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About the Authors
larry p. ritzman is Professor Emeritus at the Ohio State University and Professor
Emeritus at Boston College. While at the Ohio State University, he served as department
chairman and received several awards for both teaching and research, including the
Pace Setters’ Club Award for Outstanding Research. While at Boston College, he held
the Thomas J. Galligan, Jr. chair and received the Distinguished Service Award from
the School of Management. He received his doctorate at Michigan State University,
having had prior industrial experience at the Babcock and Wilcox Company. Over
the years, he has been privileged to teach and learn more about operations manage-
ment with numerous students at all levels—undergraduate, MBA, executive MBA, and
doctorate.
Particularly active in the Decision Sciences Institute, Larry has served as council
coordinator, publications committee chair, track chair, vice-president, board member,
executive committee member, doctoral consortium coordinator, and president. He was
elected a Fellow of the Institute in 1987 and earned the Distinguished Service Award
in 1996.
Larry’s areas of particular expertise are service processes, operations strategy, pro-
duction and inventory systems, forecasting, multistage manufacturing, and layout. An active
researcher, Larry’s publications have appeared in such journals as Decision Sciences,
Journal of Operations Management, Production and Operations Management,
Harvard Business Review, and Management Science.

lee j. krajewski is Professor Emeritus at the Ohio State University and Professor
Emeritus at the University of Notre Dame. While at the Ohio State University, he
received the University Alumni Distinguished Teaching Award and the College of
Business Outstanding Faculty Research Award. He initiated the Center for Excellence
in Manufacturing Management and served as its director for four years. In addition,
he received the National President’s Award and the National Award of Merit of
the American Production and Inventory Control Society. He served as president of
the Decision Sciences Institute and was elected a Fellow of the Institute in 1988. He
received the Distinguished Service Award in 2003.
Lee received his Ph.D. from the University of Wisconsin. Over the years, he has
designed and taught courses at both graduate and undergraduate levels on topics such
as operations strategy, introduction to operations management, operations design,
project management, and manufacturing planning and control systems.
Lee served as the editor of Decision Sciences, was the founding editor of the Journal
of Operations Management, and has served on several editorial boards. Widely pub-
lished himself, Lee has contributed numerous articles to such journals as Decision
Sciences, Journal of Operations Management, Management Science, Production and
Operations Management, Harvard Business Review, and Interfaces, to name just a few.

manoj k. malhotra is the Jeff B. Bates Professor and Chairman of the

Management Science Department at the Moore School of Business, University of South
Carolina (USC), Columbia. He holds an engineering undergraduate degree from the
Indian Institute of Technology (IIT) Kanpur, India, and a Ph.D. in operations man-
agement from the Ohio State University. He is certified as a Fellow of the American

vii
viii About the Authors

Production and Inventory Management Society (CFPIM), and has conducted seminars
and consulted with John Deere, Metso Corporation, Phelps Dodge, Sonoco, UCB
Chemicals, Milliken, and Verizon, among others. Manoj has won several teaching
awards, including the Michael J. Mungo Outstanding Graduate Teaching Award in
2006 from the University of South Carolina and the Alfred G. Smith Jr. Excellence in
Teaching Award in 1995 from the Moore School of Business.
Manoj’s research has thematically focused on the deployment of flexible resources
in manufacturing and service firms, and on the interface between operations and
supply chain management and other functional areas of business. His work on these
and related issues has been published in refereed journals, such as Decision Sciences,
European Journal of Operational Research, IIE Transactions, Journal of Operations
Management, OMEGA, and Production and Operations Management. Manoj is cur-
rently an associate editor of Decision Sciences and Journal of Operations Management.

robert d. klassen is an Associate Dean and Professor of Operations Management

at the Richard Ivey School of Business, University of Western Ontario. He also holds
the Magna International Inc. Chair in Business Administration. Before earning his
doctorate from the University of North Carolina at Chapel Hill, Rob worked as an
environmental engineer in the steel industry, following earlier experience in the con-
sumer products and petroleum sectors.
Since joining Ivey in 1995, Robert has enjoyed teaching students at all levels,
including undergraduate, MBA, executive MBA, and doctoral students. He has devel-
oped and delivered courses in operations management, operations strategy, service
management, management of technology, and most recently, sustainable development.
Robert has also written more than three dozen teaching cases to help students
bridge from research to teaching, concept to application, and theory to practice. His
research interests focus on exploring the challenges for and linkages between supply
chain management and the natural environment, encompassing both better process
design and management practices. His research has been published in Management
Science, Journal of Operations Management, Academy of Management Journal, and
Production and Operations Management, among others. He has also served as the
chair of the operations management division of the Academy of Management, and
currently serves as an associate editor for the Journal of Operations Management and
Production and Operations Management.
Brief Contents
Preface xv

