Binghamton; Scott S. Morris,
Nova Southeastern; Ednilson Bernardes, Georgia Southern Southern Nazarene University; Philip F. Musa, University of
University; Prashanth N. Bharadwaj, Indiana University of Alabama at Birmingham; Roy Nersesian, Monmouth Univer-
Pennsylvania; Greg Bier, University of Missouri at Columbia; sity; Jeffrey Ohlmann, University of Iowa at Iowa City; John
Joseph Biggs, Cal Poly State University; Kimball Bullington, Olson, University of St. Thomas; Ozgur Ozluk, San Francisco
Middle Tennessee State University; Alan Cannon, University State University; Kenneth Paetsch, Cleveland State Univer-
of Texas at Arlington; Injazz Chen, Cleveland State Univer- sity; Taeho Park, San Jose State University; Allison Pearson,
sity; Alan Chow, University of Southern Alabama at Mobile; Mississippi State University; Patrick Penfield, Syracuse Uni-
Chrwan-Jyh, Oklahoma State University; Chen Chung, Uni- versity; Steve Peng, California State University at Hayward;
versity of Kentucky; Robert Clark, Stony Brook University; Richard Peschke, Minnesota State University at Moorhead;
Loretta Cochran, Arkansas Tech University; Lewis Cooper- Andru Peters, San Jose State University; Charles Phillips,
smith, Rider University; Richard Crandall, Appalachian State Mississippi State University; Frank Pianki, Anderson Uni-
University; Dinesh Dave, Appalachian State University; Scott versity; Sharma Pillutla, Towson University; Zinovy Rado-
Dellana, East Carolina University; Kathy Dhanda, DePaul vilsky, California State University at Hayward; Stephen A.
University; Xin Ding, University of Utah; Ellen Dumond, Raper, University of Missouri at Rolla; Pedro Reyes, Baylor
California State University at Fullerton; Richard Ehrhardt, University; Buddhadev Roychoudhury, Minnesota State Uni-
University of North Carolina at Greensboro; Kurt Engemann, versity at Mankato; Narendra Rustagi, Howard University;
Iona College; Diane Ervin, DeVry University; Farzaneh Herb Schiller, Stony Brook University; Dean T. Scott, DeVry
Fazel, Illinois State University; Wanda Fennell, University of University; Scott J. Seipel, Middle Tennessee State Univer-
Mississippi at Hattiesburg; Joy Field, Boston College; War- sity; Raj Selladurai, Indiana University; Kaushic Sengupta,
ren Fisher, Stephen F. Austin State University; Lillian Fok, Hofstra University; Kenneth Shaw, Oregon State University;
University of New Orleans; Charles Foley, Columbus State Dooyoung Shin, Minnesota State University at Mankato;
Community College; Matthew W. Ford, Northern Kentucky Michael Shurden, Lander University; Raymond E. Simko,
University; Phillip C. Fry, Boise State University; Charles Myers University; John Simon, Governors State University;
A. Gates Jr., Aurora University; Tom Gattiker, Boise State Jake Simons, Georgia Southern University; Charles Smith,
University; Damodar Golhar, Western Michigan University; Virginia Commonwealth University; Kenneth Solheim,
Robert Graham, Jacksonville State University; Angappa DeVry University; Young Son, Bernard M. Baruch College;
Gunasekaran, University of Massachusetts at Dartmouth; Victor Sower, Sam Houston State University; Jeremy Staf-
Haresh Gurnani, University of Miami; Terry Harrison, Penn ford, University of North Alabama; Donna Stewart, Univer-
State University; Vishwanath Hegde, California State Uni- sity of Wisconsin at Stout; Dothang Truong, Fayetteville State
versity at East Bay; Craig Hill, Georgia State University; University; Mike Umble, Baylor University; Javad Varzan-
Jim Ho, University of Illinois at Chicago; Seong Hyun Nam, deh, California State University at San Bernardino; Timothy
University of North Dakota; Jonatan Jelen, Mercy College; Vaughan, University of Wisconsin at Eau Claire; Emre Veral,
Preface ix
Baruch College; Mark Vroblefski, University of Arizona; Geoff Willis, University of Central Oklahoma; Pamela Zelbst,
Gustavo Vulcano, New York University; Walter Wallace, Sam Houston State University; Jiawei Zhang, NYU; Zheny-
Georgia State University; James Walters, Ball State Univer- ing Zhao, University of Maryland; Yong-Pin Zhou, Univer-
sity; John Wang, Montclair State University; Tekle Wanorie, sity of Washington.
Northwest Missouri State University; Jerry Wei, University
of Notre Dame; Michael Whittenberg, University of Texas; William J. Stevenson
Walkthrough
1. Plot the data to see if a linear model seems reasonable. In this case, a linear model S O L U T I O N
seems appropriate for the range of the data.
