Preface Ins Manual

7/21/2019 Preface Ins Manual

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A N O T E T O I N S T R U C T O R S

T H E C O V E R A N D T H E T I T L E

Operations and Supply Management: The Core derives its title from a combinationof ideas and trends. First, in order to be lean and focused, the book presents the im-portant core ideas. A review by Professor Jacobs of the syllabi of over a dozen repre-sentative U.S. universities revealed that, as expected, there was a wide variety of top-ics covered; all of which would lead naturally to a comprehensive text such asOperations Management for Competitive Advantage. The topics covered in all of thesesampled schools, i.e., the consistent or Core topics, is what this text includes, and onlythose.

In addition to that study, the authors participated in a two-session meeting chairedby Mark Berenson at the National DSI meeting in Boston in which faculty suggestedthat four areas ought to be considered core in Operations Management courses.These areas are Processes, Quality, Inventory, and Supply Chain Management,

roughly similar to the sections of this text.Finally, as is well known in the field, success for companies today requires success-

fully managing the entire supply flow, from the sources of the firm, through the value-added processes of the firm, and on to the customers of the firm.

The cover illustration might be considered symbolic or representative of the core aswell as the supply flow.

Just as lava flows from the core of the earth, operations and supply management isthe core of business. Materials must flow through supply processes to create cash out-put and profits.

In Operations and Supply Management: The Core, we take students to the center ofthe business and focus on the core concepts and tools needed to ensure that theseprocesses run smoothly.

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Instructors Walkthroug

The following section

highlights the key features

developed to provide you

with the best overall teaching

text available. We hope these

features give you maximum

support while allowing you

to tailor your course to fit the

needs of your students.

Chapter Opener

Chapter10DEMANDMANAGEMENTANDFORECASTING

Afterreadingthechapteryouwill:1. Understandtheroleofforecastingasabasisforsupplychainplanning.

2. Knowhowindependentdemandanddependentdemanddiffer.3. Knowthebasiccomponentsofindependentdemand:average, trend,seasonal,and

randomvariation.4. BecomefamiliarwithcommonqualitativeforecastingtechniquessuchastheDelphi

method.5. Know how to make time series forecasts usingmoving averages, exponential

smoothing,andregression.6. UnderstandhowtheInternetisusedtoimproveforecasting.

250 Wal-MartsDataWarehouse251 DemandManagemen

tDependentdemanddefinedIndependentdemanddefined

252 TypesofForecasting

Timeseriesanalysisdefined252 ComponentsofDemand254 QualitativeTechniquesinForecastingMarketResearch

PanelConsensusHistoricalAnalogyDelphiMethod

256 TimeSeriesAnalysisSimpleMovingAverageExponentialsmoothingdefined

WeightedMovingAverageSmoothingconstantalpha()defined

ExponentialSmoothingSmoothingconstantdelta()defined

ForecastErrorsMean

absolutedeviation(MAD)defined

SourcesofError

Trackingsignaldefined

MeasurementofErrorLinearregressionforecastingdefined

LinearRegressionAnalysis


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I-iv INSTRUCTORSWALKTHROUGH

A P P L E S I P O D H A S I T S O W N P R O D U C T

D E V E L O P M E N T T E A MHow does Apple develop the innovative products it sells? Apple has two separate product

development teams, one organized around its Macintosh computer and the other focused

on the iPod music player. By organizing this way Apple can precisely focus resources on its

amazingly successful products. The iPod has reinvigorated Apple and its bottom line over

the past two years.

Much of theunderlying iPod designwas performed byoutsidecompanies. Consumer elec-

tronics is a fast moving area and using established experts linked together in what could be

called a design chain, Apple was ableto quickly bring the iPod to market.

Apple developed a layered project

that relied on a platform created by a

thirdparty, PortalPlayer,ofSantaClara,

California.PortalPlayerhad developed

a base platform for a variety of audio

systems, including portable digital

music devices, general audio systems,

andstreamingaudio receivers.

Apple started with a vision of

what theplayer shouldbeandwhat it

should look like. The subsequent de-

sign parameters were dictated by its

appearance and form factor. That outside-in perspective helped determine a number of the

components, including the planar lithium battery from Sony and the 1.8-inch Toshiba hard

Opening Vignettes

Each chapter opens with a short vignette to set the stage and help pique studentsinterest in the material about to be studied. A few examples include:

IKEA, Chapter 1, page 5

iPod, Chapter 2, page 21

DHL, Chapter 5, page 107

Solectron, Chapter 9, page 224


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INSTRUCTORSWALKTHROUGH I-v

The Motorola RAZR Cell Phone

The unique design process Motorolas team used for the newhit product.