Chapter 1 Creating Value Through Operations 1

Chapter 2 Supply Chain Management 27
Chapter 3 (More) Sustainable Supply Chains and Humanitarian Logistics 62
Chapter 4 Process Configuration 84
Chapter 5 Capacity 116
Supplement 5S Waiting Lines 154
Chapter 6 Inventory Management 175
Chapter 7 Quality and Process Improvement 208
Chapter 8 Lean Systems 252
Chapter 9 Managing Projects 279
Chapter 10 Location and Layout 307
Chapter 11 Managing Demand and Forecasting 344
Chapter 12 Operations Planning and Scheduling 379
Chapter 13 Resource Planning 407

Name Index 436

Subject Index 438

Companion Website Assets

Supplemental Topics
Supplement A Decision Making
Supplement B Financial Analysis
Supplement C Work Measurement
Supplement D Learning Curve Analysis
Supplement E Computer-Integrated Manufacturing
Supplement F Acceptance Sampling Plans
Supplement G Simulation
Supplement H Special Inventory Models
Supplement I Linear Programming
Supplement J Operations Scheduling
Supplement K Master Production Scheduling
Supplement L Appendix: Normal Distribution

ix
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Contents
Preface xv Chapter 4 Process Configuration 84
What is Process Management? 87
Chapter 1 Creating Value Through
Four Key Process Decisions 87
Operations 1 Managerial Practice
Process View 3 eBay 96
Supply Chain View 7 Strategic Alignment 99
Customer Value and Competitive Priorities 11 Process Analysis 101
Managerial Practice Developing a Better Process 106
Using Operations for Profit at Costco 12 Process Configuration and Sustainability 109
Trends in Operations Management 17 Equation Summary 110
Operations Strategy as a Pattern of Chapter Highlights 110
Decisions 21 Solved Problems 111
Equation Summary 23 Problems 112
Chapter Highlights 23 Notes for Chapter 115
Solved Problem 24
Problems 25 Chapter 5 Capacity 116
Notes for Chapter 26 Capacity and Process Choice 118
Measuring Capacity 118
Chapter 2 Supply Chain Management 27 Inventory 123
Supply Chain Strategies 30 Variability 125
Measures of Supply Chain Performance 37 Strategically Managing Capacity 129
Supplier Relationship Process 42 Capacity Timing and Economics 136
Managerial Practice Managerial Practice
Building a Supply Chain for the Dreamliner 47 Expansionist Strategy for Capacity in the Ethanol Industry 137
Order Fulfillment Process 50 Planning for Long-Term Capacity 140
Customer Relationship Process 52 Tools for Capacity Planning 142
Supply Chain Dynamics 53 Capacity and Sustainability 144
Equation Summary 57 Equation Summary 144
Chapter Highlights 57 Chapter Highlights 145
Solved Problems 58 Solved Problems 146
Problems 59 Problems 149
Notes for Chapter 61 Notes for Chapter 153

Chapter 3 (More) Sustainable Supply supplement 5S Waiting Lines 154

Chains and Humanitarian Why Have Waiting Lines? 155
Structure of Waiting Lines 157
Logistics 62 Probability Distributions 161
Environmental Performance 65 Using Waiting-Line Models to Analyze
Managerial Practice Operations 163
Recycling at Hewlett-Packard and Sims Recycling 68 Decision Areas for Management 169
Social Performance 74 Equation Summary 170
Chapter Highlights 80 Supplement Highlights 171
Solved Problem 80 Solved Problems 171
Problems 81 Problems 172
Notes for Chapter 82 Notes for Chapter 174
xi
xii Contents