50
40
Units sold, y
30
20
10
0
2 4 6 8 10
Level of unemployment (%), x
2. Check the correlation coefficient to confirm that it is not close to zero using the web-
site template, and then obtain the regression equation:
r = −.966
This is a fairly high negative correlation. The regression equation is
y = 71.85 − 6.91x
Note that the equation pertains only to unemployment levels in the range 3.6 to 9.0, because
sample observations covered only that range.
text’s website.
Computing Multifactor Productivity Problem 3
Compute the multifactor productivity measure for an eight-hour day in which the usable output was
300 units, produced by three workers who used 600 pounds of materials. Workers have an hourly
mhhe.com/stevenson14e
wage of $20, and material cost is $1 per pound. Overhead is 1.5 times labor cost.
Chapter Sixteen Scheduling Usable output 707
Multifactor productivity = __________________________________ Solution
Labor cost + Material cost + Overhead cost
300 units
TABLE 16.5 Excel solution for Example 2a = _____________________________________________________
(3 workers × 8 hours × $20 / hour) + (600 pounds × $1 / pound) +
300 units
Excel Spreadsheet
(3 workers × 8 hours × $20 / hour × 1.50)
= ________________
$480 + $600 + $720
= .167 units of output per dollar of input
Solutions
Where applicable, the
examples and solved
problems include screen
shots of a spreadsheet
ste3889X_ch02_040-073.indd 63
solution. 09/04/19 09:59 AM
Source: Microsoft
c. Using earliest due date as the selection criterion, the job sequence is C-A-E-B-D-F.
The measures of effectiveness are as follows (see table):
(1) Average flow time: 110/6 = 18.33 days xi
(2) Average tardiness: 38/6 = 6.33 days
(3) Average number of jobs at the work center: 110/41 = 2.68
CHAPTER ELEMENTS
Learning Objectives
Every chapter and supplement lists the learning
objectives to achieve when studying the chapter Rev.Confirming Pages
4
C H A P T E R
Product and Service
Design
LEARNING OBJECTIVES
After completing this chapter, you should be able to:
LO4.1 Explain the strategic importance of product and service design.
LO4.2 Describe what product and service design does.
LO4.3 Name the key questions of product and service design.
LO4.4 Identify some reasons for design or redesign.
LO4.5 List some of the main sources of design ideas.
LO4.6 Discuss the importance of legal, ethical, and sustainability considerations in product and service design.
Mark Lennihan/AP Images
LO4.7 Explain the purpose and goal of life-cycle assessment.
LO4.8 Explain the phrase “the 3 Rs.”
LO4.9 Briefly describe the phases in product design and development.
165 Service Blueprinting 168 4.12 Operations Strategy 170
LO4.10 Discuss several key issues in product or service design. 4.11 Service
OverviewDesign
of Service Design 166 Characteristics of Well- Operations Tour: High Acres
LO4.11 Discuss the two key issues in service design. Differences between Designed Service Systems 168 Landfill 174
LO4.12 List the characteristics of well-designed service systems. Service Design and Challenges of Service Chapter Supplement:
Product Design 166 Design 169 Reliability 176
LO4.13 List some guidelines for successful service design.
Phases in the Service Design Guidelines for Successful
Process 167 Service Design 169
C H A P T E R O U T L I N E
4.1 Introduction 140 4.7 Environmental Factors: Designing for Mass
What Does Product and Service Sustainability 146 Customization 154 The essence of a business organization is the products and services it offers, and every LO4.1 Explain the strate-
Design Do? 140 Cradle-to-Grave Assessment 146 Reliability 156 aspect of the organization and its supply chain are structured around those products gic importance of product
Objectives of Product and End-of-Life Programs 147 Robust Design 157 and services. Organizations that have well-designed products or services are more and service design.
Service Design 141 The Three Rs: Reduce, Reuse, Degree of Newness 158 likely to realize their goals than those with poorly designed products or services. Hence,
Key Questions 141 and Recycle 147
Reduce: Value Analysis 147
Quality Function Deployment 158 organizations have a strategic interest in product and service design. Product or service design should be closely tied
Reasons for Product or Service The Kano Model 160
Design or Redesign 141 Reuse: Remanufacturing 148 to an organization’s strategy. It is a major factor in cost, quality, time-to-market, customer satisfaction, and competitive
Recycle 149 4.9 Phases in Product Design advantage. Consequently, marketing, finance, operations, accounting, IT, and HR need to be involved. Demand fore-
4.2 Idea Generation 142 and Development 162
4.3 Legal and Ethical 4.8 Other Design casts and projected costs are important, as is the expected impact on the supply chain. It is significant to note that an
Considerations 151 4.10 Designing for Production 163
Considerations 144
Concurrent Engineering 163
important cause of operations failures can be traced to faulty design. Designs that have not been well thought out, or
Strategies for Product or
4.4 Human Factors 145 Service Life Stages 151 Computer-Aided Design are incorrectly implemented, or instructions for assembly or usage that are wrong or unclear, can be the cause of prod-
4.5 Cultural Factors 145 Product Life Cycle (CAD) 164 uct and service failures, leading to lawsuits, injuries and deaths, product recalls, and damaged reputations.
