Tai Lieu Chat Luong This page intentionally left blank E1FFIRS01.qxd 8/5/10 11:37 AM Page i E1FFIRS01.qxd 8/5/10 11:37 AM Page ii E1FFIRS01.qxd 8/5/10 11:37 AM Page iii TH EDITION Operations Management Creating Value Along the Supply Chain Roberta S Russell Professor Virginia Polytechnic Institute and State University Bernard W Taylor III R B Pamplin Professor Virginia Polytechnic Institute and State University JOHN WILEY & SONS, INC E1FFIRS01.qxd 8/5/10 11:37 AM Page iv To my mother, Margaret Snead, with appreciation for your love and support To my mother, Jean V Taylor, and in memory of my father, Bernard W Taylor, Jr., with love and appreciation Opener Photo Credits Repeat chocolate chip © Geoffrey Holman/iStockphoto, Chapter © Yin Yang/iStockphoto, Chapter © ECKEHARD SCHULZ/AP/Wide World Photos, Chapter © H Mark Weidman Photography/ Alamy, Chapter © Ina Peters/iStockphoto, Chapter © Patrik Urban/Alamy, Chapter © Yaiza Fernandez Garcia/iStockphoto, Chapter © Lyn Hughes/Corbis, Chapter © “Andersen Ross/Getty Images, Inc.”, Chapter © John O'Boyle/Star Ledger/Corbis, Chapter 10 © Norman Chan/iStockphoto, Chapter 11 © Jim West/ Alamy, Chapter 12 © “Spencer Platt/Getty Images, Inc.”, Chapter 13 © Julian Nieman/Alamy, Chapter 14 © Richard Levine/Alamy, Chapter 15 © H-Gall/iStockphoto, Chapter Opener 16 © mediablitzimages Limited/Alamy, Chapter 17 © Ei Katsumata/Alamy VP & EXECTUIVE PUBLIHSER EXECUTIVE EDITOR ASSISTANT EDITOR PRODUCTION SERVICES MANAGER PRODUCTION EDITOR EXECUTIVE MARKETING MANAGER CREATIVE DIRECTOR PRODUCTION MANAGEMENT SERVICES PHOTO EDITOR SENIOR EDITORAL ASSISTANT MEDIA EDITOR CENTER COVER PHOTO: BOTTOM INSET PHOTOS (left to right): COVER AND INTERIOR DESIGN George Hoffman Lise Johnson Sarah Vernon Dorothy Sinclair Anna Melhorn Karolina Zarychta Harry Nolan Elm Street Publishing Services Sarah Wilkin, Hilary Newman Chelsea Theis Elena Santa Maria © Brigitte Wegner/Getty Images, Inc © Norman Chan/iStockphoto; © Yaiza Fernandex Garcia/iStockphoto; © Julian Nieman/Alamy; © James L Stanfield/National Geographic/Getty Images, Inc; ©GoGo Images Corporation/Alamy James O’Shea This book was set in Times by Thomson Digital and printed and bound by Courier/Kendallville The cover was printed by Courier/Kendallville This book is printed on acid free paper Copyright © 2011 John Wiley and Sons, Inc All rights reserved No part of this publication, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201) 748-6011 Fax (201) 748-6008, website http://www.wiley.com/ go/permissions “Evaluation copies are provided to qualified academics and professionals for review purposes only, for use in their courses during the next academic year These copies are licensed and may not be sold or transferred to a third party Upon completion of the review period, please return the evaluation copy to Wiley Return instructions and a free of charge return shipping label are available at www.wiley.com/ go/returnlabel Outside of the United States, please contact your local representative.” ISBN-13 9780470525906 Printed in the United States of America 10 E1FFIRS01.qxd 8/5/10 11:37 AM Page v About the Authors Bernard W Taylor III and Roberta S Russell Bernard W Taylor III is the Pamplin Professor of Management Science and Head of the Department of Business Information Technology in the Pamplin College of Business at Virginia Polytechnic Institute and State University He received a Ph.D and an M.B.A from the University of Georgia and a B.I.E from the Georgia Institute of Technology He is the author of the book Introduction to Management Science (10th ed.) and co-author of Management Science (4th ed.), both published by Prentice Hall Dr Taylor has published over 80 articles in such journals as Operations Research, Management Science, Decision Sciences, IIE Transactions, Journal of the Operational Research Society, Computers and Operations Research, Omega, and the International Journal of Production Research, among others His paper in Decision Sciences (with P Y Huang and L P Rees) on the Japanese kanban production system received the Stanley T Hardy Award for its contribution to the field of production and operations management He has served as President of the Decision Sciences Institute (DSI) as well as Program Chair, Council Member, Vice President, Treasurer, and as the Editor of Decision Line, the newsletter of DSI He is a Fellow of DSI and a recipient of their Distinguished Service Award He is a former President, Vice-President, and Program Chair of the Southeast Decision Sciences Institute and a recipient of their Distinguished Service Award He teaches management science and production and operations management courses at both the undergraduate and graduate level He has received the University Certificate of Teaching Excellence on four occasions, the Pamplin College of Business Certificate of Teaching Excellence Award, and the Pamplin College of Business Ph.D Teaching Excellence Award at Virginia Tech Roberta S Russell is a Professor of Business Information Technology in the Pamplin College of Business at Virginia Polytechnic Institute and State University She received a Ph.D from Virginia Polytechnic Institute and State University, an M.B.A from Old Dominion University, and a B.S degree from Virginia Polytechnic Institute and State University Dr Russell’s primary research and teaching interests are in the areas of operations and supply chain management, service operations, scheduling, and quality She has published in Decision Sciences, IIE Transactions, International Journal of Production Research, Journal of Operations Management, IEEE Transactions, Annals of Operations Research, Computers and Operations Research, and others She is also coauthor of the Prentice Hall book Service Management and Operations Dr Russell is a member of DSI, ASQ, POMS, and IIE and a certified fellow of APICS She is past Vice President of POMS, past President of the Southwest Virginia Chapter of APICS and has held numerous offices in Southeast DSI She has received the Pamplin College of Business Certificate of Teaching Excellence, the University Certificate of Teaching Excellence, and the MBA Association’s Outstanding Professor Award She serves on the Education and Research Foundation Board of APICS, and is a certified supply chain management professional (CSCMP) Her consulting experience with IBM, AT&T, Dupont, Courtaulds, Xaloy, Northrup Grumman Shipbuilding and others brings a practical perspective into the classroom E1FTOC01.qxd 8/5/10 2:30 PM Page vi Brief Contents PART ONE: Operations Management Introduction to Operations and Supply Chain Management Operational Decision-Making Tools: Decision Analysis 33 S1 Quality Management Statistical Process Control S3 54 108 Operational Decision-Making Tools: Acceptance Sampling 148 Product Design 156 Service Design 189 Processes and Technology 226 Capacity and Facilities Design 257 S7 Human Resources S8 PART TWO: Operational Decision-Making Tools: Facility Location Models 297 315 Operational Decision-Making Tools: Work Measurement Project Management 348 366 Supply Chain Management 420 10 Supply Chain Management Strategy and Design 420 11 Global Supply Chain Procurement and Distribution 450 S11 Operational Decison-Making Tools: Transportation and Transshipment Models 475 12 Forecasting 495 13 Inventory Management 553 S13 14 Operational Decision-Making Tools: Simulation 590 Sales and Operations Planning S14 607 Operational Decision-Making Tools: Linear Programming 645 15 Resource Planning 678 16 Lean Systems 720 17 Scheduling 755 APPENDIX A—Normal Curve Areas 789 SOLUTIONS TO SELECTED ODD-NUMBERED PROBLEMS INDEX 798 790 E1FTOC01.qxd 8/5/10 2:30 PM Page vii Contents PART ONE: OPERATIONS MANAGEMENT Introduction to Operations and Supply Chain Management ■ Operations and Supply Chain Management for Chocolate ■ What Do Operations and Supply Chain Managers Do? The Operations Function ■ OM Dialogue: Mark Jackson, Marketing Manager The Evolution of Operations and Supply Chain Management Globalization The China Factor ■ The Balancing Act at New Balance India, The World’s Service Provider Productivity and Competitiveness Strategy and Operations Primary Task Core Competencies Order Winners and Order Qualifiers Positioning the Firm Competing on Cost Competing on Speed ■ Trader Joe’s Unique Strategy Competing on Quality Competing on Flexibility Strategy Deployment Policy Deployment Balanced Scorecard Operations Strategy Organization of this Text Learning Objectives of this Course Summary Summary of Key Terms Questions Problems Case Problem 1.1–Visualize This Case Problem 1.2–Whither an MBA at Strutledge? Case Problem 1.3–Weighing Options at the Weight Club References 1 6 10 12 13 14 17 17 18 18 19 19 19 20 21 21 21 21 23 25 25 26 26 27 27 28 30 30 31 31 SUPPLEMENT Operational Decision-Making Tools: Decision Analysis Decision Analysis With and Without Probabilities Decision Making Without Probabilities Decision Analysis With Excel Decision Analysis With OM Tools 33 33 34 36 37 Decision Making With Probabilities Expected Value of Perfect Information Sequential Decision Trees Summary Summary of Key Formulas Summary of Key Terms Solved Problems Problems Case Problem S1.1–Whither an MBA at Strutledge? Case Problem S1.2–Transformer Replacement at Mountain States Electric Service Case Problem S1.3–Evaluating Projects at Nexcom Systems References Quality Management ■ Quality Management at Mars What Is Quality? Quality from the Customer’s Perspective Dimensions of Quality for Manufactured Products Dimensions of Quality for Services Quality from the Producer’s Perspective A Final Perspective on Quality Quality Management System The Evolution of Quality Management ■ Applying Deming’s PDCA Cycle in Baldrige Award-Winning Schools and Hospitals Quality Tools Process Flowcharts Cause-and-Effect Diagrams Checksheets and Histograms Pareto Analysis Scatter Diagrams Process Control Charts and Statistical Quality Control TQM and QMS The Focus of Quality Management—Customers Quality Management in the Supply Chain Measuring Customer Satisfaction ■ Measuring Customer Satisfaction with “Voice of the Customer (VoC)” at Two Baldrige Award Winners The Role of Employees in Quality Improvement Kaizen and Continuous Improvement Quality Circles Process Improvement Teams ■ Customer Focus and Employee Empowerment in a Baldrige Award-Winning City Quality in Services 38 38 39 41 42 42 42 42 51 51 52 53 54 54 55 56 56 56 58 59 59 59 62 62 64 64 65 65 66 67 67 68 68 69 70 70 71 72 72 73 73 E1FTOC01.qxd 8/5/10 viii 2:30 PM Page viii Contents Quality Attributes in Services ■ Ritz-Carlton Hotels: Two-Time Baldrige National Quality Award Winner Six Sigma The Six Sigma Goal—3.4 DPMO ■ Motorola’s Six Sigma Quality The Six Sigma Process ■ Six Sigma Highlights Improvement Projects The Breakthrough Strategy: DMAIC ■ North Shore University Hospital: A Six Sigma Project Example Black Belts and Green Belts Design for Six Sigma Lean Six Sigma The Bottom Line—Profitability The Cost of Quality The Cost of Achieving Good Quality The Cost of Poor Quality Measuring and Reporting Quality Costs The Quality–Cost Relationship The Effect of Quality Management on Productivity Productivity Measuring Product Yield and Productivity The Quality–Productivity Ratio Quality Awards The Malcolm Baldrige Award Other Awards for Quality ■ Baldrige National Quality Award Winners: What It Takes ISO 9000 Standards Certification