Breakthrough

chargerport, andso on.Scheduled foran hour, themeetingsfre-

quently ran past 7 P.M. The thin clam project became a rebel

outpost. Money wasnt an object or a constraint, but secrecyandspeed were. Theteam prohibited digital picturesof thepro-

ject so that nothing could be inadvertently disseminated by

e-mail. Models of the phone could leave the premises only

when physically carried or accompanied by a team member.

There were two key innovations that allowed the team to make

quantum leaps in thinness, one of the key design features they

aimed at. The first was placing the antenna in the mouthpiece

of the phone instead of at the top. While this had not been

done in cell phones before, it was also a technical challenge.

The second brainstorm was rearranging the phones innards, pri-

marily by placing the battery next to the circuit board, or inter-

nal computer, rather than beneath it. That solution, however,

created a new problem: width. Motorolas human factors ex-

perts had concluded that a phone wider than 49 millimeters

wouldnt fit well in a persons hand. The side-by-side design

yielded a phone 53 millimeters wide. But the RAZR team didnt

accept the companys research as gospel. The team made its

own model to see how a 53-millimeter phone felt and in the

end, theteammembers decided ontheirownthatthe company

was wrong and that four extra millimeters were acceptable.

Thecompanysold its 50-millionthRAZR in June2006! Motorola

will sell more RAZRs this year than Apple will iPods. Several key

players fromthe RAZRdevelopmentteam were asked to appear

at a meeting of top executives at company headquarters. They

werent told why. Then, as the team members filed in, the

Motorola brass awaiting them raised in applause, delivering a

standing ovation. Team members were also told they would berewarded witha significant bonusof stock options.

The new Motorola RAZR was incubated and hatched in color-less cubicles in Libertyville, a northern Chicago suburb. It was a

skunkworks project whose tight-knit team repeatedly flouted

Motorolas own company rules for developing new products.

They kept the project top-secret, even from their colleagues.

They used materials and techniques Motorola had never tried

before. After contentious internal battles, they threw out ac-

cepted models of what a mobile telephone should look and

feel like. In short, the team that created the RAZR broke the

mold, and in the process rejuvenated the company.

To design the look and feel as well as the internal configuration

of a telephone takes a team of specialists, in the case of the

RAZR about 20people. The full team metdaily at4 P.M. inacon-

ference room in Libertyville to hash over the previous days

progress as they worked down a checklist of components: an-tenna, speaker, keypad,camera,and display, light source,battery,

Adapted from RAZRS edge, Fortune Magazine,June 1, 2006.

Breakthrough Boxes

The Breakthroughs provide examples or expansions of the topics presented byhighlighting leading companies practicing new, breakthrough ways to run their

operations. Examples include: America West Boarding, page 8

Motorola RAZR Design, page 24

J. D. Power and Associates Defines Quality, page 141

Capability Sourcing at 7-Eleven, page 191


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I-vi INSTRUCTORSWALKTHROUGH

Example 5.1: Customers in Line

Western National Bank is considering opening a drive-through window for customer service. Man-

agement estimates that customers will arrive at the rate of 15 per hour. The teller who will staff the

window can service customers at the rate of one every three minutes or 20 per hour.

Part 1 Assuming Poisson arrivals and exponential service, find

1. Utilization of the teller.

2. Average number in the waiting line.

3. Average number in the system.

4. Average waiting time in line.

5. Average waiting time in the system, including service.

SOLUTIONPart 1

1. The average utilization of the teller is (using Model 1)

=

=

15

20= 75 percent

2. The average number in the waiting line is

Lq =2

( )=

(15)2

20(20 15)= 2.25 customers

3. The average number in the system is

Ls =

=15

20 15

= 3 customers

4. Average waiting time in line is

Service

ExcelQueue.xls

Examples with Solutions

Examples follow quantitative topics and demonstrate specific procedures andtechniques. Clearly set off from the text, they help students understand thecomputations.


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INSTRUCTORSWALKTHROUGH I-vi

Supply Chain

These icons highlight areas witha direct link to supply chain

management.