4.6 Global Product and Service Management 153 Production Requirements 165
Design 146 Degree of Standardization 153 Component Commonality 165 continued
138 139
Moreover, this approach pays little attention to suppliers and government regulations, and
6.2 PROCESS SELECTION
community, environmental, and sustainability issues are missing. These are closely linked,
and business organizations LO6.2
need to Name theoftwo
be aware the impact they are having in these areas and
respond accordingly. Otherwise, organizations
main factors Process
may be subject
that influence choice
to attack by is demand-driven.
pressure groups The two key questions in process selection are:
and risk damage to their reputation.
process selection.
1. How much variety will the process need to be able to handle?
2. How much volume will the process need to be able to handle?
Answers to these questions will serve as a guide to selecting an appropriate process. Usu-
2.7 PRODUCTIVITY ally, volume and variety are inversely related; a higher level of one means a lower level of the
LO2.6 Define the term
other. However, the need for flexibility of personnel and equipment is directly related to the
productivity and explain One of the primary responsibilities of a manager is to achieve productive use of an organiza-
why it is important to com-
level
tion’s resources. The term productivity is used to describe this. of variety the
Productivity is anprocess will need to handle: The lower the variety, the less the need for
index that
panies and to countries. flexibility,
measures output (goods and services) relative to the input (labor, while
materials, the higher
energy, the variety, the greater the need for flexibility. For example, if a
and other
worker’s
resources) used to produce it. It is usually expressed as the ratio job to
of output in input:
a bakery is to make cakes, both the equipment and the worker will do the same
Productivity A measure of thing day after day, with little need for flexibility. But if the worker has to make cakes, pies,
Output cookies, brownies, and croissants, both the worker and the equipment must have the flexibil-
the effective use of resources, Productivity = ______ (2–1)
usually expressed as the ratio Input ity to be able to handle the different requirements of each type of product.
of output to input. Thereitisisanother
Although productivity is important for all business organizations, aspect
particularly of variety that is important. Variety means either having dedicated
impor-
tant for organizations that use a strategy of low cost, becauseoperations
the higherfortheeach differentthe
productivity, product or service, or if not, having to get equipment ready every
lower the cost of the output. time there is the need to change the product being produced or the service being provided.
A productivity ratio can be computed for a single operation, a department, an organiza-
tion, or an entire country. In business organizations, productivity ratios are used for planning
workforce requirements, scheduling equipment, financial analysis, and other important tasks.
Productivity has important implications for business organizations and for entire nations.
For nonprofit organizations, higher productivity means lower costs; for profit-based organiza-
tions, productivity is an important factor in determining how competitive a company is. For
a nation, the rate of productivity growth is of great importance. Productivity growth is the
ste3889X_ch06_244-299.indd 246 08/01/19 07:28 AM
increase in productivity from one period to the next relative to the productivity in the preced-
ing period. Thus,
Current productivity − Previous productivity xiii
Productivity growth = _____________________________________ × 100 (2–2)
Previous productivity
Rev.Confirming Pages
Chapter Five Strategic Capacity Planning for Products and Services 213
A variety of factors can interfere with effective capacity, so effective capacity is usually somewhat
basis for classroom discussion of unused paint.
less than design capacity. These factors include facilitiesWhiledesign and layout,
the lid requires no tools human
to access,factors,
the snap-offproduct/
carry bail
in the bottom that mates with the lid’s top ring. “The new design
allows for one additional shelf facing on an eight-foot rack or
and generate interest in the
service design, equipment failures, scheduling problems,
can be
and quality
is assembled on theconsiderations.
container in a “locked-down position” and
pulled up after purchase for toting or hanging on relate
a ladder.
shelf area.”
Capacity planning involves long-term and short-term considerations. Long-term considerations The labels are applied automatically, quite a feat, considering
subject matter. Many of the Large, nearly 4½-inch-tall label panels allow glossy front and back
to the overall level of capacity; short-term considerations relate to variations in capacity requirements their complexity, size, and the hollow handle they likely encounter
labels printed and UV-coated to wrap around the can’s rounded during application. MacDonald admits, “Label application was a
due to seasonal, random, and irregular fluctuations corners,
end-of-chapter readings include in demand. Ideally, display.
for an impressive capacity will match demand.
challenge. We had to modify the bottle several times to accom-
Jim MacDonald, co-designer of the Twist & Pour and a packag- modate the labeling machinery available.”
assignment questions. ing engineer at Cleveland-based Sherwin-Williams, tells Packaging
Digest that the space-efficient, square shape is easier to ship and Source: “Dutch Boy Brushes Up Its Paints,” Packaging Digest, October 2002.
easier to stack in stores. It can also be nested, courtesy of a recess Copyright ©2002 Reed Business Information. Used with permission.