Implications of ISO 9000 for U.S Companies ■ ISO 9001 Certification at Monarcas Morelia ISO Registrars Summary Summary of Key Formulas Summary of Key Terms Solved Problems Questions Problems Case Problem 2.1–Designing a Quality-Management Program for the Internet at D4Q Case Problem 2.2–Quality Management at State University Case Problem 2.3–Quality Problems at the Tech Bookstores Case Problem 2.4–Product Yield at Continental Luggage Company References Statistical Process Control ■ Statistical Process Control at Mars and Hershey’s The Basics of Statistical Process Control SPC in Quality Management Quality Measures: Attributes and Variables 74 75 76 76 77 78 78 79 79 79 80 80 80 82 83 84 84 85 87 87 87 88 90 91 91 93 93 94 94 95 95 96 97 98 98 98 99 99 102 104 105 105 107 107 SPC Applied to Services Where to Use Control Charts Control Charts Control Charts for Attributes p-Chart ■ Using Control Charts for Improving Health-Care Quality c-Chart Control Charts for Variables Mean (x–) Chart Range (R-) Chart Using x–- and R- Charts Together Control Chart Patterns Sample Size Determination SPC with Excel and OM Tools Process Capability Process Capability Measures ■ Design Tolerances at Harley-Davidson Company Process Capability with Excel and OM Tools Summary Summary of Key Formulas Summary of Key Terms Solved Problems Questions Problems Case Problem 3.1–Quality Control at Rainwater Brewery Case Problem 3.2–Quality Control at Grass, Unlimited Case Problem 3.3–Improving Service Time at Dave’s Burgers References 108 109 110 110 116 117 119 119 122 123 124 125 126 127 130 131 132 133 133 133 134 135 135 145 146 147 147 SUPPLEMENT Operational Decision-Making Tools: Acceptance Sampling Single-Sample Attribute Plan Producer’s and Consumer’s Risks The Operating Characteristic Curve Developing a Sampling Plan with OM Tools Average Outgoing Quality Double- and Multiple-Sampling Plans Summary Summary of Key Terms Solved Problem Questions Problems Product Design 108 111 112 112 113 114 ■ Product Design at Mars The Design Process Idea Generation Feasibility Study ■ Pixar’s Creativity Rapid Prototyping and Concurrent Design 148 149 149 150 151 152 153 154 154 154 155 155 156 156 157 158 159 160 160 C  1, NC  Phoenix  1, NC  Louisville  1, NC  Memphis  1, Z  454 days Chapter 12 11 13 15 17 a Apr  8.67, May  8.33, Jun  8.33, Jul  9.00, Aug  9.67, Sep  11.0, Oct  11.00, Nov  11.00, Dec  12.00, Jan  13.33; b Jun  8.20, Jul  8.80, Aug  9.40, Sep  9.60, Oct  10.40, Nov  11.00, Dec  11.40, Jan  12.60; c MAD(3)  1.89, MAD(5)  2.43 a F4  116.00, F5  121.33, F6  118.00, F7  143.67, F8  138.33, F9  141.67, F10  135.00, F11  156.67, F12  143.33, F13  136.67; b F6  121.80, F7  134.80, F8  125.80, F9  137.20, F10  143.00, F11  149.00, F12  137.00, F13  142.00; c F4  113.95, F5  116.69, F6  125.74, F7  151.77, F8  132.4, F9  138.55; F10  142.35, F11  160.00, F12  136.69, F13  130.20; d 3-qtr MA: E  32.0, 5-qtr MA: E  36.4, weighted MA: E  28.05 a F4  276.67, F5  283.32, F6  303.33, F7  356.67, F8  393.33, F9  420.00; b F2  270.00, F3  278.00, F4  272.40, F5  275.92, F6  294.74, F7  317.79, F8  334.23, F9  357.38; c 3-sem MAD  61.33, exp smooth MAD  70.42 F11 (exp smooth)  68.6, F11 (adjusted)  69.17, F11 (linear trend)  70.22; exp smooth: E  14.75, MAD  1.89; adjusted: E  10.73, MAD  1.72; linear trend: MAD  1.09 a MAD  3.12; b MAD  2.98; c MAD  2.87 F13  631.22, E  26.30, E  289.33, biased low F1  155.6, F2  192.9, F3  118.2, F4  155.6 F9 (adjusted)  3,313.19, F9 (linear trend)  2,785.00; adjusted: MAD  431.71, E  2,522; linear trend: MAD  166.25 y  195.55 2.39x; fall  44.61 winter  40.13, spring  52.38, summer  70.34 E1BAPP.qxd 8/5/10 2:12 PM Page 795 Solutions to Selected Odd-Numbered Problems 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 F9  492.31, F9 (adjusted)  503.27; MAD  49.36 E  86.00, E  8.60, MAD  15.00, MAPD  0.08 UCL  718.14, LCL  718.84, no apparent bias a E  10.73, MAD  16.76, MAPD  0.1038, E  75.10; b E  8.00, MAD  12.67, MAPD  0.08, E  39.99; c biased low MAD  1.78, E  12.36, biased high; MAD (linear trend)  0.688 a y  0.51 0.403x, y(x  25)  10.57; b R  914 0.694 y  15.864  0.575x; r2  0.616; y(23)  2.64% y  6253.33  183.606x; a MAD (linear regression)  310, MAD (linear trend)  256; b 0.850 a y  380.93 16.03x (y  557.26); b y  22.07 41x (y  594.10): (c) “b” best a SF1  62.78, SF2  68.53, SF3  82.89, SF4  71.40; b Q1  64.64, Q2  66.06, Q3  80.82, Q4  69.27 Exponential smoothing models appear to be most accurate (a) y  37.72 247x, 65.15%; (b) y(11)  64.54% a y  219.27 12.28x, y  415.67; b y  5349.77 .147 x, r  966, y  541.41 y  1.704 0.269 x, r2  546 a y  745.91  2.226 x1 0.163 x2; b r2  992; c y  7,186.91 a y  219.67  0.027 x1 233.871 x2; b r2  0.956; c y  $882.82 a y  43.09 .0007 x1 1.397 x2; b r2  696; c y  76.66 Chapter 13 11 13 15 17 19 21 23 25 27 29 31 33 35 37 41 a Q  120.1; b TC  $15,612.49; c 12.49 orders; d 29.14 days a Q  292.5; b TC  $7,897.47; c 56.41 orders; d 5.67 days a Q  278,971.3; b TC  $22,317.71; c 5.07 orders; d 72 days a Q  79, TC  $5,924.53 a Q  1,264.9; b TC  $632.46; c R  54.79 Q  20,263.88; TC  $486,333.22 a Q  2,529.8; b TC  $12,648; c orders; d 42.2 days Q  90,137.52; TC  $3,020.45 a Q  9.1; TC  $1,095.45; b Q  6, TC  $1,193.33 Q  70,000; TC  $56,000; orders Q  5,000; TC  $68,725 Q  500; TC  $64,704 Q  6,000; TC  $87,030.33 Q  20,000; TC  $893,368 R  30,603.42; safety stock  2,603.42 R  83,016.7 R  259.2; safety stock  46.67 R  32.38 Q  122 pizzas, 117 pizzas R  9.22 SUPPLEMENT 13 b µ  3.48, EV  3.65, not enough simulations; c 21 calls, no, repeat simulation µ  $251 reorder at 5-car level avg waiting time  22 11 avg rating of Salem dates: 2.92 Chapter 14 11 13 15 a $2,457,000; b $2,367,000 a $448,000; b $443,250; c $367,600; d $388,400; choose chase demand a $1,638,800; b $284,800; c $61,400 a $381,600; b $432,900; no, more work is subcontracted $367,000 $1,308,900 $314,000 $1,800,000 795 E1BAPP.qxd 8/5/10 796 2:12 PM Page 796 Solutions to Selected Odd-Numbered Problems 17 19 21 23 25 27 29 31 33 $451,500 $144,700 5; 105 16, 0, 0, 0, 55, 27 85, 13, 0, 28, 77, 95; weeks seats; seat 55 seats 20 trees a 100; b 75; c 43, d SUPPLEMENT 14 a Maximize Z  $2.25x1 3.10x2; s.t 5.0x1 7.5x2  6500, 3.0x1 3.2x2  3000, x2  510, x1 0, x2 0; b and c x1  456, x2  510, Z  $2,607 Maximize Z  1,800x1a 2,100x1b 1,600x1c 1,000x2a 700x2b 900x2c 1,400x3a 800x3b 2,200x3c; s.t x1a x1b x1c  40, x2a x2b x2c  40, x3a x3b x3c  40, x1a x2a x3a  40, x1b x2b x3b  60, x1c x2c x3c  50, xij 0; x1b  40, x2a  40, x3c  40, Z  $212,000 Maximize Z  4.5xbs 3.75xos 3.60xcs 4.8xms 3.25xbd 2.5xod 2.35xcd 3.55xmd 1.75xbr 1.00xor 0.85xcr 2.05xmr; s.t 0.6xcs  0.4xbs  0.4xos  0.4xms 0,  0.3xbs 0.7xos  0.3xcs  0.3xms 0, 0.4xbd  0.6xod  0.6xcd  0.6xmd 0,  0.1xbd  0.1xod  0.1xcd 0.9xmd  0, 0.6xbr  0.6xor  0.6xcr 0.4xmr  0, 0.7xbr  0.3xor  0.3xcr  0.3xmr 0, xbs xbd xbr  110, xos xod xor  80 xcs xcd xcr  70 xms xmd xmr  150, xij b xos  52.5, xcs  70, xms  52.5, xbd  52.2, xmd  8.7, xbr  57.8, xor  1.4, xmr  88.8, xod  26.1, Z  $1,251 a Maximize Z  8x1 10x2; s.t x1 x2 400, x1 0.4 (x1 x2), x2  250 x1  2x2, x1 x2  500, xi 0; b x1  333.3, x2  166.6, Z  4332.4 Maximize Z  3x1s 5x2s 6x4s 9x1P 11x2P 6x3P 12x4P 1x1R 3x2R 4x4R  2x3R; s.t x1S x2S x3S x4S 3000, x1P x2P x3P x4P 3000, x1R x2R x3R x4R 4000, x1S x1P x1R  5000, x2S x2P x2R  2400, x3S x3P x3R  4000, x4S x4P x4R  1500, 0.6x1S  0.4x2S  0.4x3S  0.4x4S 0, 0.2x1S 0.8x2S  0.2x3S  0.2x4S   0.3x1S  0.3x2S 0.7x3S  0.3x4S 0, 0.4x1P  0.4x2P 0.6x3P  0.4x4P 0, 0.5x1R 0.5x2R  0.5x3R  0.5x4R  0, 0.9x1R  0.1x2R  0.1x3R  0.1x4R 0, xij 0; x1S  1200, x1R  3800, x2P  2200, x2R  200, x3S  900, x3P  3100, x4S  900, x4P  600, Z  $63,400 11 Minimize Z  190 rj 260 Oj ij; s.t rj  160, Oj  50, r1 1  i1 105, r2 O2 i1  i2 170, r3 O3 i2  i3 230, r4 O4 i3  i4 180, r5 O5 i4  i5 150, r6 O6 i5 250, Z  $215,600 13 x1  12 A.M  A.M  40, x4  20, x5  40, x6  20, x7  10, x9  40, x10  10, Z  180 15 xt1  750, xt2  180, xt3  1,680, xm1  750, xm2  450, xm3  480, xb2  270, xb3  240, Z  10,798.50 17 x1  3.3, x2  6.7, Z  566.67 19 x1  376,470.59; x2  343,526.41; Z  88, 376.47 21 b x1  120 cups, x  80 cups, z  $370; d does not affect solution; e x1  123.1 cups, x2  82.1 cups, Z  $379.53; f not spend 23 b x11  65.385, x14  384.615, x22  400, x23  170, x31  150.3, x33  169.7; Z  $11,738.28 25 x13  25,000, x14  8,000, x16  2,000, x24  4,000, x25  8,000, x34  5,000, Z  $59,100; b Z  $52,000 27 a x14  20, x44  40, x35  20, x55  60, x66  90, x17  20, x27  30, x77  50, y5  5, y6  10, y7  20, Z  $31,500; b x34  20, x44  40, x25  5, x35  20, x55  60, x26  10, x66  90, x17  40, x27  25, x77  50, y7  5, Z  $26,000 29 x1  6, xn  0, xs  6, xw  6, yl  14.44, yn  10, ys  7.56, yw  10, Z  $15,600 31 x1  54, x2  108, x3  162, Z  $253.80; a $0.78; b $0; c x1  108, x2  104, x3  162, Z  $249.48 33 x1  1,000, x2  800, x3  200, Z  $760; a $38; b x1  1,000, x2  1,000, Z  $770; c x1  1,600, x2  200, x3  200 35 xA3  400, xA4  50, xB4  250, xB5  350, xC4  175, xC7  274.1, xC8  50.93, xD2  131.7, xD7  15.93, xE1  208.33, xE8  149.07, xF1  291.67, xF2  108.3, xF6  460; Z  12,853.33 37 x12  x13  x14  x15  37,000; x26  x36  x46  x56  12,000; x27  x37  x47  x57  6,000; x28  x38  x48  x58  19,000; x69  5,000; x79  6,000; x89  3,000; x810  16,000; x611  7,000; x912  14,000; x1012  16,000; x1112  7,000; Z  $40,680 E1BAPP.qxd 8/5/10 2:12 PM Page 797 Solutions to Selected Odd-Numbered Problems 39 41 43 45 xA2  34,558.82; xA3  145,441.18; xB1  167,259.79; xB2  147,740.21; xC3  61,804.51; xC4  278,195.49; xE2  61,345.18; Z  $34,133,052.63 x1B  1, x2A  1, x3A  1, x4B  1, x7C  1, x11C  1, z  $79,000 x1G  1, x2B  1, x3D  1, x4L  1, x5K  1, x6E  1, x7A  1, x8C  1, z  4.420 a football fields, playgrounds, walking/running trails, softball fields, z  123,500; b soccer fields, playgrounds, walking/running trails; z  4.0 or 1.33 avg priority Chapter 15 13 15 17 19 a 6; b 7; c b 800; c day $240.80 100 B’s, 50 C’s, 50 D’s, 400 E’s, 900 F’s, 200 G’s, 100 H’s, 100 I’s order in periods 1–6 for quantities 50, 50, 56, 50, 50, and 50 b days; c no; d back panel, side panel, legs, drawer guide a POQ or EOQ; b POQ; c POQ; d POQ a Machining 250 hours; Heat treat 500 hours; Assembly 50 hours Chapter 16 SS50—SS100—SS50—SS200 (these answers are rounded up) 125/hr c; decreases a kanbans, inventory increases; b kanbans, inventory halved; c 14 kanbans, no change in inventory Chapter 17 11 13 15 17 19 21 23 Jones to Nurse 1, Hathaway to Nurse 2, Sweeney to Nurse 3, Bryant to Nurse Product to machine B, product to machine D, product to machine A, product to machine C, product to machine E A to Finance, B to Production, C to Customer Service, D to Logistics, E to Sales, F to Marketing Research FCFS; DDATE or SLACK; Point value of assignment, grade in class, major SPT: 23.88, 9.75, 22, 5; DDATE: 30.75, 8.25, 13, 7; SLACK: 3.63, 9.13, 17, 7; depends on criteria a 12, 3, 7; b 12.25, 3.25, 6; c 13, 3.75, 6; depends on criteria a 18 hours, b 20 hours; FCFS E, B, D, C, A; 23 6, 5, 4, 2, 1, 3; hr 35 Backlog  20, 10, 5, 5, 10 b M T W Th F Sa Sn K.J x x x x x T.S 0 x x x x x F.C x x x x 0 x S.B x x x x x 0 P.T x 0 x x x x M T W Th F Sa Sn A.R 0 x x x x S.H x x x x J.J x x x x T.T x x x x x E.T x x x x x P.D x x x x x 797 E1BINDEX.qxd 8/5/10 10:01 AM Page 798 Index ABC systems, of inventory control systems, 560–563, 561f Ability, motivation v., 319 Acceptable quality level (AQL), 149–150 Acceptance sampling AOQL and, 152, 152f, 153f defects and, 148–149 