Global

Global icons identify internationalexamples and text discussion.

Cross FunctionalThese icons highlight areaswhere operations managementconcepts link and integratewith other business functions.

Interactive OperationsManagement

These icons direct students toInteractive OperationsManagement Java applets thatare available on the text Web site

Internet

These icons highlight exercisesthat direct students to theInternet for research.

SupplyChain

Global

Excel

These icons point out conceptswhere Excel templates areavailable on the DVD and textWeb site.

CrossFunctional

InteractiveOperationsManagement

Internet

Excel

Tutorials

The tutorial icons highlight linksto the ScreenCam tutorials on theDVD included with the text.

Tutorials


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I-viii INSTRUCTORSWALKTHROUGHI-viii INSTRUCTORSWALKTHROUGH

MANUFACTURING PROCESSES chapter 4 83

e x h i b i t 4 . 1ProductProcess Matrix: Framework Describing Layout Strategies

ManufacturingCell

Project

Low Product Volume High

Low

one-of-a-kind

Highstandardizedcommodity

product

ProductStandardization

Workcenter

AssemblyLine

ContinuousProcess

Photos and Exhibits

Over fifty photos and over two hundred exhibits are included in the text, to enhancethe visual appeal and clarify text discussions. Many of the photos illustrateadditional examples of companies that utilize the operations and supply chainconcepts in their business.

TOYOTAPRIUSES AND OTHER VEHICLES CLAD IN

PROTECTIVE COVERING AWAIT SHIPMENT TO

U.S.DEALERS AT THELONGBEACH, CA, PORT.

IN2006 THE VALUE OF THE COMPANYS

INVENTORY TOTALED ABOUT 1.62 TRILLION

AND THE COST OF GOODS SOLD WAS

15.73 TRILLION. SOTOYOTAS INVENTORY

TURNED OVER ABOUT9.7 TIMES PER YEAR, OR

ROUGHLY38 DAYS OF INVENTORY ON HAND.


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INSTRUCTORSWALKTHROUGH I-ix

S o l v e d P r o b l e m s

SOLVED PROBLEM 1

Sunrise Baking Company markets doughnuts through a chain of food stores. It has been experi-

encing over-and underproductionbecause of forecastingerrors.The followingdata are its demand

in dozens of doughnuts for the past four weeks. Doughnuts are made for the following day; for

example, Sundays doughnut production is for Mondays sales, Mondays production is for

Tuesdays sales, and so forth. The bakery is closed Saturday, so Fridays production must satisfydemand for both Saturday and Sunday.

4 WEEKS AGO 3 WEEKS AGO 2 WEEKS AGO LAST WEEK

Monday 2,200 2,400 2,300 2,400

Tuesday 2,000 2,100 2,200 2,200

Wednesday 2,300 2,400 2,300 2,500

Thursday 1,800 1,900 1,800 2,000

Friday 1,900 1,800 2,100 2,000

Saturday

Sunday 2,800 2,700 3,000 2,900

Make a forecast for this week on the following basis:

a. Daily, using a simple four-week moving average.

b. Daily, using a weighted average of 0.40, 0.30, 0.20, and 0.10 for the past four weeks.

c. Sunrise is also planning its purchasesof ingredients for bread production. If bread demandhad

been forecast for last week at 22,000 loaves and only 21,000 loaves were actually demanded,

what would Sunrises forecast be forthis week using exponential smoothingwith= 0.10?

d. Suppose, with the forecast made in c, this weeks demand actually turns out to be 22,500. What

would the new forecast be for the next week?

Solution

a. Simple moving average, four-week.

Monday2,400+ 2,300+ 2,400+ 2,200

4 =

9,300

4 = 2,325 doz.

Tuesday2,200+ 2,200+ 2,100+ 2,000

4 =

8,500

4 = 2,125 doz.

Wednesday2,500+ 2,300+ 2,400+ 2,300

4 =

9,500

4 = 2,375 doz.

Thursday2,000+ 1,800+ 1,900+ 1,800

4 =

7,500

4 = 1,875 doz.

Excel:Forecasting

Solved Problems

Representative example problems are placed at the end of appropriate chapters.Each includes a detailed, worked-out solution and provides another level of supportfor students before they try problems on their own.


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I-x INSTRUCTORSWALKTHROUGH

K e y T e r m s

Inventory The stock of any item or resource used in an

organization.