Ft = a + bt
Final PDF to printer
where
n∑ ty − ∑ t∑ y a = y intercept
Linear trend forecast b = ______________
n∑ t 2 − (∑ t 2) b = Slope
∑ y − b∑ t
a = ______ or ¯y − b¯t
n
√
________
Standard error of ∑ (y − y c) 2
_______
S e = Standard error of estimate
estimate Se = y = y value of each data point
n−2
n = Number of data points
3.
agers need to be prepared to deal with forecast errors.
Other, nonrandom factors might also be present, so it is necessary to monitor forecast errors to
Chapters contain summaries that provide an
4.
check for nonrandom patterns in forecast errors.
It is important to choose a forecasting technique that is cost-effective and one that minimizes fore-
Rev.Confirming Pages overview of the material covered, and the
cast error.
key points of the chapter are emphasized in a
associative model, 80 judgmental forecasts, 80 regression, 98
bias, 109
centered moving average, 96
least squares line, 99
linear trend equation, 89
seasonality, 82
seasonal relative, 94
KEY TERMS
separate section.
control chart, 107 Chapter One deviation
mean absolute Introduction to Operations Management
seasonal variations, 93 37
correlation, 102 (MAD), 106 standard error of estimate, 100 Confirming Pages
cycle, 82 mean absolute percent error time series, 82
7. What are models
Delphi
8. Why error,
method,and
is the
81why are they important?
(MAPE), 106
degree of customization an mean
105 important consideration
squared
time-series forecasts, 80
in process
error (MSE), 106 planning?
tracking signal, 109
Key Terms
9. Listexponential smoothing,
the trade-offs 87consider for
you would moving
each average,
of these 84
decisions: trend, 82
focus forecasting, 88 naive forecast, 82
a. Driving your own car versus public transportation.
forecast, 76 predictor variables, 98
trend-adjusted exponential
smoothing, 92
Key
Chapter Five
terms are highlighted in the text and then217
Strategic Capacity Planning for Products and Services
b. irregular
Buying a variation,
computer 82
now versus waiting for an
random improved82model.
variations, weighted average, 86
c. Buying a new car versus buying a used car. repeated in the margin with brief definitions for
5. Give some examples of building flexibility into system design.
d. Speaking up in class versus waiting to get called on by the instructor.
e. A small business owner having a website versus newspaper advertising. emphasis.
6. Why is it important to adopt a big-picture They
approach to capacity are listed at the end of each
planning?
09/25/19 10:58 AM
reviewing.
9. How can a systems approach to capacity planning be useful?
10. How do capacity decisions influence productivity?
These activities encourage analytical thinking
b. Managing a supply chain
13. List and briefly explain the four basic sources of variation, and explain why it is important for
11. Why is it important to match process capabilities with product requirements?
12. Briefly discuss how uncertainty affects capacity decisions.
managers to be able to effectively deal with variation.
and14.help broaden
Why do people conceptual
do things that are unethical? understanding. 13. Discuss the importance of capacity planning in deciding on the number of police officers or fire
trucks to have on duty at a given time.
A q15.
uestion related
Explain the term value-added.
to ethics
16. Discuss the various impacts of outsourcing.
is included in the Discussion and Review Questions
14. Why is capacity planning one of the most critical decisions a manager has to make?
15. Why is capacity planning for services more challenging than it is for goods production?
Critical Thinking Exercises.
17. Discuss the term sustainability, and its relevance for business organizations.
16. What are some capacity measures for each of the following?
a. University Each chapter and each supplement have a
b. Hospital
This item appears at the end of each chapter. It is intended to focus your attention on three key
issues for business organizations in general, and operations management in particular. Those issues TAKING c.STOCK
Computer repair shop list of discussion and review questions. These
d. Farm
are trade-off decisions, collaboration among various functional areas of the organization, and the
impact of technology. You will see three or more questions relating to these issues. Here is the first precede
17. What is the benefit to a business organization of havingthe
capacityproblem
measures? sets and are intended
set of questions:
1. What are trade-offs? Why is careful consideration of trade-offs important in decision making?
to serve as a student self-review or as class
1. What are the major trade-offs in capacity planning?
2. Who needs to be involved in capacityd iscussion starters.
2. Why is it important for the various functional areas of a business organization to collaborate? TAKING STOCK
planning?
3. In what general ways does technology have an impact on operations management decision 3. In what ways does technology have an impact on capacity planning?
making?