Chapter 6 Inventory Management 175 Chapter Highlights 275

Solved Problem 275
Inventory Concepts 177 Problems 276
Economic Order Quantity 183 Notes for Chapter 278
Inventory Control Systems 188
Managerial Practice Chapter 9 Managing Projects 279
Inventory Systems at Celanese 196
Careful Inventory Management Improves New Service or Product Development
Sustainability 199 Process 281
Equation Summary 200 Organizing Projects 283
Chapter Highlights 201 Planning Projects 284
Solved Problems 201 Managerial Practice
Problems 205 Despite Project Delays, Bridge Retrofit a Modern-Day
Notes for Chapter 207 Miracle 293
Monitoring and Controlling Projects 299
Chapter 7 Quality and Process Sustainability as a Key Project Objective 300
Equation Summary 301
Improvement 208
Chapter Highlights 301
Quality: A Management Philosophy 210 Solved Problem 302
Customer Satisfaction: Definitions of Problems 303
Quality 212 Notes for Chapter 306
Costs of Quality 215
Employee Involvement 216 Chapter 10 Location and Layout 307
Managerial Practice
Quality and Performance at Steinway & Sons 217 Factors Affecting Location Decisions 309
Continuous Improvement 218 Locating a Single Facility 312
Systematically Improving Quality 220 Managerial Practice
Statistical Process Control 225 Location Challenges at Starbucks 313
Constructing SPC Charts 231 Locating a Facility Within a Network of
Process Capability 236 Facilities 317
International Standards 239 Layout Planning within a Facility 319
Equation Summary 241 Designing Flexible-Flow Layouts 322
Chapter Highlights 242 Designing Line Process Layouts 327
Solved Problems 242 Location Offers a Means to Improve
Problems 247 Sustainability 332
Notes for Chapter 251 Equation Summary 333
Chapter Highlights 333
Solved Problems 334
Chapter 8 Lean Systems 252
Problems 339
Just-In-Time Philosophy 254 Notes for Chapter 343
Leaner Supply Chains 256
Process Characteristics of Lean Systems 258 Chapter 11 Managing Demand and
Designing Lean System Layouts 263
The Kanban System 265
Forecasting 344
Managerial Practice Demand Patterns 346
Lean Systems at the University of Pittsburgh Medical Managing Demand 347
Center Shadyside 268 Designing the Forecasting System 349
Value Stream Mapping 269 Judgment Methods 351
Implementation Challenges 272 Causal Methods: Linear Regression 352
Integrating Sustainability into Lean Time-Series Methods 355
Systems 274 Choosing a Time-Series Method 363
Equation Summary 275 Using Multiple Techniques 367
 Contents xiii

Demand Management and Forecasting Managerial Practice

Underpin Sustainability 368 Material Requirements Planning at Winnebago
Managerial Practice Industries 424
Combination Forecasts and the Forecasting Process 369 Resource Planning for Service Firms 425
Equation Summary 369 Chapter Highlights 428
Chapter Highlights 370 Solved Problems 428
Solved Problems 371 Problems 431
Problems 375 Notes for Chapter 435
Notes for Chapter 378
Name Index 436
Chapter 12 Operations Planning and
Subject Index 438
Scheduling 379
The Purpose of a Sales and Operations Plan 382 Companion Website Assets
Sales and Operations Plans 382
The Planning Process 385 Supplemental Topics
Using Software to Assist With Planning 387
Implementing the Operations Plan: Supplement A Decision Making
Scheduling 389 Supplement B Financial Analysis
Managerial Practice Supplement C Work Measurement
Scheduling of Resources at Air New Zealand 392
Supplement D Learning Curve Analysis
Chapter Highlights 398
Solved Problems 398 Supplement E Computer-Integrated Manufacturing
Problems 402 Supplement F Acceptance Sampling Plans
Notes for Chapter 406 Supplement G Simulation
Supplement H Special Inventory Models
Chapter 13 Resource Planning 407
Supplement I Linear Programming
Enterprise Resource Planning 409
Supplement J Operations Scheduling
Material Requirements Planning 410
Planning Factors 418 Supplement K Master Production Scheduling
Outputs from Mrp 421 Supplement L Appendix: Normal Distribution
This page intentionally left blank
Preface
N e w to the F ourth Canadian Edition
As this fourth Canadian edition was developed, my primary emphasis was to expand
and further refine two critical themes for operations management: the critical role that
operations managers play in the design and execution of competitive supply chains,
and the pivotal importance of operations in the creation of customer value. Moreover,
this edition also better captures and reinforces the importance of effective processes for
service firms. Finally, to sharpen student study, Learning Objectives are summarized
at the outset of each chapter, along with corresponding entries within each chapter.
More specifically, highlights of new sections and changes to the fourth Canadian
edition include the following:
● Chapter 1, “Creating Value Through Operations,” includes several updated
Canadian examples, and better illustrates the match of six competitive priorities
to four core supply chain processes, including customer relationship, order
fulfillment, supplier relationship process, and new service development.
Finally, a revised conceptual model is presented to better emphasize both the
importance of process execution, and the linkage among chapters in the book.
● Chapter 2, “Supply Chain Management,” continues to be placed at the front
of the book to emphasize the central and critical role of supply chains for
many firms. To reflect the international nature of many supply chains, a new
vignette has been developed that highlights the complexity of a familiar brand
name: Nikon. This chapter has also been restructured to flow from a strategic
understanding, to measures of supply chain performance, and finally, to details
of enhancing supplier relationships and then customer relationships. Finally,
two new tools are presented: supplier preference matrix, and breakeven
analysis for make-or-buy decisions.
● Chapter 3, “(More) Sustainable Supply Chains and Humanitarian Logistics,”
is brand new to this edition, and explores a topic of growing importance to
operations managers. The opening vignette explores the responses of Canadian
retail firms in the garment industry to challenges in Bangladesh. In addition
to the social aspects of supply chains, this chapter considers environmental
performance, including reverse supply chains and energy-efficient routing.
Finally, the chapter closes with a description of how operations managers can
design humanitarian logistics to respond to natural and human-made disasters.
● Chapter 4, “Process Configuration,” introduces a new visual tool, “Swim Lane
Flowchart,” to clarify the important interconnections between dependent but
separate processes. In addition, importance of developing a robust process is
now explicitly emphasized in the section “Developing a Better Process.”
● Chapter 5, “Capacity,” uses an entirely new process illustration—the
familiar situation of issuing student ID cards—to illustrate the definition and
measurement of capacity as well as how dependent process steps interact to
limit process output. The key concepts of process bottlenecks are also refined
to consider different operational scenarios.
● Chapter 6, “Inventory Management,” now opens with a vignette about a cruise
ship to illustrate the broad relevance of inventory to service firms. This chapter