Independent demand The demands for various items are

unrelated to each other.

Dependent demand The need for any one item is a direct re-

sult of the need for some other item, usually an item of which

it is a part.

Fixedorderquantitymodel (orQ-model) An inventorycon-

trol model where the amount requisitioned is fixed and the

actual ordering is triggered by inventory dropping to a speci-

fied level of inventory.

Fixedtime period model (or P-model) An inventory control

model that specifies inventory is ordered at the end of a

predetermined time period. The interval of time between

orders is fixed and the order quantity varies.

Inventory position The amount on-hand plus on-order

minus backordered quantities. In the case where inventory

has been allocated for special purposes, the inventory posi-

tion is reduced by these allocated amounts.

Safety stock The amount of inventory carried in addition to

the expected demand.

Cycle counting A physical inventory-taking technique in

which inventory is counted on a frequent basis rather than

once or twice a year.

Key Terms

The unique vocabulary of Operations and Supply Managementis highlighted in theKey Terms section at the end of each chapter and includes definitions.

F o r m u l a R e v i e w

Single-period model. Cumulative probability of not selling the last unit. Ratio of marginal cost of un-

derestimating demand and marginal cost of overestimating demand.

[12.1] P Cu

Co + Cu

Q-model. Total annual cost for an order Q, a per-unit cost C, setup cost S, and per-unit holding

costH.

[12.2] TC= DC+D

QS+

Q

2H

Q-model. Optimal (or economic) order quantity.

[12.3] Qopt =

2DS

H

Formula Reviews

These lists at the end of chapters summarize formulas in one spot for easy studentaccess and review.


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Cases

Located at the end of most chapters, thirteen cases allow students to think criticallyabout issues discussed in the chapter. Cases include:

Cell Phone Design, Chapter 2, page 48

Toshiba, Chapter 4, page 103

Altavox Electronics, Chapter 10, page 281

Brunswick Motors, Chapter 13, page 371

C A S E : D e s i g n i n g To s h i b a s N o t e b o o k

C o m p u t e r L i n e

Toshihiro Nakamura, manufacturing engineering sectionmanager, examined the prototype assembly process sheet

(shown in Exhibit 4.7) for the newest subnotebook computer

model. With every new model introduced, management felt

that the assembly line had to increase productivity and lower

costs, usually resulting in changes to the assembly process.

When a new model was designed, considerable attention was

directed toward reducing the number of components and sim-

plifying parts production and assembly requirements. This

new computer was a marvel of high-tech, low-cost innova-

tion and should give Toshiba an advantage during the upcom-

ing fall/winter selling season.

Production of the subnotebook was scheduled to begin in

10 days. Initial production for the new model was to be at

150 units per day, increasing to 250 units per day the follow-

ing week (management thought that eventually production

would reach 300 units per day). Assembly lines at the plant

normally were staffed by 10 operators who worked at a 14.4-meter-long assembly line. The line could accommodate up to

12 operators if there was a need. The line normally operated

for 7.5 hours a day (employees worked from 8:15 A.M. to

5:00 P.M. and regular hours included 1 hour of unpaid lunch

and 15 minutes of scheduled breaks). It is possible to run one,

two, or three hours of overtime, but employees need at least

three days notice for planning purposes.

T h e A s s e m b l y L i n eAt the head of the assembly line, a computer displayed the

daily production schedule, consisting of a list of model types

edul

when they were needed. The material supply system was verytightly coordinated and worked well.

The assembly line consisted of a 14.4-meter conveyor belt

that carried the computers, separated at 1.2-meter intervals by

white stripes on the belt. Workers stood shoulder to shoulder

on one side of the conveyor and worked on the units as they

moved by. In addition to 10 assembly workers, a highly

skilled worker, called a supporter, was assigned to each

line. The supporter moved along the line, assisting workers

who were falling behind and replacing workers who needed

to take a break. Supporters also made decisions about what to

do when problems were encountered during the assembly

process (such as a defective part). The line speed and the

number of workers varied from day to day, depending on

production demand and the workers skills and availability.

Although the assembly line was designed for 10 workers, the

number of workers could vary between 8 and 12.

Exhibit 4.7 provides details of how the engineers who de-signed the new subnotebook computer felt that the new line

should be organized. These engineers design the line assum-

ing that one notebook is assembled every two minutes by

10 line workers. In words, the following is a brief description

of what each operator does:

1 The first operator lays out the major components of a

computer between two white lines on the conveyor.