double- and multiple-sampling plans for, 153 OC curve and, 150–151, 150f with OM Tools, 151 producer’s/consumer’s risk and, 149–150 single-sample attribute plan in, 149 Accessibility, 56, 707 Accounting, 5, 702 ACSI See American Customer Satisfaction Index Action notices, 694 Action plan, 22f Activity, 367 normal activity cost, 401–402, 401f probabilistic activity times in, 389–392, 390f, 392f Activity-on-arrow (AOA), 380, 380f Activity-on-node (AON), 380, 380f Activity scheduling, CPM/PERT and, 383–386, 383f, 384f, 385f Activity slack, 386–387, 387t Actual cycle time, 275 Adjusted exponential smoothing, 510–512, 512f, 520t Advanced planning and scheduling (APS), 772–774, 773f Advanced single-server model, 209–210, 210f Aetna, 330 Affirmative action, 329 Aggregate, 608, 609f disaggregation, 628 Aggregate planning (services), 630 revenue management for, 631–634, 632f, 633t Aggregate planning, scheduling for, 756 Aggregate planning quantitative techniques Excel for, 617f, 618f, 620f, 621f, 622f, 626t, 627f general linear programming model for, 618–619, 620f mixed strategies for, 619, 621 other quantitative techniques and, 623–626, 623t, 624t, 626f pure strategies for, 616–617, 617f, 618f transportation method for, 623–626, 623t, 627f AGV See Automatic guided vehicle AI See Artificial intelligence Aircraft industry, 338–339, 341f Air freight, 460–461, 461f Airlines, 111 See also specific airlines Air Products, 701–702 Alcoa, 498 Alternative workplaces, 324–325 Amadas Industries, 614 Amazon, 18, 69, 194–195, 455, 456f, 462 American Airlines, 378, 777 American Customer Satisfaction Index (ACSI), 21, 69 American Express, 159, 433 American National Standards Institute (ANSI), 94, 97 American Society for Quality (ASQ), 21, 55, 69, 92t, 97 Analysis techniques, 302–308, 304f See also specific types of analyses Analyze, in breakthrough strategy, 79 Andons, 738, 738f Annual savings, of technology, 245 ANSI See American National Standards Institute AOA See Activity-on-arrow AOA network, CPM/PERT and, 380–381, 380f, 381f AON See Activity-on-node AOQ See Average outgoing quality AOQL See Average outgoing quality limit Apple, 10, 18, 69, 162, 441 Applied Materials, 615 Appraisal costs, 84, 85f, 86f APS See Advanced planning and scheduling AQL See Acceptable quality level ARAMARK Healthcare, ARDEC See Army Armament Research, Development and Engineering Center, U.S Army Armament Research, Development and Engineering Center, U.S (ARDEC), 70, 320 Army Corps of Engineers, U.S., 399–400, 400f Artificial intelligence (AI), 246f, 248t ASQ See American Society for Quality ASRS See Automated storage and retrieval system Assemble-to-order, 437, 682 Assembly charts, 235 Assembly Line Configuration Program (ASYBL), 278 Assembly lines, 278, 282–284, 283f, 284f, 318 See also Product layouts Assignment method, of loading, 758–761, 760f ASYBL See Assembly Line Configuration Program ATP See Available-to-promise AT&T, 22, 22f, 97, 317, 323, 325, 330, 430 Attributes, 110 Audi, 159 Australian Business Excellence Award, 92t, 93 Automated scheduling systems, 779 Automated storage and retrieval system (ASRS), 246f, 247t Automatic guided vehicle (AGV), 246f, 247t Automation, 281, 281f, 282, 334 Autonomous maintenance, 739n6 Available-to-promise (ATP), 628–629, 630f Average capacity strategy, 258, 259f Average error, 519–520 Average outgoing quality (AOQ), 152, 153f Average outgoing quality limit (AOQL), 152, 152f, 153f Avis, 75, 349f B2B See Business-to-business B2C See Business-to-consumer Backlogs, 614, 771 Back office, 198f, 199, 199f, 274 Backordering, 614 Backward pass, 385 Backward scheduling, 686, 686f Balance, 282 See also Line balancing Balance delay, 276 Balanced scorecard, 23–24, 23t, 24f, 78 Baldrige Award See Malcolm Baldrige National Quality Award Bank of America, 77, 78, 205, 261–262, 302, 745 Baptist Hospital, Inc., 62 Bar codes, 246f, 248t, 433 See also Radio frequency identification Barnes and Noble, 273 Basic EOQ model, 564–567, 564f, 565t Basic layouts fixed-position layouts in, 266, 266f process layouts in, 262–264, 263f, 264f, 265t product layouts in, 264–265, 264f, 265f, 265t Basic motion time study (BMT), 354 Basic single-server model, 203f, 206–208 advanced single-server model v., 209–210, 210f with Excel, 209, 209f, 210f Basic waiting line structures, 202–203, 203f Batch production, 229, 230f, 231, 231f, 232t, 756, 775 Bauli, 613 The Bayer Group, 516 Bean, Leon Leonwood, 58 Bechtel, 78 Bellin Health System, 116 Benchmarks, 75, 77, 91, 92, 94, 96, 159, 320 benchmarking data, 241, 242f Best Buy, 170, 615 Best of breed, 705 Best operating level, 259 Beta distribution, 389, 390f Bill of material (BOM), 683–685, 685t, 686f Binney & Smith (Crayola), 18 Black Belts, in Six Sigma, 77f, 78, 80 Block diagram, 267–269, 270f Blueprinting, 198, 198f, 199f BMT See Basic motion time study BMW, 69, 159 Boeing, 77, 266f, 430, 498, 745 Boise, Inc., 373 BOM See Bill of material Booz, Allen, and Hamilton, 379 Bottlenecks, 771, 775–777 BPR See Business process reengineering Brainstorming, 64 Brazil, 11f, 470 Breakdown maintenance, 738 Breakeven analysis, 230–236, 231f, 232f, 232t Breakeven point, 233–234, 234f, 235f Breakthrough strategy, 79–80 Brees, Brittany, 74f Brees, Drew, 74f British Airport Authority, 382 British Airways, 382 British Petroleum, 373 British Standard Institute (BSI), 94 BSI See British Standard Institute E1BINDEX.qxd 8/5/10 10:01 AM Page 799 Index BTO See Build-to-order Budgeting, 245, 599 Build-to-order (BTO), 437, 682 Bullwhip effect, 426–427, 426f, 497–498, 555, 615 Bureau of Labor Statistics, U.S., 328 Business intelligence, 704 Business process analysis, 706 Business process reengineering (BPR), 241n1 Business-to-business (B2B), 7, 246f, 248t Business-to-consumer (B2C), 246f, 248t CAD See Computer-aided design CAD/CAM, 168, 231, 231f, 246f, 247t CAE See Computer-aided engineering Calling population, 200–201, 201f, 209f, 210 CAM See Computer-aided manufacturing Campbell’s Soup Company, 166, 452 Canada Awards for Excellence, 92t, 93 Capable-to-promise, 628 Capacity, 229, 258, 260f, 696, 738 services and, 630–631 Capacity adjustment strategies, 612–614, 612f Capacity cushion, 259 Capacity lag strategy, 258, 259f Capacity lead strategy, 258, 259f Capacity planning, 258–260, 259f, 260f, 627f, 628, 700 Capacity requirements plan, 627f, 628 Capacity requirements planning (CRP), 695, 696f, 756 calculating capacity for, 696–697 load leveling in, 699–700, 699f load profiles for, 696, 697–698, 698f overloads in, 698–699 Capital budgeting, 245 Capital investment, 245, 282, 599 Capital One Financial Corporation, 326 CAPP See Computer aided process planning Carbon footprints, 171–172 Carrying costs, 558, 571–573, 571f constant carrying cost, 571–573, 571f Catalogue-order companies, 111 Cause-and-effect diagrams, 63f, 64–65, 64f, 65f Cause-and-effect (C&E) matrix, 65, 65f, 81f CBP See Constraint-based programming c-Charts, 113–114, 117–118, 118f CE See European Conformity (CE) mark C&E See Cause-and-effect (C&E) matrix Cells, 278, 282 Cellular layouts, 180, 278–279, 278f, 279f, 280f, 281f advantages of, 280–281 disadvantages of, 281–282 for lean production, 724–726, 725f Center for Health Design, 267 Center-of-gravity technique, 304, 304f with Excel, 305, 305f with OM Tools, 306, 306f CFI Group, 69 Champion, 79 Changeover time (C/O), 747, 747f Channel Tunnel Rail Link (United Kingdom), 78 Chase demand, 612, 612f, 617, 618f Chase supply, 612 Checksheets, 63f, 65, 235 China, 10, 11f, 12, 12f, 332f, 370, 373, 467, 472, 615 global supply chain and, 468–470 project management and, 374–375 skills in, 331–332 CIGNA Dental, 78 CIM See Computer-integrated manufacturing Cisco Systems, 170, 332, 430 Citibank, 78, 194, 745 Clicker shock, 465 Clorox, 430, 430f Cloud computing, 709 CNC See Computer numerically control C/O See Changeover time Coca-Cola, 433 Coca-Cola Foundation, 373 Coefficient of determination, 529 Coefficient of optimism, 36 Coefficient of pessimism, 36 Coinstar, 193 Collaborative logistics, distribution and, 459–460 Collaborative planning, 628 Collaborative planning, forecasting, replenishment, and design (CPFT), 437–438, 438t, 516 Collaborative product design (CPD), 168–169 Column reductions, 758 Commercial Aviation Partnership, U.S., 533 Communication, 160, 378, 392 Community location factors, 299–300 Competitiveness, 18–19, 175f, 176 New Balance Corporation, 12–13 productivity and, 14–17 Completion time, 762 Complex products, MRP and, 681–682 Computer-aided design (CAD), 167, 168f, 246f, 247t CAD/CAM, 168, 231, 231f, 246f, 247t Computer-aided engineering (CAE), 167, 168, 246f, 247t Computer-aided manufacturing (CAM), 168 CAD/CAM, 168, 231, 231f, 246f, 247t Computer aided process planning (CAPP), 246f, 247t Computer-integrated manufacturing (CIM), 246, 246f, 248t Computerized layout solutions, 272 Computerized line balancing, 279 Computerized mathematical simulation, 590 Computerized Optimization and Simulation Modeling for Operating Supermarkets (COSMOS), 274 Computerized Relative Allocation of Facilities Technique (CRAFT), 272, 278 Computer Method for Sequencing Operations for Assembly Lines (COMSOAL), 278 Computer numerically control (CNC), 246f, 247t COMSOAL See Computer Method for Sequencing Operations for Assembly Lines Concurrent design, 161 Conformance, 56, 83, 87, 97 quality of, 58, 179 Conmed, 735 Connectivity/integration/services, 708–709 Consistency, 6, 56, 180 Constancy of purpose, 743 Constant carrying cost, 571–573, 571f Constant service times, 209f, 210 Constraint-based programming (CBP), 772–773, 773f Constraints, in linear programming, 647 Consumer Price Index (CPI), 436 Consumer Product Safety Commission, 472 Consumer Reports, 743 Consumer’s risk, 149–150 Containers, 461f, 462, 463f, 466f Continuous inventory systems, 559, 560f Continuous production, 230–231, 230f, 231f, 232f, 232t Continuous replenishment, 452, 498 799 Continuous replenishment programs (CRP), 556 Control, 235, 281, 368f, 757 See also Inventory control systems; Process control; Project control; Statistical process control DMAIC, 78–80, 81f, 82 forecast accuracy and, 520–523, 521f, 522f I/O control, 627f, 628, 769–771, 771f visual control, 735, 736f Control charts, 67, 110f, 126 for attributes, 113–118 c-Charts, 113–114, 117–118, 118f control limits and, 112 development of, 113 normal distribution, 113f patterns of, 124–125, 124f, 125f p-charts, 113–117, 115f, 125 process control chart, 112f sample points in, 112–113, 112f Control limits, 112 Convenience, 56 Conveyors, 246f, 247t, 265 Coors, 77 COPQ See Cost of poor quality Coral Springs, Florida, 73, 320 Core competencies, 18, 452 CORELAP, 272 Core rigidities, 18 Corning, 230, 743 Corporate services, 453f Correlation, 529 COSMOS See Computerized Optimization and Simulation Modeling for Operating Supermarkets Cost(s), 19, 88–89, 172, 282, 298, 472 appraisal costs, 84, 85f, 86f carrying costs, 558, 571–573, 571f crash cost, 401–402, 401f, 402f, 403f fixed, 230 inventory management and, 554, 557–559 landed cost, 465 normal activity cost, 401–402, 401f opportunity cost matrix, 758–759 outsourcing and, 228–229 production workers hourly compensation, 10, 10f of quality, 83–87, 85f, 86f, 87f sustainability and, 324, 372–373, 428–430 technology and, 245–246 telecommuting and, 325 time v., 377, 403–404, 404f variable, 230 waiting line analysis and, 204–205, 204f Cost control, 368f Cost index, 85 Cost management, in project control, 