1. A computer repair service has a design capacity of 80 repairs per day. Its effective capacity, how-
ever, is 64 repairs per day, and its actual output is 62 repairs per day. The manager would like to CRITICAL THINKING
This item also will appear in every chapter. It allows you to critically apply information you learned in increase the number of repairs per day because demand is higher than 70 repairs per day, creating a EXERCISES
the chapter to a practical situation. Here is the first set of exercises: CRITICAL THINKING
backlog of orders. Which factors would you recommend that the manager investigate? Explain your
EXERCISES
1. Many organizations offer a combination of goods and services to their customers. As you learned reasoning.
in this chapter, there are some key differences between the production of goods and the delivery of 2. Compared to manufacturing, service requirements tend to be more time dependent, location depen-
services. What are the implications of these differences relative to managing operations? dent, and volatile. In addition, service quality is often directly observable by customers. Find a
recent article in a business magazine that describes how a service organization is struggling with
2. Why is it important to match supply and demand? If a manager believes that supply and demand
one or more of these issues and make recommendations on what an organization needs to do to
will not be equal, what actions could the manager take to increase the probability of achieving a
overcome these difficulties.
match?
3. Identify four potential unethical actions or inactions related to capacity planning, and the ethical
3. One way that organizations compete is through technological innovation. However, there can be principle each violates (see Chapter 1).
downsides for both the organization and the consumer. Explain.
4. Any increase in efficiency also increases utilization. Although the upper limit on efficiency is
4. What ethical considerations are important in development of technology in general, as well as AI 100 percent, what can be done to achieve still higher levels of utilization?
(artificial intelligence)?
5. a. What would cause a businessperson to make an unethical decision?
Problem Sets
b. What are the risks of doing so?
1. Determine the utilization and efficiency for each of the following situations.
a. A loan processing operation that processes an average of 7 loans per day. The operation has a
PROBLEMS
design capacity of 10 loans per day and an effective capacity of 8 loans per day.
Each chapter includes a set of problems b. A furnace repair team that services an average of four furnaces a day if the design capacity is
six furnaces a day and the effective capacity is five furnaces a day.
for assignment. The problems have been c. Would you say that systems that have higher efficiency ratios than other systems will always
have higher utilization ratios than those other systems? Explain.
refined over many editions and are intended 2. In a job shop, effective capacity is only 50 percent of design capacity, and actual output is 80 percent
of effective output. What design capacity would be needed to achieve an actual output of eight jobs
per week?
to be challenging but doable for students.
ste3889X_ch01_002-039.indd 37 08/01/19 06:47 AM
xv
606
Promotional Novelties provides a wide range of novelty items for The company can complete final assembly of the tractor-
its corporate customers. It has just received an order for 20,000 trailers at the rate of 10,000 a week. The tractor and trailer bodies
toy tractor-trailers that will be sold by a regional filling station com- are purchased; lead time is three weeks. The wheels are the
pany as part of a holiday promotion. The order is to be shipped manager’s main concern.
at the beginning of week 8. The tree diagram shows the various The company has a sufficient supply of brackets on hand.
components of the trucks. Assembly time is one week each for tractors, trailers, and wheel
Tractor-trailer assembly. However, the wheel department can only produce
wheels at the rate of 100,000 a week. The manager plans to
use the wheel department to full capacity, starting in week 2
Tractor Trailer of the schedule, and order additional wheels from a supplier
as needed. Ordered wheels come in sets of 6,400. The lead
time for delivery from the supplier is expected to be two to
three weeks. Use lot-for-lot ordering for all items except the
Wheel Body Wheel Body purchased wheels.
assembly assembly
Questions
1. How many wheel sets should the manager order?
Wheels (6) Bracket Wheels (12) Bracket 2. When should the wheel sets be ordered?
Cases
The text includes short cases. The cases were
selected to provide a broader, more integrated
thinking opportunity for students without taking
a full case approach.
xvi
INSTRUCTOR RESOURCES
Available within Connect, instructors have access to teaching supports such as electronic files
of the ancillary materials: Solutions Manual, Instructor’s Manual, Test Bank, PowerPoint
Lecture Slides, Digital Image Library, and accompanying Excel files.
Instructor’s Manual. This manual, revised for the new edition by Tracie Lee, Idaho
State University, includes teaching notes, chapter overview, an outline for each chapter, and
solutions to the problems in the text.
Test Bank. Updated for the new edition by Leslie Sukup, Ferris State University, and
reviewed by Nancy Lambe, University of South Alabama, the Test Bank includes over
2,000 true/false, multiple-choice, and discussion questions/problems at varying levels of
difficulty. The Test Bank is available to assign within Connect, as Word files available in
the Instructor Resource Library, and through our online test generator. Instructors can orga-
nize, edit, and customize questions and answers to rapidly generate tests for paper or online
administration.