xv
xvi Preface

also provides a clearer, step-by-step process for arriving at a reorder point

for an inventory control systems where demand is uncertain. (This expansion
is consistent with the book’s overall emphasis on managing the challenges
induced by system variability.)
● Chapter 7, “Quality and Process Improvement,” is now slightly shorter, with
the focus on moving students more quickly from underlying philosophies of
quality on to the key tools that enable process improvement. As reflected in
the opening vignette, attention is often directed to service examples, such as
health care or insurance, to emphasize the critical importance of quality in
all processes. Last, the discussion of multiple forms of certification has been
brought up to date.
● Chapter 8, “Lean Systems,” now emphasizes that linkages between a just-in-time
philosophy and kaizen are central to operate leaner processes. Leaner supply
chains are shown to be a logical extension of leaner internal processes.
● Chapter 9, “Managing Projects,” now includes a section of new service and
product development, as many firms treat these processes as projects. The
sections on project risk and monitoring and controlling projects also have been
modified to highlight the importance of managing variability in projects.
● Chapter 10, “Location and Layout,” begins by noting the challenges that
Canadian firms such as Canadian Tire and Tim Hortons face when identifying
future locations. While GIS remains important, its discussion has been
streamlined, and break-even between alternative locations has been dropped to
tighten the range of topics covered.
● Chapter 11, “Managing Demand and Forecasting,” now explicitly integrates
the use of Excel spreadsheets to develop a regression-based forecast of demand.
Excel formulas are used for causal forecasts and projecting a trend in demand.
● New student problems. Many of the end-of-chapter assignment problems
from the third edition have been replaced, with over 50 percent being new,
compared to the previous edition.
● The companion website. This online resource continues to evolve to reflect
the connected needs of our students. As in the previous edition, a key focus is
the streamlined presentation of chapter-specific materials, such as video cases,
assignment problems, full-colour supplements, and commercial software.

