Operations and Supply Chain Management: The Core, Fifth Edition
By F. Robert Jacobs and Richard B. Chase
Contents:
1 OPERATIONS AND SUPPLY CHAIN MANAGEMENT 2
Strategy, Processes, and Analytics 2
What Is Operations and Supply Chain Management? 4
Operations and Supply Chain Processes 6
Differences between Services and Goods 7
The Goods–Services Continuum 8
Product–Service Bundling 9
Efficiency, Effectiveness, and Value 9
How Does Wall Street Evaluate Efficiency? 10
Careers in Operations and Supply Chain Management 14
Chief Operating Officer 16
Historical Development of Operations and Supply Chain Management 16
Current Issues in Operations and Supply Chain Management 19
Concept Connections 19 Discussion
Questions 21 Objective Questions 21
Analytics Exercise: Comparing Companies Using Wall Street Efficiency Measures 23
Practice Exam 23
2 STRATEGY AND SUSTAINABILITY 24
Alphabet (Google) Operations Strategy 24
A Sustainable Operations and Supply Chain Strategy 25
What Is Operations and Supply Chain Strategy? 27
The Notion of Trade-Offs 30
Order Winners and Order Qualifiers: The Marketing– Operations Link 31
Strategies Are Implemented Using Operations and Supply Chain Activities—IKEA’s Strategy 31
Assessing the Risk Associated with Operations and Supply Chain Strategies 33
Risk Management Framework 34
Productivity Measurement 34
Concept Connections 37 Solved Problem 38
Discussion Questions 39 Objective Questions 39
Case: The Tao of Timbuk2 42
Practice Exam 43
3 FORECASTING 44
From Bean to Cup: Starbucks Global Supply Chain Challenge 44
Forecasting in Operations and Supply Chain Management 46
Quantitative Forecasting Models 47
Components of Demand 48
Time Series Analysis 49
Simple Moving Average 50
Weighted Moving Average 52
Exponential Smoothing 53
Exponential Smoothing with Trend 55
Linear Regression Analysis 57
Decomposition of a Time Series 61
Forecast Errors 64
Sources of Error 64
Measurement of Error 65
Causal Relationship Forecasting 68
Multiple Regression Analysis 69
Qualitative Techniques in Forecasting 70
Market Research 70
Panel Consensus 70
Historical Analogy 70
The Delphi Method 71
Web-Based Forecasting: Collaborative Planning,
Forecasting, and Replenishment (CPFR) 71
Concept Connections 73 Solved Problems 75
Discussion Questions 80 Objective Questions 81
Analytics Exercise: Forecasting Supply Chain Demand—Starbucks Corporation 89
Practice Exam 90
4 STRATEGIC CAPACITY MANAGEMENT 92
Tesla—Manufacturing Capacity for the Model 3 93
Capacity Management in Operations and Supply Chain Management 94
Capacity Planning Concepts 95
Economies and Diseconomies of Scale 95
Capacity Focus 96
Capacity Flexibility 96
Capacity Planning 97
Considerations in Changing Capacity 97
Determining Capacity Requirements 99
Using Decision Trees to Evaluate Capacity Alternatives 101
Planning Service Capacity 104
Capacity Planning in Services versus Manufacturing 104
Capacity Utilization and Service Quality 105
Concept Connections 106 Solved Problem 107
Discussion Questions 109 Objective Questions 109
Case: Shouldice Hospital—A Cut Above 111
Practice Exam 113
4A LEARNING CURVES 114
The Learning Curve 114
How Are Learning Curves Modeled? 116
Learning Curve Tables 119
Concept Connections 122 Solved Problems 122
Discussion Questions 123 Objective Questions 124
5 Projects 126
Can a 15-Story Hotel Be Built in Less Than a Week? 126
What Is Project Management? 127
Organizing the Project Team 129
Organizing Project Tasks 131
Managing Projects 132
Earned Value Management (EVM) 134
Network-Planning Models 138
Critical Path Method (CPM) 138
CPM with Three Activity Time Estimates 142
Time–Cost Models and Project Crashing 145
Project Management Information Systems 150
Concept Connections 151 Solved Problems 152
Discussion Questions 157 Objective Questions 157
Analytics Exercise: Product Design Project 164
Practice Exam 165
6 MANUFACTURING PROCESSES 166
Three-Dimensional Printing—The Technology
Could Be Used to Make Parts That Perform Better and Cost Less 166
Production Processes 167
Production Process Mapping and Little’s Law 170
How Production Processes Are Organized 173
Designing a Production System 175
Assembly-Line and Continuous Process Layouts 178
Assembly-Line Design 178
Splitting Tasks 182
Flexible and U-Shaped Line Layouts 182
Concept Connections 183 Solved Problems 185
Discussion Questions 189 Objective Questions 190
Advanced Problem 194
Analytics Exercise: Designing a Manufacturing Process 195
Practice Exam 197
6A BREAK-EVEN ANALYSIS 198
Solved Problems 199 Objective Questions 201
7 SERVICE PROCESSES 202
Amazon—A Retailer That Operates at a Different Level 202
The Nature of Services 203
An Operational Classification of Services 204
Designing Service Organizations 204
Structuring the Service Encounter: Service–System Design Matrix 205
Web Platform Businesses 206
Service Blueprinting and Fail-Safing 208
Economics of the Waiting Line Problem 210
The Practical View of Waiting Lines 210
The Queuing System 212
Waiting Lines and Servers 216
Waiting Line Models 219
Computer Simulation of Waiting Lines 224
Concept Connections 227 Solved Problems 229
Discussion Questions 230 Objective Questions 231