2 The second operator enters the bar codes on those

components into a centralized computer system by

scanning the bar codes with a hand-held scanning

wand. On a shelf above the conveyor, portable com-

puters dis lay the operations that are performed at

INSTRUCTORSWALKTHROUGH I-x


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Text Web Site

The Online Learning Center

at www.mhhe.com/jacobs1efeatures InteractiveOperations Managementapplets, practice quizzes,Internet links, Excelspreadsheets, PowerPointlecture slides, OMresources, and chapter-by-chapters study aids forstudents.

Student DVD-ROM

The Student DVD-ROMpackaged free with each

new copy of the textincludes practice quizzes,ScreenCam tutorials, Excelspreadsheets, full-lengthvideos, PowerPoint slides,Web links, and additionalresources.

I-xii INSTRUCTORSWALKTHROUGH


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INSTRUCTORSWALKTHROUGH I-xii

S T R U C T U R I N G T H E S E R V I C EE N C O U N T E R : S E R V I C E - S Y S T E MD E S I G N M A T R I XService encounters can be configured in a number of different ways. The service-system

design matrix in Exhibit 5.1 identifies six common alternatives.

The top of the matrix shows the degree of customer/server contact: the buffered core,

which is physically separated from the customer; thepermeable system, which is penetra-

bleby thecustomervia phone or face-to-facecontact;and thereactivesystem, which is both

penetrable and reactive to the customers requirements. The left side of the matrix showswhat we believe to be a logical marketing proposition, namely, that the greater the amount

of contact, the greater the sales opportunity; the right side shows the impact on production

efficiency as the customer exerts more influence on the operation.The entries within the matrix list the ways in which service can be delivered. At one

extreme, service contact is by mail; customers have little interaction with the system. At

the other extreme, customers have it their way through face-to-face contact. The remain-

ing four entries in the exhibit contain varying degrees of interaction.

As one would guess, production efficiency decreases as the customer has more contact

ce e f s

Vol. XI

Service System Design

Matrix

Vol. X

Operations Management

Featuring St. Alexius

Medical Center

Video Icons

These margin icons include the title of a segment in the McGraw-Hill/IrwinOperations Management Video series that enhances the text discussion.

. s le solution.

8 Shoney Video Concepts produces a line o v deodisc players to be linked to personal com-

puters for video games. Videodiscs have much faster access time than tape. With such a

computer/video link, thegamebecomes a very realisticexperience.In a simpledriving game

where the joystick steers the vehicle, for example, rather than seeing computer graphics on

thescreen,the playeris actuallyviewinga segment ofa videodiscshotfroma real movingve-

hicle.Dependingon theactionof theplayer(hittinga guardrail,for example),the disc moves

virtuallyinstantaneously to that segment andthe playerbecomes part of an actualaccident of

real vehicles (staged, of course).

Shoney is tryingto determinea production plan forthe next 12 months. The main criterion

for this plan is that theemployment level is to be held constant over theperiod.Shoney is con-

tinuing in its R&D efforts to develop new applications and prefers not to cause any adverse

feeling with the local workforce. For thesame reason, allemployees shouldput in full work-weeks, even if this is not thelowest-cost alternative. The forecast forthe next 12 monthsis

MONTH FORECAST DEMAND MONTH FORECAST DEMAND

January 600 July 200

February 800 August 200

March 900 September 300

April 600 October 700

May 400 November 800

June 300 December 900

cost is $200 per s een materials a

8. Workforce required=

10(6700 200)/

8(249)= 33.

Total cost= $34,520.

Check Answers

These answers provide instructors with a quick reference in class.


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OMC

The Operations Management Center Supersite at www.mhhe.com/pom offers awealth of edited and organized OM resources including links to Operations

ManagementBusinessWeekarticles, OM Organizations, and virtual tours ofoperations in real companies.

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Instructor CD-ROM

The Instructor Resource CD provides a library of video clips, PowerPoint slides,text figures, and digital versions of the teaching supplements including the Test

Bank (in Word) and the E-Z Test Computerized Testing System, InstructorsSolutions Manual, and Instructors Resource Manual.

INSTRUCTORSWALKTHROUGH I-xv

Documents

Preface Ins Manual