377 Cost of poor quality (COPQ), 84–85 Courtesy, 56 Courtyard Marriott, 195 Cp See Process capability ratio CPD See Collaborative product design CPFT See Collaborative planning, forecasting, replenishment, and design CPI See Consumer Price Index Cpk See Process capability index CPM See Critical path method CPM/PERT, 368f activity scheduling and, 383–386, 383f, 384f, 385f activity slack and, 386–387, 387t AOA network and, 380–381, 380f, 381f critical path and, 381f, 382–383, 383f development of, 379–380 E1BINDEX.qxd 8/5/10 800 10:01 AM Page 800 Index CPM/PERT, (Continued ) Gantt chart v., 379–380 OM Tools and, 393–395, 393f, 394f in project management, 379–388, 379f, 380f, 381f, 383f, 384f, 385f, 386f, 387t, 388f project network and, 380, 380f CR See Smallest critical ratio Cradle-to cradle design, 173 CRAFT See Computerized Relative Allocation of Facilities Technique Craft production, Crash cost, 401–402, 401f, 402f, 403f Crashing, 400 See also Project crashing Crash time, 401–403, 401f, 402f, 403f Creativity, 160 Critical path, 381f, 382–383, 383f Critical path method (CPM), 379 See also CPM/PERT CRM See Customer relationship management Crosby, Philip, 60t, 82, 87 Cross-cultural project teams, 370, 374 Cross-docking, 458f, 459 Cross-enterprise teams, 451 Cross training, 321–322 CRP See Capacity requirements planning; Continuous replenishment programs C/T See Cycle time Culture cross-cultural project teams, 370, 374 global diversity and, 331–332, 373–375 Cumulative error, 519–520 Cumulative lead time, 683 Currency Doubleday, 18 Customer complaint costs, 84 Customer contact, services v., 192, 196f, 196t Customer relationship management (CRM), 246f, 248t, 706t, 708f Customers, 56, 421 CUSTPR, 761 employees v., 317 requirements of, 175–179, 175f, 176f, 177f, 178f, 179f VoC, 69, 70, 79 Customer satisfaction, 68–70, 68f Customer service levels, 556, 630 Custom house brokers, 466f Customs and Border Protection, U.S., 472–473 CUSTPR See Highest customer priority CVS, 434 Cycle, 353, 354f, 500, 500f See also Product lifecycle management order cycle, 564–567, 564f, 565f Cycle time (C/T), 274–275, 747, 747f, 748f Dana Corporation, 72 Danaher Motion, 742 Dannon, 77 Days of supply, 440 DBR See Drum-buffer-rope DCs See Distribution centers DDATE See Earliest due date Deal values, 655–656, 656f Decision analysis, 33 with Excel, 36–37, 37f, 38f with OM Tools, 37–38, 37f payoff tables for, 34–36, 34f with probabilities, 38–39 without probabilities, 34–36, 34t sequential decision trees in, 39–41, 40f, 41f Decision making, 34 with simulation, 596–597, 597f, 598f Decision support systems (DSS), 246f, 248t Decision variables, 646–647 Deck, Margie, 772 Deere & Co., 774 Defective parts per million (PPM), 130, 148 Defects, 76, 87, 111, 722f, 772 acceptance sampling and, 148–149 LTPD, 149–150 Defects per million opportunities (DPMO), 76, 77f, 148 Define, in breakthrough strategy, 79 Define, measure, analyze, improve, control (DMAIC), 78–80, 81f, 82 Delivery, 6, 192, 452, 707, 740 Delivery specifications, 194f, 195 Dell, 10, 18, 440, 459, 503, 561 Delphi method, of forecasting, 501, 523 Demand, 452, 592, 592f, 592t, 594, 613 See also Aggregate planning (services) chase demand, 612, 612f countercyclical patterns for, 614 dependent demand, 557, 558f, 680–681, 682f discrete demand, 681, 682f inventory management and, 557, 558f probability distribution of, 591t shifting, 614 variable demand, 575–576, 576f, 578 Demand behavior, in forecasting, 500–501, 500f Demand management strategies, 614–615, 615f Deming, W Edwards, 59–62, 60f, 60t, 61f, 61t, 67, 81f, 109, 316, 321, 323, 743 Deming Medal, 92t Deming Prize, 93, 93t Deming Wheel, 60–61, 61f, 71 Denmark, 10, 10f, 16f Department of Commerce, U.S., 554 Department of Defense, U.S., 97 Department of Homeland Security, 70 Department of the Navy, U.S., 97 Dependent demand, 557, 558f, 681–682, 682f Designated target value, 127 Design characteristics, 176, 176f Design for environment (DFE), 172 Design for manufacture (DFM), 167 Design for Six Sigma (DFSS), 80, 181 Design of Experiments (DOE), 81f Design process, 56, 84, 161–165, 169, 173, 261–262, 266–267 See also Computer-aided design; Environment design; Facility design; Process layouts design; Product design; Production design; Service design CPFT, 437–438, 438t feasibility study in, 158f, 159–160 idea generation in, 157–159, 158f, 159f job design, 332–333, 333t process capability and, 129f in product design, 157–160, 158f, 159f robust design, 179–181, 180f Design quality reviews, 169–170, 169t, 170t Design specifications, 194f, 195 Design technology, 167, 168 design quality reviews in, 169–170, 169t, 170t Desired cycle time, 275 DFE See Design for environment DFM See Design for manufacture DFSS See Design for Six Sigma D&H Manufacturing, 615 Direct-response delivery, 452 Disaggregation, 628 Discrete demand, 681, 682f Discriminating, 150 See also Diversity Diseconomies of scale, 259, 260f Disney, 18, 75 Disney Store, 273 Disney World, 74, 159, 611, 611f waiting at, 205–206, 205f Dispatch list, 757 Distinctive competence, 18 Distinguished Service Medal, 92t Distribution, 113f, 272 Amazon, 455, 456f beta distribution, 389, 390f collaborative logistics and, 459–460 DCs/warehouses and, 457 distribution outsourcing and, 460 normal distribution, 393, 394f Poisson distribution, 201–202, 209, 212 postponement and, 457–458 speed/quality in, 455 VMI and, 459 WMS and, 458–459, 458f Distribution centers (DCs), 457 Diversity, 328–331 Diversity issues, 373–375 Division of labor, DMAIC See Define, measure, analyze, improve, control DOE See Design of Experiments Domino’s, 744 Double-sampling plans, 153 Dow Chemical, 238, 238f, 704 DPMO See Defects per million opportunities Drum-buffer-rope (DBR), 775 DSS See Decision support systems Dummy, 381–382, 381f DuPont, 97 Durability, 56 Duties, 464–465 Duty specialists, 466f DynMcDermott Petroleum Operations, 320 E I du Pont de Nemours & Company, Inc., 379 EAI See Enterprise application integration Earliest due date (DDATE), 761–764, 767 Earliest finish time (EF), 383f, 384–385 Earliest start time (ES), 383–385, 383f Earned value analysis (EVA), 378 eBay, 18, 194–195 e-Business, 431–432, 431f EC See European Community Eco-labeling, 171, 171f eCompany, 706 Economic analysis, in idea generation, 159–160 Economic order quantity (EOQ), 692–693 Economic order quantity (EOQ) model(s) basic EOQ model as, 564–567, 564f, 565t with Excel, 569, 570f with OM Tools, 570, 570f production quantity model as, 567–569, 567f Economics, 5, 170, 190, 190f, 191f Economies of scale, 259–260, 260f Edens & Avant, 302 EDI See Electronic data interchange EF See Earliest finish time Effective capacity, 696 Efficiency, 282, 696 workstations and, 274–278 EFT See Electronic funds transfer EI See Employee-involvement (EI) programs Electronic business, 431–432, 431f Electronic data interchange (EDI), 246f, 248t, 432, 709 Electronic funds transfer (EFT), 22 Elemental standard time files, 354 eM See e-Manufacturing E1BINDEX.qxd 8/5/10 10:01 AM Page 801 Index e-Manufacturing (eM), 246, 246f, 247t, 248t e-Marketplaces, 454 Employees compensation of, 327–328 customers v., 317 Kaizen and, 71–72 motivation of, 319–321, 319f multifunctional employees, 723–724, 724f for problem-solving, 71–72 quality and, 70–73 of Ritz-Carlton, 75, 76f satisfaction of, 70–71, 73, 320–321 scheduling for, 777–779, 778f temporary/part-time employees, 325–327 Employee-involvement (EI) programs, 71 Empowerment, 323 Enterprise application integration (EAI), 708 Enterprise project management, 379 Enterprise resource planning (ERP), 246f, 248t, 272, 438, 498, 700–701, 708f business process analysis and, 706 ERP modules, 702 finance/accounting and, 702 human resources and, 703–704, 703f, 704f implementation of, 704–707, 705f, 706t production/materials management and, 703, 703f, 704f sales/marketing and, 703, 703f Environment, 172, 746 product design for, 170–181, 171f, 172f, 173f, 175f, 176f, 177f, 178f, 179f, 180f Environmental analysis, 333t, 334, 599–600 Environmental Defense Fund, 373 Environmental producer responsibility (EPR), 172 Environmental Protection Agency, U.S (EPA), 476 Environment design, 170, 261–262 EPR in, 171–172, 171f green consumption in, 173 green manufacture in, 172–173, 172f QFD in, 173–179, 174f, 175f, 176f, 177f, 178f, 179f EOQ See Economic order quantity (EOQ) EPA See Environmental Protection Agency, U.S EPR See Environmental producer responsibility e-Procurement, 246f, 247t, 453 e-marketplaces for, 454 reverse auctions for, 454–455 Equal likelihood (La Place) criterion, 36 Equal opportunity, 329 Ergonomics, 334 ERP See Enterprise resource planning ERP implementation business process analysis and, 706 delivery/access finalization in, 707 external partner link in, 707 modules choice in, 706 sophistication level in, 706–707 Erratic orders, MRP and, 682 ES See Earliest start time; Expert systems EU See European Union European Community (EC), 95, 97 European Conformity (CE) mark, 97 European Quality Awards, 92t, 93 European Union (EU), 9, 97 EVA See Earned value analysis Evans, J R., 129 EVPI See Expected value of perfect information e-Waste, 170–171 Excel for aggregate planning quantitative techniques, 617f, 618f, 620f, 621f, 622f, 626t, 627f assignment method with, 760f, 761 basic single-server model with, 209, 209f, 210f center-of-gravity technique with, 305, 305f decision analysis with, 36–37, 37f, 38f EOQ models with, 569, 570f flowcharts with, 237f, 239 I/O control with, 771f Johnson’s rule with, 766f learning curves and, 341, 342f linear programming with, 654, 654f, 655f load-distance technique with, 307, 307f location factor rating with, 303, 303f multiple regression with, 530–533, 530f, 531f, 532f, 533f for multiple-server model, 213f, 214 multiple-server model with, 213f, 214 observation sheet in, 353f periodic inventory system order quantity with, 578, 579f process capability with, 132, 132f process flowcharts in, 239 process layouts with, 270f productivity with, 15f quantity discounts with, 573, 573f regression analysis with, 529–530, 529f, 530f reorder point with, 576, 577f for sensitivity range, 656, 656f sequencing rules with, 764f simulation with, 594–598, 595f, 596f, 597f, 598f SPC with, 126–127, 127f, 128f time series forecasting with, 524–526, 524f, 525f, 526f transportation model and, 477–480, 478f, 479f transshipment model and, 481–482, 481f, 482f Expected value, 38f, 592 Expected value of perfect information (EVPI), 38–39 Expedite, 695, 695t Expertise, outsourcing and, 229 Expert systems (ES), 246f, 248t Explosion, 691 Exponential smoothing, as time series method, 507–510, 507f, 509f, 520t Export management companies, 466f Export packers, 466f Export trading companies, 466f EXTEND, 272 Extended producer responsibility, in environment design, 171–172, 171f Extensible markup language (XML), 246f, 248t, 709 External failure costs, 84–85, 86f External setup, 731–732 Extranet, 246f, 248t Extreme points, 650 Facilities, 261–262 cost of, 298 CRAFT, 272, 278 types of, 297–298 Facilities location, 298 analysis techniques for, 302–308, 304f center-of-gravity technique and, 304–306, 304f GIS and, 301–302, 301f global supply chain and, 299–302, 301f incentives and, 300–301 load-distance technique for, 306–308, 307f, 308f in U.S., 299–300 Facility design green facility design, 261–262 for process layouts, 267–272, 270f, 271f service layouts design in, 273–274, 273f 801 Failure, 164 