Digital Image Library. All the figures in the book are included for insertion in PowerPoint
slides or for class discussion.
xvii
FOR INSTRUCTORS
FOR STUDENTS
No surprises.
The Connect Calendar and Reports tools keep you on track with the
work you need to get done and your assignment scores. Life gets busy;
Connect tools help you keep learning through it all.
Note to Students
The material in this text is part of the core knowledge in your 5. Discuss the subject matter in some depth, including its
education. Consequently, you will derive considerable ben- relevance, managerial considerations, and advantages
efit from your study of operations management, regardless and limitations.
of your major. Practically speaking, operations is a course in
You will encounter a number of chapter supplements.
management.
Check with your course syllabus to determine which ones are
This book describes principles and concepts of operations
included.
management. You should be aware that many of these prin-
This book places an emphasis on problem solving. There
ciples and concepts are applicable to other aspects of your
are many examples throughout the text illustrating solutions.
professional and personal life. You can expect the benefits of
In addition, at the end of most chapters and supplements you
your study of operations management to serve you in those
will find a group of solved problems. The examples within
other areas as well.
the chapter itself serve to illustrate concepts and techniques.
Some students approach this course with apprehension, and
Too much detail at those points would be counterproductive.
perhaps even some negative feelings. It may be that they have
Yet, later on, when you begin to solve the end-of-chapter
heard that the course contains a certain amount of quantitative
problems, you will find the solved problems quite helpful.
material that they feel uncomfortable with, or that the subject
Moreover, those solved problems usually illustrate more and
matter is dreary, or that the course is about “factory manage-
different details than the problems within the chapter.
ment.” This is unfortunate, because the subject matter of this
I suggest the following approach to increase your chances
book is interesting and vital for all business students. While
of getting a good grade in the course:
it is true that some of the material is quantitative, numerous
examples, solved problems, and answers at the back of the 1. Do the class preparation exercises for each chapter if
book help with the quantitative material. As for “factory man- they are available from your instructor.
agement,” there is material on manufacturing, as well as on 2. Look over the chapter outline and learning objectives.
services. Manufacturing is important, and something that you
3. Read the chapter summary, and then skim the chapter.
should know about for a number of reasons. Look around you.
Most of the “things” you see were manufactured: cars, trucks, 4. Read the chapter and take notes.
planes, clothing, shoes, computers, books, pens and pencils, 5. Look over and try to answer some of the discussion and
desks, and cell phones. And these are just the tip of the ice- review questions.
berg. So it makes sense to know something about how these 6. Work the assigned problems, referring to the solved
things are produced. Beyond all that is the fact that manufac- problems and chapter examples as needed.
turing is largely responsible for the high standard of living
people have in industrialized countries. Note that the answers to many problems are given at the
After reading each chapter or supplement in the text, end of the book. Try to solve each problem before turning to
attending related classroom lectures, and completing assigned the answer. Remember—tests don’t come with answers.
questions and problems, you should be able to do each of the And here is one final thought: Homework is on the
following: Highway to Success, whether it relates to your courses, the
workplace, or life! So do your homework, so you can have a
1. Identify the key features of that material. successful journey!
2. Define and use terminology.
3. Solve typical problems. W.J.S.
4. Recognize applications of the concepts and techniques
covered.
xx
Brief Contents
Preface vii
1 Introduction to Operations Management 2
2 Competitiveness, Strategy, and Productivity 40
3 Forecasting 74
4 Product and Service Design 138
SUPPLEMENT TO CHAPTER 4: Reliability 176
5 Strategic Capacity Planning for Products and Services 190
SUPPLEMENT TO CHAPTER 5: Decision Theory 222
6 Process Selection and Facility Layout 244
7 Work Design and Measurement 300
SUPPLEMENT TO CHAPTER 7: Learning Curves 336
8 Location Planning and Analysis 348
9 Management of Quality 378
10 Quality Control 418
11 Aggregate Planning and Master Scheduling 464
12 Inventory Management 502
13 MRP and ERP 560
14 JIT and Lean Operations 610
SUPPLEMENT TO CHAPTER 14: Maintenance 646
15 Supply Chain Management 654
16 Scheduling 692
17 Project Management 732
18 Management of Waiting Lines 784
19 Linear Programming 824
xxi
At length they dropped in the high grass not many yards away,
and began laying the foundation for their house, undaunted by the
trio of natural nest burglars whose wondering eyes and ears had
taken them in. But Mike, Pat, and Biddy never discovered the pale-
blue egg that soon lay there; and in the days that followed, when the
other Tomatoes and Bertino were afield gathering dandelion leaves,
and Bridget sat with her knitting at the kitchen door, the rollicking
song of these trustful neighbours was often the only sound that
enlivened the desolate moor.