M o t i vat ion and O bjec tives

As with previous Canadian editions, this book continues to focus on meeting the need
in many educational settings for a shorter book that has strong coverage of critical
concepts and retains a rich set of pedagogical features. Most students who take an
operations management course are pursuing a business degree in functional areas other
than operations or are seeking to develop a general management perspective.
Business students—who will develop into our future managerial leaders—need
to understand the interrelated processes of a firm, which connect operations with all
other functional areas of an organization. Just as importantly, it is also critical that
they understand that supply chains represent the complex interconnection of processes
of multiple firms. For courses that prefer a strong pedagogical structure, a number of
instructional features clarify and reinforce student learning (learning objectives; clear,
short definitions; step-by-step examples of quantitative techniques; numerous solved
problems; and end-of-chapter assignment problems).
 Preface xvii

This relatively concise textbook conveys the essential ideas and techniques with-
out the encyclopedic volume of information found in many others. Yet the book is
written to simultaneously fit the perspectives, strengths, and pedagogical approaches
of individual faculty. Consequently, many advanced concepts, tools, and topics that
faculty may wish to explore in greater detail are included as full-length, full-colour
supplements in the companion website, along with experiential exercises, discussion
questions, and cases.
As a starting point, this edition of Foundations of Operations Management draws
much from the newly updated U.S. tenth edition. However, several shifts in emphasis
and development are notable. First, the linkages between customer value and opera-
tions management are more strongly stressed and developed, beginning with Chapter 1,
and then carried throughout. Operations management creates value through the effec-
tive and efficient management of processes, including services, products, and process
design. The book presents a remarkable array of interesting Canadian companies that
leverage their operations as an important competitive weapon as they battle in the
global arena.
Second, the central emphasis on process management now focuses on services. This
is a clear message behind the use of service vignettes in many chapters, as well as more
detailed aspects such as service productivity, capacity measurement, customer involve-
ment, or process improvement. To support this broader emphasis, supply chain man-
agement and four core processes are emphasized in the first two chapters. The notion
is frequently reinforced that operations management involves coordination across the
firm and the supply chain, and quantitative tools can be used to help managers make
better operating decisions.
Of critical importance, the process management triangle in Chapter 5 conceptually
links the three critical factors of capacity, customer queues/inventory, and variability.
The configuration of service and manufacturing processes—whether a project, batch,
line, or continuous process—implicitly combines these factors to deliver customer
value. However, it is the last factor, namely variability, that is most often overlooked
by (and not intuitive for) managers seeking to control and improve processes. As a
result, the book returns to this idea repeatedly in chapters and supplements when
considering topics such as quality, lean systems, waiting lines, project management.
Finally, the central role of operations in creating a more environmentally
and socially sustainable organization is a recurring theme throughout the book.
Environmental and social concerns are not unique to one region, one industry, or
one type of firm; instead, these issues cut across the entire supply chain. For example,
concerns about hazardous materials in products, large volumes of used products and
waste in both developing and developed countries, supplier working conditions, and
sizeable carbon footprints are but a few of the issues that have attracted media scru-
tiny, and, more recently, managerial attention. Framed around the environmental and
social bottom lines, a stronger emphasis has been created in this edition by developing
an expanded chapter that treats these aspects in a unified manner.

C h a pter Overview
The text is organized so that several basic strategic issues are covered before delving
deeper into a range of operational decisions.
Chapter 1, “Creating Value Through Operations,” sets the tone for the text.
Organizations comprise many processes, and operations principles and techniques
are particularly well suited for their management and analysis. The central mes-
sage—the contribution of operations management and effective processes to value—is
xviii Preface