See also Defects controllable v uncontrollable factors, 179–180 external/internal failure costs, 84–85, 86f robustness v., 179–181, 180f Failure Modes and Effects Analysis (FMEA), 81f, 169, 169t Failure rate, 164 Fairfield Inn, 195 Fare classes, 631, 633t Fast-food restaurants, 111 Fault tree analysis (FTA), 169, 170f FCFS See First-come, first served Feasibility study, in design process, 158f, 159–160 Feasible solution space, 649 Federal Express, 19, 75, 317, 323, 430, 433, 461–462, 461f, 501, 631, 744 Feigenbaum, Armand V., 60t, 83 Fill rate, 440 Final block diagram, 269, 270f Final design, 167 Finance, 4–5, 4f, 245–246 See also Accounting; Cost(s) ERP and, 702 Finite calling population, 209f, 210 Finite scheduling, 772 Firestone, 174 Firm positioning, 19–21, 20f First-come, first served (FCFS), 761–763, 767 Fishbone See Cause-and-effect diagrams Fisher, George, 21 Fitness for use, 56 Why’s, 736–737 Fixed automation, 282 Fixed cost, 230 Fixed-order-quantity system, 559, 560f Fixed-position layouts, 266, 266f Fixed-time-period system, 560 Flexibility, 21, 282–283 Flexible manufacturing systems (FMS), 282, 283f Flexible resources, 723–724, 724f Flexible work schedules, 324 Flextime, 324 Flextronics, 193–194 Flowcharts See Process flowcharts Flow time, 275, 762 FMEA See Failure Modes and Effects Analysis FMS See Flexible manufacturing systems Foodservice, U.S., 373 Ford, 56–57, 57f, 77, 78, 159, 174, 318, 321, 341 Ford, Henry, 7, 8t, 81, 318 Forecast accuracy control and, 520–523, 521f, 522f cumulative error and, 519–520 MAD and, 517–519, 520t Forecast error, 517 Forecasting, See also Regression forecasting methods components of, 499–503, 500f, 502f CPFT, 437–438, 438t, 516 demand behavior in, 500–501, 500f methods of, 501–502, 523 OM Tools and, 526, 526f process of, 502–503, 502f SCM and, 497, 497f supply chain management and, 496–499, 497f time series forecasting as, 524–526, 524f, 525f, 526f Form design, 161 Fortune, 330–331 Fortune 500, 563 Fortune 1000 companies, 329 Forward scheduling, 686, 686f E1BINDEX.qxd 8/5/10 802 10:01 AM Page 802 Index Foxconn, 10 FoxMeyer Drug, 704 France, 374 Free flow layouts, 273, 273f Frito-Lay, 330, 433 Front office, 198f, 199, 199f, 274 FTA See Fault tree analysis Functional design, 163 Functional layouts See Process layouts Gainsharing, as employee compensation, 327–328 Gang process chart, 336–337 Gantt, Henry, 338, 376 Gantt charts, 368f, 765, 765f CPM/PERT v., 379–380 in Microsoft Project, 396f, 397, 398f for monitoring, 768–769, 769f for project scheduling, 376–377, 376f for synchronous manufacturing, 776f The Gap, 298, 457 Gaylord Hotels, 436 GE See Genetic algorithms GE Energy China, 373 General Electric, 73, 77, 80, 169, 170, 278, 422, 429, 523, 737 General linear programming model, 618–619, 620f General Mills, 460 General Motors, 774 General-purpose machines, 723–724 Genetic algorithms (GE), 773–774, 773f Genzyme Corporation, 456 Geographic information systems (GIS), 301–302, 301f German National Quality Award, 93t Ghirardelli’s, 755 Gilbreth, Frank, 337–338 Gilbreth, Lillian, 337–338 GIS See Geographic information systems Global diversity, 331–332, 373–375 Global economy, 190, 190f Globalization, 8t, China and, 10, 11f, 12, 12f India in, 13–14 reverse globalization, 470–472 Global supply chain, 467 China and, 468–470 duties/tariffs/trading groups and, 464–465, 465f facilities location and, 299–302, 301f landed cost and, 465 management obstacles and, 465 reverse globalization and, 470–472 terrorism and, 472–473 U.S and, 468 Global warming, 8t, GM, 323 Goldratt, Eliyahu, 774–775 Goods, 11f services v., 191, 191f, 193 Gradual usage, 567–569, 567f Graphic solution method, for linear programming, 648–652, 649f, 650f, 651f, 652f Green Belts, in Six Sigma, 77f, 78, 80 Green Building Council, U.S., 261 Green consumption, 173 Green facility design, 261–262 Green manufacture, 172–173, 172f Green Revolution, 8t, Green sourcing, 172 “Green” supply chains, 428 QM and, 429–430, 430f Grid layouts, 273, 273f Muther’s grid, 269–270, 270f Grocery stores, 111 Gross domestic product (GDP), 10, 11f industry sector v., 190, 191f Gross requirements, in MRP process, 689, 689t, 690 Group technology (GT), 278, 278f Grupo Salinas, 96 GT See Group technology Guanxi (personal relationships), 374, 469 Guinness brewery, 81, 81f Hampton Inns, 69 Harley-Davidson, 451 Harrah’s Cherokee Casino and Hotel, 631–632, 632f Hawthorne studies, 7, 8t Health-care operations, Heathrow Airport (London), 382 Heavy manufacturing facilities, 297 Heineken USA, 499 Hershey’s, 433, 616 Herzberg, Frederick, 7, 319f, 322–323 Heuristics, in line balancing, 278 Hewlett-Packard, 10, 173, 422, 467, 499–500, 563 Highest customer priority (CUSTPR), 761 High-level process map, 242–243, 242f, 243f Hiring, 322 Hispanic, 330 Hispanics, 328 Histograms, 63f, 65 Holiday Inn, 192 Home Depot, 298, 326, 457 Honda, 69, 321, 452 Honeywell, 77 Hong Kong Award for Industry, 93t Horizontal job enlargement, 323 Hoshins, 22 Hospitals, 62, 64, 78–80, 111, 195, 266–267 Hotel capacity, 260f Hot lists, 768 House of quality, 175, 175f, 176f, 177f, 178f, 179f HSBC Securities, 78 Human resources, 4, 4f, 280 ERP and, 703–704, 703f, 704f QM and, 317–318 services v., 316 technology v., 316 Human resources management alternative workplaces/telecommuting and, 324–326, 325f assembly line and, 318 automation and, 334 Baldrige Awards and, 320–321 changing nature of, 318–321, 319t contemporary trends in, 321–327 diversity and, 328–331 diversity management programs and, 329–31 employee compensation and, 327–328 employee motivation and, 319–321, 319f empowerment and, 323 environmental analysis and, 333t, 334 ergonomics and, 334 flexible work schedules and, 324 global diversity and, 331–332 Japan and, 321 job analysis and, 335–338, 335f, 336f, 337f, 338t job design and, 332–333, 333t job enrichment and, 322–323 learning curves and, 338–342, 339f, 340f, 341f, 342f motion study and, 337–338, 338t scientific management limitations and, 319 task analysis and, 333, 333t teams and, 323 technology and, 334 temporary/part-time employees and, 325–327 worker analysis and, 333–334, 333t worker-machine chart, 336–337, 337f Hurricane Katrina, 399–400 Hurwicz criterion, 36 Hyatt Regency, 329 Hybrid layouts, 283–284, 284f cellular layouts as, 278–282, 278f, 279f, 280f, 281f FMS as, 282, 283f Hyundai Azera, 69 i2 Technologies, 706t, 772 IBM, 13, 278, 325, 430, 469, 701, 709 Idea generation, 157–160, 158f, 159f iGrafx, 238 IIE Award for Excellence in Productivity Improvement, 92t Improvement curve See Learning curves Incentive piece-rate system, 349, 351–352 Incentives, facilities location and, 300–301 Incremental expansion, one-step expansion v., 259f Independent demand, 557, 558f Index, 21, 69, 131–132, 436 Index numbers, 85–87, 86f India, 11f, 13–14, 170, 374 Indonesia, 11f Industrial Revolution, 8t Industry sector, 298, 756 aircraft industry, 338–339, 341f GDP v., 190, 191f Infinite queue, 202 Infinite scheduling, 772 Information, 39, 301–302, 438t Information costs, 84 Information technology, 5, 13, 556 bar codes and, 433 EDI and, 432 electronic business and, 431–432, 431f Internet, 435, 437 RFID, 246f, 248t, 433–434, 434f, 435f, 740, 740n7, 768 as supply chain enabler, 431–437, 431f, 434f, 435f, 436f Infosys, 13, 170 Infrastructure, 300 Innovation, 244t See also Process innovation Input/output, percent change in, 16–17, 16f Input/output (I/O) control, 627f, 628, 769–771, 771f Inspection costs, 84 Insurance companies, SPC and, 111 Intel, 77 Interactive Apparel, 706 Interchangeable parts, 6–7, 8t Intermodal transportation, 461f, 462, 463f Internal failure costs, 84–85, 86f Internal setup, 731–732 International Asia Pacific Award, 92t International freight forwarders, 466f International Organization for Standardization (ISO), 68, 83, 95f, 96, 96f EC and, 95, 97 registrars and, 95, 97 standards of, 94–95 U.S companies and, 95, 97 E1BINDEX.qxd 8/5/10 10:01 AM Page 803 Index International trade logistics (ITL), 465, 467 International trade specialists, 465, 466f Internet, 246f, 248t, 435, 437, 463, 465, 467, 708–709 Internet Revolution, 7, 8t, 19 Intranet, 246f, 248t Inventory, 630, 722f QM and, 556–557 small lots in, 730, 731f supply chain uncertainty and, 424–426, 425f VMI, 459, 556, 561, 563 Inventory control systems, 559, 560f ABC systems, 560–563, 561f periodic inventory systems, 560, 577, 578f Inventory management, 274, 555–556, 599 costs and, 554, 557–559 demand and, 557, 558f Inventory systems, continuous, 559, 560f Inventory turnover (or turns), 439–440 I/O See Input/output (I/O) control Iredell-Statesville Schools, 62, 94 Irregular movements, in demand behavior, 501 Ishikawa, Kaoru, 60t Ishikawa diagram See Cause-and-effect diagrams ISO See International Organization for Standardization Item master file, 687–688, 688t ITL See International trade logistics Ives, Jonathan, 162 J D Power and Associates, 69, 92t J D Power Awards, 92t Japan, 10, 10f, 16f, 59, 109, 321, 374, 615, 722 7-Eleven in, 432–433 U.S v., in lean production, 741–742 Japan Quality Medal, 93t Jenks (Oklahoma) Public School District, 320 Jidoka (workers’ authority to stop production), 737–738, 738f JIT See Just-in-time Job analysis, 335–338, 335f, 336f, 337f, 338t Job design, 332–333, 333t Job rotation, 322 Jobs, 318, 322, 335, 336f See also Employees Job shop production scheduling, 756 Job training, 321–322 Jockeying, in waiting line system, 201 Johnson’s rule, 764–766, 765f Jones, Daniel, 721 Journal of Aeronautical Sciences, 338–339 Jugaad (“invention on the fly”), 170 Juran, Joseph M., 60t, 65, 76 Just-in-time (JIT), 7, 8t, 22, 721, 744, 744f Kaizen, 71–72, 735–737, 737f Kaizen blitzes, 741f, 742 Kanban (card), 726–730, 727f, 728f, 747f Kanban post office, 728f, 729 Kanban racks, 728, 728f Kanban square, 727–728, 728f Kaplan, Robert, 23 K-bills, 685 Keiretsu model, 432–433 Kelley, James E., Jr., 379 Kellogg’s, 577 Kerns, David, 743 Key performance indicators (KPIs), 23–24, 23t, 439–440 K’NEX, 472 Kodak, 21, 159, 330–331 Kohl’s, 273 Korea, 16–17, 16f, 370 KPIs See Key performance indicators Kraft Foods, 77 Kroger, 434 Kyphon, Inc., 322 L L Bean, 56, 57, 58, 58f, 325, 460, 462 Labor, 6, 274, 300, 631 Labor hours, 16, 16f, 656, 657f Labor index, 85 Labor management, 458f, 459 The Lafayette, 379, 379f Landed cost, 465 La Place criterion, 36 Last-come, first-served (LCFS), 761 Latest finish time (LF), 383f, 385–386 Latest start time (LS), 383f, 385–386 Latin America, 374–375 Latina Style, 331 LCFS See Last-come, first-served LDR See Linear decision rule Leadership in Energy and Environment Design (LEED), 261–262 Lead time (LT), 683, 689, 689f, 689t, 700 Lean, in recession, 271–272 Lean banking, 745 Lean health care, 745 Leaning supply chain, 745–746 Lean production, See also Six Sigma benefits of, 740–741 cellular layouts for, 724–726, 725f drawbacks of, 742–743 flexible resources in, 723–724, 724f implementing, 741–743, 741f, 742f in Japan v U.S., 741–742 jidoka in, 737–738, 738f kaizen in, 735–737, 737f kanban in, 726–730, 727f, 728f mixed-model assembly in, 733–734, 734f quick setups in, 730–732, 731f, 732f, 733f small lots in, 730, 731f supplier networks in, 739–740 Toyota and, 721–723, 727f, 729, 731, 738–741, 743, 745 uniform production levels in, 732–735, 734f visual control in, 735, 736f Lean retailing, 745 Lean services, 744–746, 744f, 747f, 748f Lean Six Sigma, 80–82, 81f, 746 Lean systems, 71 Learning curves Excel and, 341, 