Principles of

OPERATIONS
MANAGEMENT
Seventh Edition
Jay Heizer
Jesse H. Jones Professor of Business Administration
Texas Lutheran University
Barry Render
Charles Harwood Professor of Operations Management
Crummer Graduate School of Business
Rollins College
r
PEARSON
Prentice
Hall
Upper Saddle River, New Jersey 07458
About the Authors vi
Foreword xx
Preface xxi
PART i l l 1,
Introduction to Operations
Management 1
Operations and Productivity 1
Global Company Profile: Hard Rock Cafe 2
What Is Operations Management? 4
Organizing to Produce Goods and Services 4
Why Study OM? 4
What Operations Managers Do 7
How This Book Is Organized 7
The Heritage of Operations Management 8
Operations in the Service Sector 9
Differences between Goods and Services 10
Growth of Services 11
Service Pay 12
Exciting New Trends in Operations Management 12
The Productivity Challenge 14
Productivity Measurement 15
Productivity Variables 17
Productivity and the Service Sector 19
Ethics and Social Responsibility 20
Summary 20 Key Terms 21 Solved Problems 21 <
Self-Test 22 Internet and Student CD-ROM/DVD
Exercises 22 Discussion Questions 22 Ethical
Dilemma 23 Problems 23 Case Studies:
National Air Express 24; Zychol Chemicals
Corporation 25 Video Case Study: Hard Rock
Cafe: Operations Management in Services 25
Additional Case Study 26 Bibliography 26
Internet Resources 26
2.| Operations Strategy in a
Global Environment 27
Global Company Profile: Boeing 28
A Global View of Operations 31
Cultural and Ethical Issues 33
Developing Missions and Strategies 34
Mission 34
Strategy 35
Achieving Competitive Advantage
Through Operations 36
Competing on Differentiation 36
Competing on Cost 37
Competing on Response 37
Ten Strategic OM Decisions 39
Issues in Operations Strategy 42
Research 42
Preconditions 43
Dynamics 43
Strategy Development and Implementation 43
Critical Success Factors and Core Competencies 44
Build and Staff the Organization 46
Integrate OM with Other Activities 47
Global Operations Strategy Options 47
International Strategy 47
Multidomestic Strategy 47
Global Strategy 48
Transnational Strategy 49
Summary 49 Key Terms 50 Solved Problem 50
Discussion Questions 50 Self-Test 51 Internet
and Student CD-ROM/DVD Exercises 51 Ethical
Dilemma 51 Problems 52 Case Study: Minit-
Lube 52 Video Case Studies: Strategy at Regal
Marine 53; Hard Rock Cafe's Global Strategy 53
Additional Case Studies 54 Bibliography 54
Internet Resources 54
3. Project Management 55
J
Global Company Profile: Bechtel Group 56
The Importance of Project Management 58
Project Planning 59
The Project Manager 59
Work Breakdown Structure 60
Project Scheduling 61
Project Controlling 62
Project Management Techniques: PERT and CPM 63
The Framework of PERT and CPM 63
Network Diagrams and Approaches 63
Xl i Contents
Activity-on-Node Example 65
Activity-on-Arrow Example 68
Determining the Project Schedule 68
Forward Pass 69
Backward Pass 71
Calculating Slack Time and Identifying
the Critical Path(s) 72
Variability in Activity Times 73
Three Time Estimates in PERT 74
Probability of Project Completion 76
Cost-Time Trade-Offs and Project Crashing 79
A Critique of PERT and CPM 81
Using Microsoft Project to Manage Projects 82
Creating a Project Schedule Using
Microsoft Project 82
Tracking Progress and Managing Costs Using
Microsoft Project 86
Summary 87 Key Terms 87 Using Software to
Solve Project ManagemenfProblems 88 Solved
Problems 88 Active Model Exercise 91 Self-Test
92 Internet and Student CD-ROM/DVD Exercises
93 Discussion Questions 93 Ethical Dilemma 93
Problems 93 Case Study: Southwestern University
(A) 99 Video Case Studies: Project Management at
Arnold Palmer Hospital 100; Managing Hard Rock's
Rockfest 101 'Additional Case Studies 102
Bibliography 102 Internet Resources 102
4.1 Forecasting 103
Global Company Profile: Disney World 104
What Is Forecasting? 106
Forecasting Time Horizons 106
The Influence of Product Life Cycle 107
Types of Forecasts 107
The Strategic Importance of Forecasting 107
Human Resources 107
Capacity 107
Supply Chain Management 107
Seven Steps in the Forecasting System 108
Forecasting Approaches 108
Overview of Qualitative Methods 108
Overview of Quantitative Methods 109
Time-Series Forecasting 109
Decomposition of a Time Series 110
Naive Approach 110
Moving Averages 111
Exponential Smoothing 113
Measuring Forecast Error 115
Exponential Smoothing with Trend Adjustment 118
Trend Projections 121
Seasonal Variations in Data 123
Cyclical Variations in Data 128
Associative Forecasting Methods: Regression
and Correlation Analysis 128
Using Regression Analysis for Forecasting 128
Standard Error of the Estimate 130
Correlation Coefficients for Regression Lines 131
Multiple-Regression Analysis 133
Monitoring and Controlling Forecasts 133
Adaptive Smoothing 135
Focus Forecasting 135
Forecasting in the Service Sector 136
Summary 137 Key Terms 139 Using Software
in Forecasting 139 Solved Problems 140 Active
Model Exercise 142 Self-Test 143 Internet and
Student CD-ROM/DVD Exercises 143 Discussion
Questions 143 Ethical Dilemma 144 Problems