When Saturday morning came, and the push-cart was heaped
high with the esculent herbs, Signor Tomato said to Bridget:
“Guess ees-a better I’m goin’ to de cit for sell-a de salata. See
how moocha! Moosta have tree dollar for dat.”
“Sure,” said Bridget, and away he started with their first load of
produce for market. Bertino helped him push as far as Jamaica; then
he went to the post office to inquire for the letter that Juno had
promised to write telling him the result of his uncle’s wound. There
was no letter for him. He had made up his mind to get away from
America somehow should the death of Signor Di Bello make him a
murderer, but he thirsted for an accounting with Juno in the matter of
the bust. His wife had deceived him, and the canons of vendetta left
him only one course. At the same time he saw that he was in Juno’s
power, and for the present must do naught to fan her wrath. She
knew his hiding place, and could deliver him to the man-hunters of
the Central Office. What a simpleton he had been to tell her! Had his
heart not warned him all along that she did not love him? Well, he
was blind no more. He would wait, and if his uncle died, Australia or
any other land would do for a refuge, but he would not quit America
until he had collected from Juno the debt she owed him and the poor
sculptor whom her treachery would be sure to send to a madhouse.
As he trudged back to the pipes it occurred to him that there
would be fine lyric justice in a measure of vitriol well thrown at the
face that poor Armando’s marble so faithfully depicted. But to this
form of payment he quickly said no; smooth, lean steel, tried and
true, was the best friend of the vendetta.
When Signor Tomato reached Mulberry the day was spent, and
the market minstrels had begun their songs. It was no easy work for
him to find a place at the curbstone wherein he could squeeze and
join the long line of Saturday-night venders who filled the air with
their ditties. In the weary solitude of his journey from Jamaica he had
had ample time to plagiarize an ancient market couplet, so that when
he began to offer his wares he was able to do so in the manner of a
veteran:
The people marvelled at beholding the banker in his new rôle, but
they bought of his stock, and the first venture of Villa Tomato in the
world of commerce was a resplendent success.
CHAPTER XVII
THE FALCON SAVES THE DOVE
“Marianna!”
It was the austere voice of Carolina, and a love scene behind the
second-cabin smoking room came to an abrupt close. Though it was
not the first stolen meeting with Armando that she had broken up
during the voyage, Carolina had never told the girl that she must
shun other suitors because of a husband already chosen for her in
New York. Profiting by her experience as a meddler in the love
affairs of others, she had deemed best to conceal her matrimonial
plans for Casa Di Bello until it should be too late for Marianna to defy
her wishes. Not until the final day of the passage, therefore, did she
let out the cat. Then she pictured to the girl the splendid future
prepared for her as the wife of Signor Di Bello, the merchant prince
of Mulberry.
“But I am promised to Armando,” said Marianna. “How can I
marry any one else?”
“Bah! A poor devil whom you would have to feed. You will never
see him again. In America he will soon forget you and find another
amorosa. With my brother for a husband you will be a signora—as
fine a lady as any in America. We have many pigs in Mulberry. With
this good-for-naught sculptor you would soon be one of them.”
“He is as good as any one else—even your brother. Anyhow, I
love him.”
The hour had come for Carolina to assert her power. “Love him!”
she snapped. “What if you do? Will love put meat in your soup? You
are matta [crazy]. Perhaps I shall find a way to give you reason. Do
you think you would like to be homeless in that?”
The ship was nearing the Battery, and Carolina pointed toward
the New York shore. With deep satisfaction she perceived that the
girl’s spirit quailed before the awful vastness of the city. Presently
Marianna caught sight of Armando coming from the companion way
with his poor little valise, which she knew contained all his worldly
goods. What if she defied her aunt, and cast her fortunes at once
with him? No. She could not add to his burden. But need she do so?
Could she not rather be a help? Toil had been ever her lot. She could
not remember when she had not worked away her days—until, until
Aunt Carolina had taken her up, had provided her with fine clothes,
and made her live like a signora. No matter; she would rather be
poor and work for Armando. But New York! That great monster
crouching there in its Sunday nap, and sending lazy curls of
steaming breath from its thousands of snouts! It was that they would
have to dare—to fight that!
“You are a ninny to stand there in doubt—to think of doing
anything but what I say,” Carolina went on. “See the clothes I have
bought you. Do you know what I paid in Genova for that dress, that
hat, those shoes? Well, I paid sixty lire, not counting the buttons and
lining. But what can one expect from a silly girl? I buy you fine
clothes, I bring you to America in second class like a signora. I offer
you a signore for a husband, with a beautiful house to live in. But
you, the goose, say you like better to dress in rags, to have a beggar
for a husband, to starve, to live in the streets; for into the streets you
go, remember, if you continue to play the fool.”
Carolina was no stranger to the lotus that gives languor of
conscience toward means when the end cries for attainment.