342f human resources management and, 338–342, 339f, 340f, 341f, 342f OM Tools and, 342, 342f LEED See Leadership in Energy and Environment Design LensCrafters, 19 Level of customer service, 556, 630 Level production, as capacity adjustment strategy, 612, 612f Levi Strauss, 18, 302 Lexus, 69, 94 LF See Latest finish time Li & Fung Trading Company, 3, 469 Light-industry facilities, 298 Lindsay, W M., 129 Line See Waiting line analysis Linear decision rule (LDR), 623 Linear programming, 618–619, 620f, 645, 646t constraints in, 647 decision variables in, 646–647 with Excel, 654, 654f, 655f 803 graphic solution method for, 648–652, 649f, 650f, 651f, 652f model formulation in, 646–648 objective function in, 647 OM application for, 646t Linear programming model solution, 652, 653f, 654f surplus variables for, 653 Linear regression, 527–528, 528f Linear trend line, as time series methods, 512–514, 514f, 520t Line balancing, 279, 283 heuristics in, 278 in product layout design, 274–278 Line of influence, 198, 199f Line of interaction, 198, 199f Line of support, 198, 199f Line of visibility, 198, 198f, 199f LLC See Low level code Load, 696–700, 698f, 699f Load-distance technique with Excel, 307, 307f for facilities location, 306–308, 307f, 308f with OM Tools, 307, 308, 308f Loading, 757 assignment method of, 758–761, 760f nonadjacent loads, 267–268 overloads, 698–699 scheduling and, 757–761, 760f Load leveling, 699–700, 699f, 757 Load percent, 696–697 Load profiles, 696, 697–698, 698f Load summary charts, 267–269 Location, 740 See also Facilities location of services, 300 Location analysis techniques, facilities location and, 302–308, 304f Location factor rating, 302 with Excel, 303, 303f with OM Tools, 303, 303f Location factors, in U.S., 299–300 Lockheed, 379 Logistics, 455 collaborative logistics, 459–460 ITL, 465, 467 for Royal Caribbean, 457–458 simulation application for, 599 UPS Worldwide Logistics, 298, 457 web-based international trade logistics systems, 465, 467 Longest processing time (LPT), 761, 767 Long-range forecast, 500 Loop layouts, 273–274, 273f Lopp, Michael, 162 Lost sales, as capacity adjustment strategy, 614 Lost sales costs, 85 Lot, in acceptance sampling, 148 Lot sizing, 689, 689t, 692–694, 730, 731f Lot tolerance percent defective (LTPD), 149–150 Lower specification limit, 127 Low level code (LLC), 689, 689f LPT See Longest processing time LS See Latest start time LT See Lead time LTPD See Lot tolerance percent defective MAD See Mean absolute deviation Maintainability, in rapid prototyping/concurrent design, 164–165 Maintenance, 738–739, 739f, 739n6 Maintenance, repair and operation (MRO), 453f Makespan, 762, 764 E1BINDEX.qxd 8/5/10 804 10:01 AM Page 804 Index Malcolm, D G., 379 Malcolm Baldrige National Quality Award, 21, 68, 69–73, 77, 87, 93–94, 317 employee satisfaction and, 320–321 human resources management and, 320–321 PDCA and, 62 Management See also specific types of management relevance of, The Management and Control of Quality (Evans and Lindsay), 129 Management coefficients model, 626 Manager, 3, 6, 244 project manager in, 368f, 371 Managing diversity, 329–331 Manufactured products, 56, 89 services v., 73–74 Manufacturing, 263f, 280f, 299 CAD/CAM, 168, 231, 231f, 246f, 247t e-Manufacturing (eM), 246, 246f, 247t, 248t green manufacture, 172–173, 172f simulation application for, 599 Manufacturing cells, 724–726, 725f Manufacturing execution systems (MES), 706t, 773 Manufacturing systems, 599 Manufacturing technology, 246f, 247t, 248t MAPD See Mean absolute percent deviation Marginal values, 655–656, 656f Market, 232t, 728, 728f e-marketplaces, 454 upfront market, 523 Market analysis, in idea generation, 159 Marketing, 4–5, 4f ERP and, 703, 703f Marketing manager, Marriott, 70, 195, 687f Marriott Corporation, 195 Marriott International, Inc., 75 Martin Guitars, 231, 231f Maslow, Abraham, 7, 8t, 319f Mass customization, 21 Mass market, 232t Mass production, 7, 230, 230f, 231, 231f, 232t learning curves and, 339, 340f scheduling in, 756 Mass service, 195, 196f, 197f Master Black Belts, in Six Sigma, 77f, 80 Master production schedule (MPS), 626, 627f, 682–683, 682f, 683t, 684f Master scheduling, 756 Material kanbans, 729 Material requirements planning (MRP), 626, 627f, 680f, 756 See also Capacity requirements planning assemble-to-order and, 682 capacity requirements planning and, 695–700, 696f, 698f, 699f complex products and, 681–682 dependent demand and, 681–682, 682f discrete demand, 681, 682f erratic orders and, 682 item master file in, 687–688, 688t lot sizing and, 692–694 MPS and, 682–683, 682f, 683t, 684f MRP process in, 688–692, 689t, 690f outputs for, 694–695, 694t, 695t overloads in, 698–699 product structure file in, 683–685, 684f, 685t, 686f time-phased bills and, 686, 686f when to use, 680–682, 681f Materials management, ERP and, 703, 703f, 704f Matrix, 368f, 370, 758–759 C&E matrix, 65, 65f, 81f product-process matrix, 229–230, 230f service-process matrix, 195, 196f, 196t SWOT matrix, 19n2 tradeoff matrix, 176, 177f Matrix organization, 370 Matsushita, Maximax criterion, 35 Maximin criterion, 35 Mayo, Elton, 7, 8t Maytag, 745 Mazda, 161 McDonald’s, 19, 73, 75, 111, 159, 192, 193, 207f, 236f, 298, 329, 349f, 498, 614, 631, 744, 777 speed at, 238–239 McGregor, Douglas, 7, 8t, 319f Mean absolute deviation (MAD), 517–519, 520t Mean absolute percent deviation (MAPD), 519, 520t Mean (x–) chart, 119–122, 120f, 121f, 121t, 122f, 128f R-charts with, 123–125 Mean squared error (MSE), 522 Mean time between failures (MTBF), 164 Mean time to repair (MTTR), 164–165 Measure, in breakthrough strategy, 79 Medicare, 78 Memorial Hermann Hospital (Houston), 78 Mercedes, 56–57, 57f Merck, 18 Mercy Health System, 62 MES See Manufacturing execution systems Metamor, 705 Methods time measurement (MTM), 354–355 Mexican Football Federation First Division, 96, 96f Mexico, 468 MFN See Most-favored-nation Micromotion analysis, 337 Microsoft, 77, 701 Microsoft Dynamics, 706t Microsoft Project, 368f, 382, 396, 397f Gantt chart in, 396f, 397, 398f PERT analysis with, 398, 398f, 399f Microsoft Visio, 237f, 238, 747f Minimax regret criterion, 35–36 Minimum slack (SLACK), 761–763, 767 Mission statement, 18 Mixed-model assembly, in lean production, 733–734, 734f Mixed-model assembly lines, 282, 283f model sequencing and, 283–284 U-shaped assembly lines as, 283, 284f Mixed strategies, for aggregate planning quantitative techniques, 619, 621 Mixed strategy, for capacity adjustment, 612 Model formulation See also specific types of models in linear programming, 646–648 Model sequencing, mixed-model assembly lines and, 283–284 “Model to Raise Achievement and Close Gaps” (RACG), 62 Modular bills of material, 685, 686f Modular design, 166 Monarcas Morelia, 96, 96f Monitoring, 757 Gantt charts for, 768–769, 769f I/O control and, 769–771, 771f scheduling and, 768–772, 769f, 771f Monsanto, 701 Monte Carlo technique, 590–592, 591t, 592f, 592t, 593t, 594, 594t Most-favored-nation (MFN), 464 Most likely time, 389, 391 Motion study, 337–338, 338t Motivation, 319–320, 319f Motorola, 7, 69, 73, 76–77, 80, 82, 111, 130, 230, 317, 321, 323 Movement, 722f in demand behavior, 501 Move time, 730 Moving average, as time series method, 503–506, 505f MPS See Master production schedule MRO See Maintenance, repair and operation MRP See Material requirements planning MRP action report, 695, 695t MSE See Mean squared error MTBF See Mean time between failures MTM See Methods time measurement MTTR See Mean time to repair Muda (waste), 722–723, 722f, 723f Multicollinearity, 532–533 Multifactor productivity, 14, 14f Multifunctional employees, 723–724, 724f Multiple regression, with Excel, 530–533, 530f, 531f, 532f, 533f Multiple-sampling plans, for acceptance sampling, 153 Multiple-server model with Excel, 213f, 214 waiting line analysis and, 210–214, 211f, 213f Multistage process, 89–90 Muther’s grid, 269–270, 270f Nabisco, 117f, 440, 460 NAFTA See North American Free Trade Agreement NASA, 77, 92t, 341 National Bicycle Industrial Company, 21 National Health Service, 116 National Institute of Standards and Technology, 92t National Museum of American History, 369, 388 National Park Service, 702 National Quality Institute, 92t National Quality Research Center, 21 Nation groups, 464, 465f Navy, U.S., 379, 379f Navy Special Projects Office, 379 NBC Universal, 523 Near shoring, 746 near-shore suppliers, 470–471, 471f Near-sourcing, 14 Nebraska Medical Center, 78 Net requirements, 689, 689t, 690 Netting, 688, 689t New Balance Corporation, 12–13 New Orleans Restoration Project, 399–400, 400f Nike, 704 reuse and, 173–174, 174f 9/11, 378, 378f, 472–473, 533 Nintendo, 10 Nissan, 321, 742 Nokia, 170 Nokia Siemens Networks, 373 Nominal value, 127 Nonadjacent, 267–269 Nonadjacent loads, 267–268 Nonconformance, 83, 87 Non-instantaneous receipt model, 567–569, 567f E1BINDEX.qxd 8/5/10 10:01 AM Page 805 Index Normal activity cost, 401–402, 401f Normal distribution, 113f of project time, 393, 394f Normal time, 350 North American Free Trade Agreement (NAFTA), 464, 468 North Carolina Baptist Hospital, 78 North Shore University Hospital, 64, 79–80 Norton, David, 23 Norway, 10, 10f, 16f Notified bodies, 97 Objective function, in linear programming, 647 Objectives, 22, 23t, 261–262, 757 OBS See Organizational breakdown structure Observation sheet, for time studies, 352f, 353, 353f OC See Operating characteristic (OC) curve OECD See Organization for Economic Cooperation and Development OEM See Original equipment manufacturer Ohio, 299 Ohno, Taiichi, 721, 723–724, 726, 737–738 Olympic Stadium (London), 386, 386f OM application, for linear programming, 646t OM Tools acceptance sampling with, 151 center-of-gravity technique with, 306, 306f CPM/PERT and, 393–395, 393f, 394f decision analysis with, 37–38, 37f EOQ models with, 570, 570f forecasting and, 526, 526f learning curves and, 342, 342f load-distance technique with, 307, 308, 308f location factor rating with, 303, 303f probabilistic network analysis and, 393–395, 394f process capability with, 132, 133f SPC with, 126–127, 127f, 128f time study number of cycles with, 354f transportation model and, 480, 480f work sampling and, 358f On-demand (direct-response) delivery, 452 One-step expansion, incremental expansion v., 259f Open-Access system, in scheduling, 767–768 Operating characteristic (OC) curve, 150–151, 150f Operating costs, of technology, 245 Operating requirements, in QFD, 179, 179f Operations, 2, 2f, 4f, SCOR, 442–443, 442f, 443t Operations management, 599 evolution of, 6–9 function of, 2–6 historical events in, 8t manager responsibility in, Operations Research, 8t Operations sheets, 235, 236f Operations strategy See also Sales and operations planning core competencies in, 18 definition of, 17 firm positioning in, 19–21, 20f order winners/order qualifiers in, 18–19, 19f primary task in, 17–18 strategy deployment in, 21–25, 22f, 23t, 24f, 25f Operator costs, 84 Opportunity cost matrix, 758–759 Opryland Resort, 436 Optimal solution, 650 Optimistic time, 389, 391 coefficient of optimism, 36 Oracle, 170, 705, 706t Order cycle, 564–567, 564f, 565f See also specific types of orders Order fulfillment, 455, 456f Ordering costs, 558 Order qualifiers/winners, 18–19, 19f Organizational breakdown structure (OBS), 372, 373f Organizational structure, 5f Organization for Economic Cooperation and Development (OECD), 14 Original equipment manufacturer (OEM), 453f Outputs, 16–17, 16f for MRP, 694–695, 694t, 695t Outsourcing, 7, 8t, 13–14 cost and, 228–229 distribution outsourcing, 460 process planning and, 228–229 procurement and, 452, 453f Overbooking, 631, 633t Overflow frequency, 768 Overloads, 698–699 Overproduction, 722f Overtime/undertime, as capacity adjustment strategy, 613 Owens Corning, 701 Pabst Brewing Company, 21 PAC See Production activity control Package carriers, 461–462, 461f Palm, 440 Palm Inc., 454 Pareto, Vilfredo, 65 Pareto analysis, 63f, 65–66, 66f Park Place Lexus, 94 Participative problem solving, 71 Partnering, 69 Parts deployment, 178–179, 179f Part-time employees as capacity adjustment strategy, 613–614 human resources management and, 325–327 Patagonia, 173 Patient scheduling, 767–768 Pattern test, in control charts, 125 Payoff, 34 Payoff tables, 34–36, 34f Pay types, of employee compensation, 327 p-Charts, 113–117, 115f, 125 PDCA See Plan-do-check-act PDM See Product data management Peak demand, as capacity adjustment strategy, 613 Pella Corporation, 745 Pentagon, project management at, 378, 378f PeopleSoft, 325 PepsiCo, 330 Perceptions, of manufactured products, 56 Perceptual maps, 159, 159f Performance, 262 See also Supply chain performance measurement judging, 350 KPIs, 23–24, 23t, 439–440 in manufactured products, 56 of time studies, 351 Performance management, in project control, 377–378 Performance requirements of a task, 333 Performance specifications, 194f, 195 Periodic inventory systems, 560, 577, 578f Periodic inventory system order quantity, 577 with Excel, 578, 579f with variable demand, 578 805 Periodic order quantity (POQ), 692–694 Periodic review system, 560 Perpetual system, 559, 560f PERT See Program evaluation and review technique PERT analysis, 398, 398f, 399f Pessimistic time, 389, 391 coefficient of pessimism, 36 PFA See Production flow analysis Pfizer, 440 Phantom bills, 685 Philips Electronics, 427 Philips Optical Storage, 427 Philips Semiconductors, 427 Piecemeal analysis, of technology, 246 Piece-wage system, 318 incentive piece-rate system, 349, 351–352 Pipelines, for transportation, 461f, 462–463 Pixar, 159, 160 Pizza Hut, Plan-do-check-act (PDCA), 60–61, 61f, 76 Baldrige Awards and, 62 Plank, Kevin, 704–705, 705f Planned order receipts, 689, 689t Planned order releases, 689, 689t, 692 Planned order report, 692, 694, 694t Planning See also specific types of planning available-to-promise, 628–629, 630f collaborative planning, 628 hierarchical nature of, 626, 627f, 628–629, 630f PLM See Product lifecycle management Point of indifference, 234, 235f Point-of-sale data, 433 Poisson distribution, 201–202, 209, 212 Poke-yoke (visual quality control), 735, 736f Polaris Missile Project, 379 Policy deployment action plan in, 22f in strategy deployment, 21–23, 22f POQ See Periodic order quantity Positioning strategy, 20, 20f cost in, 19 flexibility in, 21 quality in, 21 speed in, 19, 22 SWOT matrix in, 19n2 Postal Service, U.S., 205, 455, 456f, 461 Postponement, distribution and, 457–458 Poudre Valley Health System (PVHS), 70, 320 Power sources, 262 PPI See Product Price Indices PPM See Defective parts per million Precedence diagram, 274, 276–277 Precedence relationship, 376–377, 376f Precedence requirements, 274 Predetermined motion times, 354–355, 355t Predictive maintenance, 739n6 Premium seats, 633t President’s Quality Award, 92t, 93 Prevention costs, 84, 85f Preventive maintenance, 738 Price-downgrading costs, 84 Primary task, in operations strategy, 17–18 Principles of motion study, 337–338, 338t Probabilistic activity times, 389–392, 390f, 392f Probabilistic analysis, of project network, 394–395 Probabilistic network analysis, CPM/PERT analysis/OM Tools and, 393–395, 394f Probabilities decision analysis with, 38–39 decision analysis without, 34–36, 34t Probability distribution, of demand, 591t E1BINDEX.qxd 8/5/10 806 10:01 AM Page 806 Index Problem solving DMAIC for, 78–80 employees for, 72 Process(es) definition of, 228 of forecasting, 502–503, 502f function to, 242f types of, 232t Process analysis, 235, 706 Process capability, 128–129 design specifications and, 129f with Excel/OM Tools, 132, 132f measures of, 130–132 6-sigma quality in, 129f, 130 Process capability index (Cpk), 131–132 Process capability ratio (Cp), 130–132 Process control, 67, 246f, 248t, 441–442 See also Statistical process control Process costs, 84 Process downtime costs, 84 Process failure costs, 84 Process flowcharts, 235–236, 238f, 239f, 241f definition of, 335 with Excel, 237f, 239 for jobs, 335, 336f process map v., 238, 240f as quality tool, 63f, 64 swimlane chart, 238, 240f symbols for, 335f Process improvement teams, 72–73 Process industries, 756 Processing, 722f Processing time, 730–763, 767 Process innovation definition of, 241, 241n1 steps in, 241–244, 241f, 242f, 242n2, 243f, 243t, 244t Process layouts in basic layouts, 262–264, 263f, 264f, 265t with Excel, 270f Process layouts design block diagram in, 267–269 relationship diagramming in, 269–272, 270f, 271f Process manager, 244 Process map, 238, 240f high-level process map, 242–243, 242f, 243f Process planning, 246f, 247t See also Process flowcharts definition of, 228 outsourcing and, 228–229 process analysis in, 235 process plans in, 235 process selection in, 229–235, 229f, 230f, 231f, 232f, 232t in QFD, 179, 179f Process plans, in production design, 167 Process selection with breakeven analysis, 230–236, 231f, 232f, 232t in process planning, 229–235, 229f, 230f, 231f, 232f, 232t Process strategy, 228 Process technology, 246f, 247t Procter & Gamble, 170, 430 Procurement, 246f, 247t, 422, 425f, 451, 453–455 outsourcing and, 452, 453f Producer’s risk, 149–150 Product configuration, 246f, 247t Product cost per unit, 89 Product data management (PDM), 246f, 247t Product design See also Design technology design process in, 157–160, 158f, 159f for environment, 170–181, 171f, 172f, 173f, 175f, 176f, 177f, 178f, 179f, 180f rapid prototyping/concurrent design in, 160–167, 161f, 162f, 163f, 164f, 164n1, 166f for robustness, 179–181, 180f technology in, 167–170, 168f, 169t, 170f Product-design costs, 84 Production See also Aggregate planning quantitative techniques ERP and, 703, 703f, 704f Production activity control (PAC), 757 Production control department, 757 Production design definition of, 165 DFM in, 167 final design/process plans in, 167 modular design in, 166 in rapid prototyping/concurrent design, 165–167, 166f simplification in, 166, 166f standardization in, 166 Production flow analysis (PFA), 278–280, 279f, 280f Production index, 85 Production kanban, 727 Production quantity model, 567–569, 567f Production systems, 599, 721, 743 Production workers, hourly compensation costs for, 10, 10f Productivity, 15f, 92t, 262 calculating, 15 competitiveness and, 14–17 definition of, 14, 87 labor hours and, 16, 16f measures of, 14, 14f product manufacturing cost and, 88–89 QM and, 87–91 quality impact on, 88 yield v., 88 Productivity growth (2008), 16, 16f Product layout design, 274–278 Product layouts, 264–265, 264f, 265f, 265t Product liability costs, 85 Product lifecycle management (PLM), 168, 246f, 247t, 706t, 708, 708f Product manufacturing cost product cost per unit in, 89 productivity and, 88–89 product yield in, 89 Product Price Indices (PPI), 436 Product-process matrix, 229–230, 230f Product return costs, 85 Product structure file, 683–685, 684f, 685t, 686f Product technology, 246f, 247t Professional service, 195, 196f, 197f Profit, 232 sensitivity range for, 656–657, 657f Six Sigma and, 82, 82f, 83f Profit sharing, 328 Program evaluation and review technique (PERT), 379 See also CPM/PERT Prohibited route, 479 Projects, 79, 229, 230f, 231, 231f, 232t, 367 scheduling for, 756 Project control communication in, 378 cost management in, 377 enterprise project management and, 379 in project management, 377–379, 378f QM in, 377 time management in, 377 Project crashing, 400–402, 401f, 402f, 403f time v cost in, 403–404, 404f Projected on hand, 689, 689t, 694t Project management CPM/PERT in, 379–388, 379f, 380f, 381f, 383f, 384f, 385f, 386f, 387t, 388f global/diversity issues in, 373–375 9/11 and, 378, 378f plan elements and, 369 probabilistic activity times in, 389–392, 390f, 392f process of, 368f project control in, 377–379, 378f project crashing in, 400–403, 401f, 402f, 403f project manager in, 368f, 371 project planning in, 367, 368f, 369–373, 372f, 373f project return, 369–370 project team in, 368f, 370, 374 RAM in, 368f, 372, 373f scheduling in, 375–377, 376f scope statement in, 371 SOW in, 371 WBS in, 368f, 371–372, 372f, 378 Project network CPM/PERT and, 380, 380f probabilistic analysis of, 394–395 Project planning, 367, 368f, 369–373, 372f, 373f Project scheduling, 375 Gantt chart for, 376–377, 376f Project team, 368f, 370, 384 PROMODEL, 272 Prototyping/concurrent design, 167 See also Rapid prototyping/concurrent design Psychographics, 192 Psychology, 205–206, 205f Pull system, 726, 744, 744f See also Kanban Purchase cost, of technology, 245 Purchase orders, 694 Purchasing agents, 466f Pure strategies for aggregate planning quantitative techniques, 616–617, 617f, 618f for capacity adjustment, 612 Purodenso Manufacturing, 727f Push system, 726 PVHS See Poudre Valley Health System Pyramid of Human Needs, 319f QAD, 706–707 QFD See Quality function deployment QIT See Quality improvement teams QLF See Quality loss function QM See Quality management QMS See Quality management system QRD See Quality resources department Qualitative classification method, 111 Qualitative forecast methods, 496 Quality, 129f, 130, 368f See also Statistical process control AOQ/AOQL, 152, 152f, 153f AQL, 149–150 ASQ, 21, 55, 69, 92t, 97 China v., 472 of conformance, 179 consistency of, 6, 180 from customer’s perspective, 56 definition of, 55 of design, 56, 179 design quality reviews, 169–170, 169t, 170t E1BINDEX.qxd 8/5/10 10:01 AM Page 807 Index in distribution, 455 employees role and, 70–73 house of, 175, 175f, 176f, 177f, 178f, 179f for manufactured products, 56 meaning of, 59f outsourcing and, 229 poke-yoke and, 735, 736f in positioning strategy, 21 productivity and, 88 quality circles and, 72, 72f, 323 in services, 56–57, 57f, 73–75, 74f, 76f SPC and, 110–111 Toyota and, 743 TQM, 8t, 67–68, 75, 82, 109, 149 Quality awards, 92t, 93t Malcolm Baldrige National Quality Award, 21, 62, 68, 69–73, 77, 87, 93–94, 317, 320–321 Quality circles, 72, 72f, 323 Quality-control checksheets, 235 Quality costs, 83 for good quality, 84 measuring/reporting, 85, 85f, 86f, 87 of poor quality, 84–85 quality-cost relationship, 87 Quality function deployment (QFD), 81f benefits of, 179 competitive assessment in, 175f, 176 customer requirements in, 175–179, 175f, 176f, 177f, 178f, 179f design characteristics in, 176, 176f in environment design, 173–179, 174f, 175f, 176f, 177f, 178f, 179f house of quality in, 175, 175f, 176f, 177f, 178f, 179f operating requirements in, 179, 179f parts deployment in, 178–179, 179f process planning in, 179, 179f target values in, 177–178, 177f tradeoff matrix in, 176, 177f Quality improvement teams (QIT), 72–73 Quality Is Free (Crosby), 82 Quality loss function (QLF), 180–181, 180f Quality management (QM), 67, 75, 110, 377 customer satisfaction and, 68, 68f forecasting and, 498 “green” supply chains and, 429–430, 430f human resources and, 317–318 inventory and, 556–557 inventory management and, 555 productivity and, 87–91 in supply