emphasized. This perspective, which is carried forward throughout the text, appeals
to students regardless of their academic major. This chapter also establishes the basic
principles of operations strategy and four core processes that tie together all functions
(and the broader supply chain), their primary purpose being the creation of customer
value.
Chapter 2, “Supply Chain Management,” extends the consideration of operations
beyond a single site or firm to operational linkages between firms. Both efficient and
responsive supply chains are covered. Next, measures for supply chain performance
also are summarized. Reiterating the importance of processes, this chapter delves
deeper into operationalizing the four core processes, namely those that manage sup-
plier relationships, order fulfillment, customer relationships, and service or product
improvement.
Chapter 3, “(More) Sustainable Supply Chains and Humanitarian Logistics,”
explores how operations can contribute to the environmental and social bottom lines
that every firm must manage. Whether considering workforce practices at suppliers,
recycling of used products from customers, or reducing the energy consumed in opera-
tional processes, management must actively employ operational concepts. In addition,
operations is critical to delivering humanitarian supplies to areas ravaged by natural
or human-made disasters.
Chapter 4, “Process Configuration,” provides more insight into the management
and fundamental structure of processes. Four key decision areas, specifically customer
involvement, process structure, capital intensity, and flexibility, are used as a starting
point to process configuration. Decisions about customer interaction are particularly
critical for service processes. And just as important, the linkages among these four
areas are stressed. The chapter closes with a systematic approach to improving pro-
cesses and with linkages to greener processes.
Chapter 5, “Capacity,” begins our integrative development of critical process levers
that every manager must understand. The process management triangle serves as the
conceptual framework that links capacity, variability, and queues/inventory, which are
covered in greater detail in this chapter and the two that follow. Process bottlenecks,
economies and diseconomies of scale, capacity strategies, theory of constraints, and a
systematic approach to capacity planning are also highlighted. At the end of this chap-
ter, Supplement 5S “Waiting Lines,” bolsters the discussion on variability by specifically
considering waiting lines. If desired by individual faculty, several related supplements
are available online in the companion website to deepen student understanding of
related topics such as financial analysis, work measurement, and learning curves.
Chapter 6, “Inventory Management,” identifies the functions, costs, and manage-
rial actions that can be taken to effectively use or reduce inventory. Basic inventory
models and control systems are covered, and a number of quantitative examples walk
students through the application of these concepts. More advanced inventory models
are treated in the supplements available online in the companion website.
Chapter 7, “Quality and Process Improvement,” begins with a quick overview
of quality management through the lenses of three quality gurus and underscores the
multifaceted definition of quality as an aspect of customer value. Quality includes
both high performance design and conformance, which, when coupled with tight toler-
ances, yields services and products with low variability. Under the conceptual umbrella
of total quality management, statistical process control techniques and a number of
quality improvement tools are detailed. More advanced students can study acceptance
sampling using the supplement available online in the companion website.
Chapter 8, “Lean Systems,” draws together and reinforces concepts discussed in
preceding chapters and re-emphasizes the central importance of the process management
 Preface xix

triangle from the fifth chapter. Quality at the source, elimination of waste, small lot
sizes, pull flow of materials, process visibility, and continuous improvement are linked
and illustrated in both manufacturing and service settings. The overarching message is
one of integrating mutually supportive elements to implement highly efficient methods
for processes, firms, and supply chains.
Chapter 9, “Managing Projects,” has substantial managerial material regarding
project management. The material follows the introduction to projects as one type of
process in the chapter about process configuration. However, as is noted in Chapter 1,
projects are important for both developing and implementing operations strategy.
Here, the basic aspects of project management are considered, both qualitative and
quantitative. New service and product development processes are also considered, as
many are managed as projects. An understanding of these issues by students is impor-
tant regardless of their functional major, and project management tools will undoubt-
edly be used by many throughout their careers.
Chapter 10, “Location and Layout,” continues the book’s study of decisions that
require long-term commitments about the process. Students can use both qualitative
approaches and quantitative tools to make important decisions about the location of
new facilities, as well as how to organize processes within a facility. Faculty also can
encourage their students to explore the managerial insights from global positioning
systems for making location decisions (using MapPoint software available online in the
companion website). In addition, related quantitative topics such as linear program-
ming and simulation are addressed in supplements in the companion website.
Chapter 11, “Managing Demand and Forecasting,” begins with an overview of
multiple options available to managers to adjust or shift customer demand. From
there, the remainder of the chapter considers a wide variety of forecasting approaches,
including some use of spreadsheet tools. While forecasting can be used for strategic
planning and tactical decisions, the primary emphasis here is on the latter. This chapter
also includes information on combination forecasts.
Chapter 12, “Operations Planning and Scheduling,” brings together planning for
workforce levels across multiple service and product processes and, where possible,
inventory holdings. The planning process is explored using straightforward spread-
sheet tools. Scheduling in small-batch processes, flow shops, and service operations
are each treated in turn. This approach allows students to understand the whole con-
tinuum of planning levels of output and workforce levels over time. The chapter closes
with a brief discussion of priority rules for scheduling and performance measurement.
Chapter 13, “Resource Planning,” begins with an overview of enterprise resource
planning systems, given their importance to practice. Moving one level lower, materi-
als requirements planning is detailed, followed by an extension of these concepts to a
bill of resources for service firms and virtual organizations. These final sections also
address resources such as financial assets, human resources, equipment, and invento-
ries. If desired, the topic of master production scheduling can be further explored using
an online supplement in the companion website.