Moreover, her present mood was bordering desperation. The mishap
that laid her low for so many months had worn off her veneer of
placidity, and she returned to America much the same galvanic
Italian that she was the day she first set foot in Castle Garden—the
Carolina of pre-churchly days, who flared up and left her brother’s
roof after a quarrel over watermelons, and put herself under holy
orders. Unluckily for her peace of mind, while she lay a prisoner in
the mountains waiting for broken bones to knit, she had received
advices regularly concerning affairs at Casa Di Bello—especially
affairs matrimonial. The letters were in the fine hand of the public
writer of Mulberry, but the message they bore came from Carolina’s
faithful ally, Angelica. In her zeal to serve, the cook only added
wormwood to her mistress’s cup of gall, for her missives always told
darkly of some would-be wife threatening the castle. The last letter
had spoken with maddening vagueness of a crisis surely at hand,
and Carolina’s instinct told her that the crisis was Juno. For this
reason she had sailed a week before the day given her brother as
the one of her intended departure. How could she remain supine in
Genoa when Casa Di Bello stood menaced with an invasion that
meant ruin to her fond designs? With Juno driven back, Carolina saw
the battle won, for she had no doubt at all of her power to mould the
will of a lovelorn maid. She was guilefully confident that there would
arise no balk to her plans through Marianna’s refusal to be wived by
Di Bello, for, with a subtilty deep set in her nature, she had counted
from the outset, other arguments failing, that she should persuade
the damsel in the end by the homely device of threatening to turn her
adrift. Wherefore, having begun the assault, and observing that this
line of tactics had melted Marianna to a thoughtful silence, she
followed it up while they crossed the ferry from Hoboken, seated in a
cab, their luggage on top. As they rolled over the cobbles of the
lower East Side and the warm breath of May entered the window,
Carolina gave her picture of a girl homeless and starving in the big
city many a convincing touch. At Broadway, chance came to her aid
with an object lesson. There was a cable-car blockade, and while the
cab waited, a haggard woman, young but aged by vice and want, put
her open hand into the window. Carolina drove her away with an
angry word and a contemptuous stare.
“You see how one treats beggars in New York,” she said to
Marianna, whose colour had all gone. “You would be like that if I shut
the door on you. Who do you think would feed you if I turned you
out?”
Marianna looked upon the strange faces that passed by, and
something she saw there—or the lack of something—in the eyes of
her fellow-beings struck fresh terror to her soul, and the tears came.
“Oh, where is Armando?” she asked herself, sobbing. Why had he
left the ship without her? It was all his fault. He should have taken
her with him. He did not love her, and would not care if she did marry
Signor Di Bello. If they had only stayed in Italy—in the mountains,
where she had been so happy! She would have remained if
Armando had. She knew she would, in spite of Carolina. But he, too,
was a fool. All was lost now—their love, their happiness. But for the
bust he would have stayed at home, perhaps—yes, it was the bust!
Maledictions upon it and the First Lady of the Land!
The cab dashed under the roar of an Elevated train. Carolina lay
back in the seat and regarded her charge complacently, with
drooping eyelids. As they turned into Mulberry her face was a
symbol of smug content. She felt certain now of a manageable wife
for Casa Di Bello. But the imperious tug she gave the brass bell
handle of Casa Di Bello sounded the knell of her vivid hopes. The
door opened, and she looked into the awe-struck face of Angelica.
With difficulty the cook found speech for the terrible news: Signor Di
Bello gone to church to be married—and to Juno the Superb! Yes,
yes; the Neapolitan pig! At that very moment they must be standing
at the altar of San Patrizio! Oh, the grand feast that awaited them!
See, there was the table all laid! Ah, such wine, such fruit! All there
under the fine white cloth! Soon they would be back from the church,
and the house would be full of guests eating and drinking, for he had
invited the first families of the Torinesi, Milanesi, and Genovesi,
besides many swine from the south. And all for a Neapolitan pig!
Santissima Vergine!
Marianna felt that she would like to throw herself at this pig’s feet
and kiss them in the joy of her deliverance, while Carolina gave play
to her rage in a storm of anathema against her brother and the
singer. In the thick of her onset—all rituals of conduct torn to shreds
—the door bell jingled tragically. With bated breath, Angelica turned
the knob, and Carolina struck a pose of disdain in the hallway. As the
door opened a chorus of greetings and happy auguries came from a
group of men and women at the threshold, all in their sprucest
Sunday array. They were the first lot of invited guests, and would
have swarmed in, but Carolina ordered them back.
“We have come to the wedding feast,” they protested. “Signor Di
Bello has bidden us.”
“Begone, you ragabash and bobtail!” said Carolina, and she
slammed the door in their faces.
CHAPTER XVIII
AT THE ALTAR OF SAN PATRIZIO