chain, 68–69 Quality management system (QMS), 68–69 See also Six Sigma evolution of, 59–62, 60f, 60t, 61f, 61t Quality of conformance, 58 Quality planning costs, 84 Quality-productivity ratio, 90–91 Quality resources department (QRD), 116 Quality Revolution, 7, 8t Quality tools, 62–63 cause-and-effect diagrams as, 63f, 64–65, 64f, 65f cause-and-effect matrix as, 65, 65f, 81f checksheets/histograms as, 63f, 65 Pareto analysis as, 63f, 65–66, 66f process flowcharts, 63f, 64 scatter diagrams as, 63f, 66 Quality Without Tears (Crosby), 87 Quantitative classification method, 111 Quantitative forecast methods, 496 Quantitative techniques, 199 See also Aggregate planning quantitative techniques Quantity, 560f, 567–569, 567f, 577–578, 579f, 599, 632–634, 633t, 692–694 See also Economic order quantity; Material requirements planning Quantity discounts, 570 with constant carrying cost, 571–573, 571f with Excel, 573, 573f Quasar, Queue, 200, 202, 209f, 210, 210f See also Waiting lines Queue discipline, 202 Queuing theory, 200 Quick setups, 730–732, 731f, 732f, 733f RAB See Registrar Accreditation Board RACG See “Model to Raise Achievement and Close Gaps” Radio frequency identification (RFID), 246f, 248t, 433–434, 434f, 435f, 740, 740n7, 768 Railroads, 460, 461f RAM See Responsibility assignment matrix Ramachandran, Vignesh, 687 Random numbers, 591, 592t, 593t Random variations, 500, 500f Range (R-) chart, 119, 121t, 122–123, 127f, 132f x– charts with, 123–124, 125 Rapid prototyping/concurrent design, 160, 161f, 162, 162f form design in, 161 functional design in, 163 maintainability in, 164–165 production design in, 165–167, 166f reliability in, 163–164, 163f, 164f, 164n1 usability in, 165 Rated capacity, 696 R-chart See Range (R-) chart Recession, 271–272 Recycling/re-use, 171, 173, 261–262 Redback Networks, 707 Redbox, 193–194 Regional location factors, 299–300 Registrar Accreditation Board (RAB), 97 Regression forecasting methods, 501, 526 correlation, 529 linear regression, 527–528, 528f multiple regression with Excel, 530–533, 530f, 531f, 532f, 533f regression analysis with Excel, 529–530, 529f, 530f Regression (causal) forecasting methods, 501 Relationship diagram, 269–272, 270f, 271f Reliability, 56, 229 in rapid prototyping/concurrent design, 163–164, 163f, 164f, 164n1 Remington-Rand, 379 Reorder cards, 559 Reorder point, 573 with Excel, 576, 577f safety stocks and, 574, 574f, 575f service level and, 574–575 with variable demand, 575–576, 576f Replacement analysis, of technology, 245 Request for quotes (RFQ), 168 Rescheduling notices, 694 Research and development (R&D), 159 Resource planning, 679–695, 680f, 681f, 682f, 683t, 684f, 685t, 686f, 687f, 688t, 689t, 690f, 694t, 695t Resource requirements plan, 627f, 628, 700 Responsibility assignment matrix (RAM), 368f, 372, 373f Retail facilities, 298 807 Return on investment (ROI), 369 Revenue, 232 total revenue, 232–233, 234f Revenue enhancement, of technology, 245 Revenue management, 631–634, 632f, 633t Reverse auctions, 454–455 Reverse engineering, in idea generation, 159 Reverse globalization, 470–472 Rework costs, 84 RFID See Radio frequency identification RFQ See Request for quotes Rim requirements, 476–477 Risk, 34, 149–150, 245 Risk analysis/quality control, 368f Risk pooling, 427–428 Ritz-Carlton Hotel Company, 21, 70, 74–75, 74f, 76f, 111f, 117–118, 317, 320, 349f Robots, 246f, 247t Robust design, 179–181, 180f ROI See Return on investment Rolls Royce, 230 Rough-cut capacity plan, 627f, 628, 700 Row reductions, 758 Royal Caribbean, 457–458 Royal Mail (United Kingdom), 78 Royal Shakespeare and Company Theater, 369, 388, 388f Run, in control charts, 125 Russian Federation, 11f Saas, 709 Safety, 56, 472 Safety stocks, 574, 574f, 575f Sales, 85, 614, 703, 703f Sales and operations planning (S&OP), 608–611, 609f, 610f, 611f Sales index, 85 Salinas, Ricardo, 96 Sample, 109 Sample points, 112–113, 112f Sample size determination, 125–126 Sampling plan, 149 Sanders, Nicole, 742 SAP, 438, 705–706, 706t, 709, 772 SAP AG, 701 SAS Airlines, 193 Saudi Arabia, 370 Scatter diagrams, 63f, 66 SCC See Supply Chain Council Scheduled receipts, in MRP process, 689, 689t Scheduling, 6, 324, 368f, 383–386, 383f, 384f, 385f, 626, 627f, 694, 700, 738, 756 advanced planning and, 772–774, 773f backward/forward scheduling, 686, 686f for employees, 777–779, 778f loading and, 757–761, 760f monitoring and, 768–772, 769f, 771f patient scheduling, 767–768 in project management, 375–377, 376f sequencing and, 761–768, 764f, 765f, 766f theory of constraints and, 774–775, 776f, 777 Schlitz Brewing Company, 21 Scientific management, 7, 8t, 318 SCM See Supply chain management Scope, 368f Scope statement, 371 SCOR See Supply Chain Operations Reference (SCOR) model Scrap costs, 84 SDR See Search decision rule Search decision rule (SDR), 623 Sears, 317 E1BINDEX.qxd 8/5/10 808 10:01 AM Page 808 Index Seasonal adjustments, as time series methods, 514–516, 514f, 517f Seasonal factor, 515–516 Seasonal pattern, 500f, 501 Secure freight initiative, 473 Sensitivity analysis, 651, 655 Sensitivity range, 656–657, 656f, 657f Sequencing, 278, 757 model sequencing, 283–284 one serial process and, 762–764, 764f rule selection for, 766–768 scheduling and, 761–768, 764f, 765f, 766f two serial processes and, 764–766, 766f Sequencing rules, 764f, 766–767, 766–768 Sequential decision trees, 39–41, 40f, 41f Service(s), 111, 300, 556, 574–575 See also Lean services aggregate planning for, 630–634, 632f, 633t characteristics of, 191–193, 191f connectivity/integration and, 708–709 customer contact v., 192, 196f, 196t goods v., 191, 191f, 193 human resources v., 316 manufactured products v., 73–74 process layout in, 263f professional service, 195, 196f, 197f psychographics and, 192 quality in, 56–57, 57f, 73–75, 74f, 76f simulation application for, 599 time/timeliness of, 56, 74, 202, 209f, 210 Serviceability, 164–165 Service blueprinting, 198, 198f, 199f Service concept, 194–195, 194f Service defect, 111 Service design, 196 front office/back office in, 198f, 199, 199f process of, 193–195, 193f, 194f quantitative techniques in, 199 service blueprinting in, 198, 198f, 199f service economy and, 190, 190f, 191f service-process matrix in, 195, 196f, 196t, 197, 197f Service facilities, 298 Service factory, 195, 196f, 197f Service improvement, 208–210, 209f, 210f See also Waiting line analysis Service layouts design, 273–274, 273f Service level, 556, 574–575, 630 ServiceMaster, 192 Service operations, 599 Service-oriented architecture (SOA), 709 Service package, 194f, 195 Service-process matrix, 195, 196f, 196t, 197, 197f Service providers, 13–14, 422, 556 Servicescapes, 199 Service shop, 195, 196f, 197f Service times, 202, 209f, 210 SETUP See Similar setup Setup times, 730–732, 731f, 732f, 733f 7-Eleven, 432–433 SFC See Shop floor control Shadow prices, 655–656, 656f Shakespeare, William, 388 Sharp HealthCare (San Diego), 78, 93–94, 320 Shewhart, Walter, 60, 60t Shingo, Shigeo, 731 Shop floor control (SFC), 757 Shop floor scheduling, 626, 627f Shortage costs, 558–559 Shortest processing time (SPT), 761–763 for sequencing rule, 767 Short- to mid-range forecast, 499–500 Shouldice Hospital, 195 Siemens, 469, 706t Sierra Club, 430 Signal kanbans, 728–729, 728f Signal-to-noise ratio, 180 Similar setup (SETUP), 761 Simplex method, for linear programming model solution, 652 Simplification, in production design, 166, 166f Simulation, 274 decision making with, 596–597, 597f, 598f with Excel, 594–598, 595f, 596f, 597f, 598f Monte Carlo technique, 590–592, 591t, 592f, 592t, 593t, 594, 594t sequencing rule and, 766–767 Simulation application, 598–600 Single-factor productivity, 14, 14f Single-minute exchange of dies (SMED), 731–732 Single order quantities, 632–634, 633t Single-sample attribute plan, 149 Six Sigma, 64, 68 Black Belts/Green Belts in, 77f, 80 breakthrough strategy of, 79–80 champion in, 79 definition of, 77 DFSS for, 80 goal of, 76–77, 77f highlights of, 78 improvement projects of, 79 lean and, 746 Lean Six Sigma, 80–82, 81f process of, 78 profit and, 82, 82f, 83f tools of, 81f SLACK See Minimum slack Slack, 376, 391–392 activity slack and, 386–387, 387t minimum slack, 761–763, 767 Slack variables, 653, 653f, 654f SLIM See Store Labor and Inventory Management Smallest critical ratio (CR), 761 Small lots, in lean production, 730, 731f SmartDraw, 238 SMED See Single-minute exchange of dies Smith, Adam, 6, 8t Smoothing constant, 507 See also Adjusted exponential smoothing; Exponential smoothing Snead, John, 701–702 SOA See Service-oriented architecture Society for Human Resource Management, 329 Sony, 10, 77, 430 S&OP See Sales and operations planning Sourcing, 14, 172, 271–272, 452, 469 SOW See Statement of work Space, 608, 649 SPC See Statistical process control Special Operations Command, U.S., 70 Speed, 19, 22, 229 See also Time studies in distribution, 455 at McDonald’s, 238–239 Spine layouts, 273–274, 273f SPT See Shortest processing time Sri Lanka, 10, 10f Standard for exchange of product model data (STEP), 246f, 247t Standardization, 166, 231, 231f See also International Organization for Standardization Standard time, 318, 348–350, 354 Starbucks, 75 Statement of work (SOW), 371 State University of New York at Buffalo, 373 Statistical process control (SPC) basics of, 109–112 with Excel/OM tools, 126–127, 127f, 128f QM and, 110 quality measures and, 110–111 services and, 111 Statistical Process Control (SPC) Chart, 81f Stay on schedule, 368f Steady state, 204, 204t Steady-state result, 594 STEP See Standard for exchange of product model data Stockout, 574 Stopwatch time study, 349–352, 349f, 352f, 353f Store Labor and Inventory Management (SLIM), 274 Store layouts, 273–274, 273f Strategic analysis, in feasibility study, 160 Strategic planning, 17f, 499, 616–617, 617f, 618f, 621 See also specific types of strategies Strategy deployment balanced scorecard in, 23–24, 23t, 24f, 78 in operations strategy, 21–25, 22f, 23t, 24f, 25f policy deployment in, 21–23, 22f Strengths, weaknesses, opportunities, threats (SWOT matrix), 19n2 Subcontracting, 613 Sunny Fresh Foods, 93, 320 Supermarkets (kanban racks), 728, 728f Supplier kanbans, 729 Supplier networks, in lean production, 739–740 Suppliers, 4, 4f near-shore, 470–471, 471f as upstream, 421 Supply chains, 68–69, 421–423, 423f See also specific types of supply chains Supply Chain Council (SCC), 442 Supply chain enabler, information technology as, 431–437, 431f, 434f, 435f, 436f Supply chain integration, 437–438, 438t Supply chain management (SCM), 8–9, 9f, 68–69, 246f, 248t, 423, 424f, 707–708, 708f bullwhip effect and, 426–427, 426f forecasting and, 496–499, 497f inventory management in, 555–556 risk pooling and, 427–428 software for, 438 supply chain uncertainty/inventory, 424–426, 425f Supply Chain Operations Reference (SCOR) model, 442–443, 442f, 443t Supply chain performance measurement KPIs in, 439–440 process control in, 441–442 SCOR and, 442–443, 442f, 443t Supply chain uncertainty, 424–426 Surplus variables, for linear programming model solution, 653 Sustainability See also “Green” supply chains at Apple, 441 costs and, 324, 372–373, 428–430 at Hewlett-Packard, 467 packing materials and, 456 Sustainable competitive advantage, 18 Swimlane chart, 238, 240f Swiss Quality Award, 93t SWOT matrix See Strengths, weaknesses, opportunities, threats Synchronous manufacturing, 774–777, 776f Sysco Corporation, 462