Sp e cial Features o f the Book

Many features are included to stress foundational concepts and to support the overall
philosophy of any operations management course.
● Central Role of Processes. The book focuses on processes—the fundamental
unit of work in all organizations. It is all about processes! This unifying theme
for service and manufacturing organizations builds bridges between chapters
and opens up the topics in operations to all students, regardless of their
xx Preface

majors or planned career paths. Simultaneously, the focus on processes can

create better “buy-in” for a course in operations management because students
understand that processes underlie activities throughout the organization, not
just in one functional area.
● Learning Objectives. Each chapter begins by highlighting a small number of
key points that the students will explore in detail. Later in the chapter, each
learning objective is tied to a particular subsection of the material presented to
reinforce the major take-aways.
● Streamlined. The textbook is designed to have just 13 chapters that can be
effectively covered in a single term. Supplemental materials such as short cases
and experiential exercises, as well as commercial software, are available online
in the companion website.
● A Balanced Perspective. An effective operations management textbook should
address both the “big picture” strategic issues and also the analytic tools
that facilitate decision making. It is not just about “concepts” or just about
“numbers”—it’s about both dimensions. This edition continues the expansion
of services as the basis for many process examples.
● Integration of Sustainability, including both environmental and social issues,
into the strategy underlying operations as well as the management of processes.
Humanitarian logistics is also introduced as a brand new topic. Overall, these
rapidly emerging areas resonate with our students, and can be linked to customer
value.
● Chapter-Opening Vignettes and Managerial Practices. To help stimulate
student interest, each chapter opens by profiling how real, world-class
companies apply specific process issues. A second example illustrates how
companies deal—either successfully or unsuccessfully—with operations issues
as they run their operations. Collectively, these highlight strong examples of
best practices from notable Canadian and international firms.
● Pedagogical Structure. Colourful and instructive formatting is used throughout
the book and online in the companion website. Full-colour figures, clear
explanations, step-by-step examples of quantitative techniques, solved
problems, and numerous homework exercises assist students with identifying
key concepts, understanding the linkages among concepts, solving problems,
and using powerful decision-making tools.
● Examples. Numerous examples throughout each chapter are a popular
feature and are designed to help students understand the quantitative material
presented. Each concludes with a “Decision Point,” which focuses on the
decision implications for managers.
● Across the Organization. Each chapter begins with a brief listing of how the
topics that follow are important to professionals throughout the organization,
including linkages to accounting, finance, human resources, and marketing.
● Margin Items and End-of-Chapter Formulas. Margin items have been
simplified to focus on key definitions for quick student reference, and all of
the important quantitative formulas are summarized in one section.
● Solved Problems. At the end of each chapter, detailed solutions demonstrate
how to solve problems with the techniques presented in the chapter. The
solved problems reinforce basic concepts and serve as models for students to
refer to when doing the other problems that follow.
 Preface xxi

T e aching and Learning S upport

Companion Website—www.pearson.ca/ritzman
The book’s companion website offers a considerable amount of additional assis-
tance to students.
● Video cases. Cases and video footage show how operations management can
be used to solve real-world problems. For example, one case demonstrates
how Southwest Airlines copes with gate turnaround operations and the
passenger boarding process. Other examples include Autoliv for lean systems,
and Clif Bar & Company for supply chain design and sustainability.
● Cases. A wide range of cases can either serve as a basis for classroom
instruction or provide an important capstone problem to each chapter. These
challenge students to grapple with the issues presented in a chapter in a less
structured and more comprehensive way. A number of these cases can be used
as in-class exercises without prior student preparation.
● Experiential learning exercises. Exercises are offered for most chapters,
including Supply Chain Management (Sonic Distributors), Capacity (Min-Yo
Garment Company), Inventory Management (Swift Electronic Supply), and
Quality and Process Improvement (SPC with a Coin Catapult). Each of these
actively involves students, has been thoroughly tested in class, and has proven
to be a valuable learning tool.

F o r Instru ctors
Instructor’s Solutions Manual
The Instructor’s Solutions Manual, created by the authors to ensure its currency and
accuracy, provides complete solutions to all problems as well as notes for every case
and experiential exercise. Each case includes a brief synopsis, a description of the
purposes for using the case, recommendations for analysis and goals for student learn-
ing from the case, and detailed teaching suggestions for assigning and discussing the
case with students. The Instructor’s Solutions Manual is available for download from
Pearson Canada’s online catalogue.

Instructor’s Resource Manual

The Instructor’s Resource Manual features detailed instructor notes and teaching tips
for all the textbook and supplemental chapters. It is available for download from
Pearson Canada’s online catalogue.