Analytics Exercise: Processing Customer Orders 235
Practice Exam 237
8 SALES AND OPERATIONS PLANNING 238
What Is Sales and Operations Planning? 240
Overview of Sales and Operations Planning Activities 240
The Aggregate Operations Plan 242
Production Planning Environment 243
Relevant Costs 245
Aggregate Planning Techniques 246
A Cut-and-Try Example: The JC Company 246
Yield Management 248
Operating Yield Management Systems 252
Concept Connections 253 Solved Problems 254
Discussion Questions 257 Objective Questions 257
Analytics Exercise: Developing an Aggregate Plan— Bradford Manufacturing 261
Practice Exam 263
9 MATERIAL REQUIREMENTS PLANNING 264
Inside the iPhone X 264
Understanding Material Requirements Planning 266
Where MRP Can Be Used 267
Master Production Scheduling 268
Time Fences 269
Material Requirements Planning System Structure 270
Demand for Products 270
Bill-of-Materials 271
Inventory Records 273
The MRP Computer Program 274
An Example Using MRP 275
Forecasting Demand 275
Developing a Master Production Schedule 276
Bill-of-Materials (Product Structure) 276
Inventory Records 277
Performing the MRP Calculations 277
Lot Sizing in MRP Systems 281
Lot-for-Lot 281
Economic Order Quantity 282
Least Total Cost 283
Least Unit Cost 283
Choosing the Best Lot Size 284
Concept Connections 285 Solved Problems 286
Discussion Questions 291 Objective Questions 292
Analytics Exercise: An MRP Explosion—Brunswick Motors 296
Practice Exam 297
10 QUALITY MANAGEMENT AND SIX SIGMA 298
Disney—An Obsession with Quality and Innovation 298
Total Quality Management 300
Quality Specifications and Quality Costs 301
ISO 9000 and ISO 14000 304
External Benchmarking for Quality Improvement 307
Six Sigma Quality 307
Six Sigma Methodology 308
Analytical Tools for Six Sigma 309
Statistical Quality Control 312
Understanding and Measuring Process Variation 314
Process Capability 315
Statistical Process Control Procedures 321
Process Control with Attribute Measurements: Using p-Charts 321
Process Control with Attribute Measurements: Using c-Charts 324
Process Control with Variable Measurements: Using X ¯ – and R-Charts 325
How to Construct X ¯ – and R-Charts 326
Acceptance Sampling 329
Design of a Single Sampling Plan for Attributes 329
Operating Characteristic Curves 331
Concept Connections 332 Solved Problems 335
Discussion Questions 338 Objective Questions 339
Analytics Exercise: Quality Management—Tesla 345
Practice Exam 346
11 INVENTORY MANAGEMENT 348
Amazon—The Master of Inventory Management 348
Understanding Inventory Management 350
Definition of Inventory 352
Purposes of Inventory 352
Inventory Costs 353
Independent versus Dependent Demand 354
Inventory Systems 355
A Single-Period Inventory Model 355
Multiperiod Inventory Systems 359
Fixed–Order Quantity Models 360
Establishing Safety Stock Levels 363
Fixed–Order Quantity Model with Safety Stock 364
Fixed–Time Period Models 368
Fixed–Time Period Model with Safety Stock 368
Inventory Turn Calculations 370
The Price-Break Model 371
Inventory Planning and Accuracy 373
ABC Classification 374
Inventory Accuracy and Cycle Counting 375
Concept Connections 377 Solved Problems 379
Discussion Questions 383 Objective Questions 383
Analytics Exercise: Inventory Management at Big10Sweaters.com 392
Practice Exam 395
12 LEAN SUPPLY CHAINS 396
Toyota—New Global Architecture 396
Lean Production 397
The Toyota Production System 399
Lean Supply Chains 400
Value Stream Mapping 402
Lean Supply Chain Design Principles 404
Lean Concepts 406
Lean Production Schedules 407
Lean Supply Chains 412
Lean Services 413
Concept Connections 415 Solved Problems 417
Discussion Questions 421 Objective Questions 421
Case: Quality Parts Company 423
Case: Value Stream Mapping 424
Case: Pro Fishing Boats—A Value Stream Mapping Exercise 426
Practice Exam 427
13 GLOBAL SOURCING AND PROCUREMENT 428
Boeing 787 Dreamliner—Assembled in South Carolina from
Components Sourced from around the World 428
Strategic Sourcing 429
The Bullwhip Effect 431
Supply Chain Uncertainty Framework 432
Outsourcing 435
Logistics Outsourcing 436
Framework for Supplier Relationships 436
Green Sourcing 438
Total Cost of Ownership 441
Measuring Sourcing Performance 444
Concept Connections 446 Discussion
Questions 447 Objective Questions 448
Analytics Exercise: Global Sourcing Decisions— Grainger:
Reengineering the China/U.S. Supply Chain 451
Practice Exam 453
14 LOCATION, LOGISTICS, AND DISTRIBUTION 454
FedEx—Speed Is Hidden in Its Logo 454
Logistics 455
Decisions Related to Logistics 456
Transportation Modes 457
Warehouse Design 458
Locating Logistics Facilities 458
Plant Location Methods 460
Locating Service Facilities 466
Concept Connections 469 Solved Problems 470
Discussion Questions 474 Objective Questions 475
Analytics Exercise: Distribution Center Location—Grainger:
Reengineering the China/U.S. Supply Chain 478
Practice Exam 480
Appendices
A Linear Programming Using the Excel Solver 481
B Answers to Selected Objective Questions 504
C Present Value Table 506
D Negative Exponential Distribution: Values of e−X 507
E Areas of the Cumulative Standard Normal Distribution 508
NAME INDEX 509
SUBJECT INDEX 510