Test Item File

This resource offers an array of questions and problems ranging from easy to difficult.
It includes true/false, multiple-choice, short-answer, and essay questions. The Test Item
File is available for download from Pearson Canada’s online catalogue.

TestGen
A computerized test bank containing true/false, multiple-choice, short-answer, and
problem questions for each textbook and supplemental chapter is available in the latest
version of TestGen software. This software package allows instructors to custom-
design classroom tests. Instructors can edit, add, or delete questions from the test
banks; edit existing graphics and create new graphics; analyze test results; and organize
a database of tests and student results. The TestGen is available for download from
Pearson Canada’s online catalogue.
xxii Preface

PowerPoint Presentations
This comprehensive set of PowerPoint slides illustrates and builds upon key concepts in
the text. The slides are available for download from Pearson Canada’s online catalogue
and on the Instructor’s Resource CD-ROM.

Instructor’s Resource Manual

This valuable, time-saving resource provides instructors with electronic files for
the complete Instructor’s Solutions Manual, Test Item File, TestGen, PowerPoint
Presentations, and Instructor’s Resource Manual. Offering these materials as MS Word,
PowerPoint, and PDF files (where appropriate) allows instructors to customize
portions of the material to enhance their students’ classroom learning experience.

Learning Solutions Managers

Pearson’s Learning Solutions Managers work with faculty and campus course designers
to ensure that Pearson technology products, assessment tools, and online course materials
are tailored to meet your specific needs. This highly qualified team is dedicated to
helping schools take full advantage of a wide range of educational resources, by assisting
in the integration of a variety of instructional materials and media formats. Your
local Pearson Education sales representative can provide you with more details on this
service program.

Pearson Custom Library

For enrollments of at least 25 students, you can create your own textbook by choosing
the chapters that best suit your own course needs. To begin building your custom text,
visit www.pearsoncustomlibrary.com. You may also work with a dedicated Pearson
Custom editor to create your ideal text—publishing your own original content or
mixing and matching Pearson content. Contact your local Pearson Education sales
representative to get started.

CourseSmart for Instructors

CourseSmart goes beyond traditional expectations—providing instant, online access
to the textbooks and course materials you need at a lower cost for students. And even
as students save money, you can save time and hassle with a digital eTextbook that
allows you to search for the most relevant content at the very moment you need it.
Whether it’s evaluating textbooks or creating lecture notes to help students with dif-
ficult concepts, CourseSmart can make life a little easier. See how when you visit www
.coursesmart.com/instructors.

For Students
Besides having access to study plans in the companion website, students can find a
wealth of other resources within the companion website, including the following:
● eText
● Assignment Questions
● Glossary Flashcards
● Powerpoints
● Equation Summaries
● Discussion Questions
● Cases
● Tours
 Preface xxiii

● Videos
● Experiential Exercises
● Extend LT Simulations

CourseSmart for Students

CourseSmart goes beyond traditional expectations—providing instant, online access to
the textbooks and course materials you need at an average savings of 60 percent. With
instant access from any computer and the ability to search your text, you’ll find the
content you need quickly, no matter where you are. And with online tools like high-
lighting and note-taking, you can save time and study efficiently. See all the benefits at
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Ack n owl edg ments

I wish to thank the many people at Pearson Canada who inspired this project and
made up the publishing team. My deeply felt thanks to Megan Farrell, who supervised
the overall project, and Patti Sayle, who kept me moving forward on the manuscript
revisions with many helpful suggestions and feedback. Thanks also to Kimberly Blakey
for her work in coordinating the production of this text.
I also wish to thank my Canadian colleagues who provided very useful feedback
and guidance for this edition. They include the following:
● Mohammed Fazle Baki, University of Windsor
● Kalinga Jagoda, Mount Royal University
● Mats Gerschman, University of British Columbia
● Neil Bishop, Fanshawe College
● Paul Callaghan, Acadia University
I am much indebted to my colleagues at the University of Western Ontario, who
have greatly influenced and developed my thinking on the teaching of operations
management to business students. In particular, Fraser Johnson, Larry Menor, Dave
Sparling, Stephan Vachon and David Wood have provided much-needed discussion
and feedback to help me further refine this edition.
Finally, I thank my family for their patience during the many long hours preparing
this book. My wife, Lorraine, provided the love and encouragement that I needed to
complete this edition.
Robert D. Klassen
Ivey Business School
Western University
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