144 Case Studies: Southwestern University: (B)
151; Digital Cell Phone, Inc. 151 Video Case
Study: Forecasting at Hard Rock Cafe 152
Additional Case Studies 153 Bibliography 153
Internet Resources 153
Designing O perations 1 55
@
Design of Goods and Services 155
Global Company Profile: Regal Marine 156
Goods and Services Selection 158
Product Strategy Options Support
Competitive Advantage 158
Product Life Cycles 159
Life Cycle and Strategy 159
Product-by-Value Analysis 160
Generating New Products 160
New Product Opportunities 160
Importance of New Products 161
Product Development 162
Product Development System 162
Quality Function Deployment (QFD) 162
Organizing for Product Development 165
Manufacturability and Value Engineering 166
Issues for Product Design 167
Robust Design 167
Modular Design 167
Computer-Aided Design (CAD) 167
Computer-Aided Manufacturing (CAM) 168
Virtual Reality Technology 169
J
Contents xi i i
Value Analysis 169
Ethics and Environmentally Friendly
Designs 169
Time-Based Competition 172
Purchasing Technology by Acquiring a Firm 174
Joint Ventures 174
Alliances 174
Defining a Product 174
Make-or-Buy Decisions 176
Group Technology 176
Documents for Production 176
Product Life-Cycle Management (PLM) 178
Service Design 178
Documents for Services 180
Application of Decision Trees to Product Design 182
Transition to Production 183
Summary 184 Key Terms 184 * Solved Problem
184 * Self-Test 185 Active Model Exercise 186
Internet and Student CD-ROM/DVD Exercises 186
Discussion Questions 187 Ethical Dilemma 187 *
Problems 187 * Case Study: De Mar's Product
Strategy 189* Video Case Study: Product Design
at Regal Marine 189 * Additional Case Studies 190*
Bibliography 190 * Internet Resources 190
6.) Managing Quality 191
Global Company Profile: Arnold Palmer Hospital 192
Quality and Strategy 194
Defining Quality 194
Implications of Quality 195
Malcolm Baldrige National Quality Award 195
Cost of Quality (COQ) 196
Ethics and Quality Management 196
International Quality Standards 198
ISO 9000198
ISO 14000198
Total Quality Management 198
Continuous Improvement 198
Six Sigma 199
Employee Empowerment 200
Benchmarking 201
Just-in-Time (JIT) 202
Taguchi Concepts 203
Knowledge of TQM Tools 204
Tools of TQM 204
Check Sheets 204
Scatter Diagrams 205
Cause-and-Effect Diagrams 205
Pareto Charts 206
Flowcharts 207
Histograms 208
Statistical Process Control (SPC) 208
The Role of Inspection 208
When and Where to Inspect 208
Source Inspection 209
Service Industry Inspection 210
Inspection of Attributes versus Variables 210
TQM in Services 210
Summary 213 Key Terms 213 * Active Model
Exercise 213 * Self-Test 214 Internet and Student
CD-ROM/DVD Exercises 214 * Discussion
Questions 214 * Ethical Dilemma 215 * Problems
215 * Case Study: Southwestern University (C)
217* Video Case Studies: The Culture of Quality
at Arnold Palmer Hospital 218; Quality at the
Ritz-Carlton Hotel Company 218 * Additional
Case Studies 219 Bibliography 219 * Internet
Resources 219
S t a t i s t i c a l Process Control 221
Statistical Process Control (SPC) 222
Control Charts for Variables 224
The Central Limit Theorem 224
Setting Mean Chart Limits (x-Charts) 225
Setting Range Chart Limits (R-Charts) 228
Using Mean and Range Charts 229
Control Charts for Attributes 230
Managerial Issues and Control Charts 233
Process Capability 235
Process Capability Ratio (C
p
) 235
Process Capability Index (C
k
) 236
Acceptance Sampling 237
Operating Characteristic Curve 238
Average Outgoing Quality 239
Summary 240 * Key Terms 240 * Using Software
for SPC 240 * Solved Problems 241 * Active Model
Exercise 242 * Self-Test 243 * Internet and Student
CD-ROM/DVD Exercises 244 Discussion
Questions 244 Problems 244 * Case Studies:
Bayfield Mud Company 248; Alabama Airlines'
On-Time Schedule 249 * Video Case Study: Farm
to Fork: Quality at Darden Restaurants 250 *
Additional Case Studies 251 * Bibliography 251 *
Internet Resources 251
7.1 Process Strategy 253
Global Company Profile: Dell Computer Corp. 254
Four Process Strategies 256
Process Focus 256
Repetitive Focus 258
Product Focus 259
XIV Contents
Mass Customization Focus 260
Comparison of Process Choices 263
Process Analysis and Design 266
Flow Diagrams 266
Time-Function Mapping 266
Value-Stream Mapping 267
Process Charts 268
Service Blueprinting 269
Service Process Design 270
Customer Interaction and Process Design 270
More Opportunities to Improve Service
Processes 271
Selection of Equipment and Technology 271
Production Technology 272
Machine Technology 272
Automatic Identification System (AISs) and RFID 273
Process Control 273
Vision Systems 274
Robots 274
Automated Storage and Retrieval System (ASRSs) 274
Automated Guided Vehicles (AGVs) 275
Flexible Manufacturing Systems (FMSs) 275
Computer-Integrated Manufacturing (CIM) 275
Technology in Services 275
Process Redesign 277
Ethics and Environmentally Friendly Processes 279
Summary 279 * Key Terms 280 * Solved Problem
280 * Active Model Exercise 280 * Self-Test 281
Internet and Student CD-ROM/DVD Exercises
281 * Discussion Questions 281 Ethical
Dilemma 282 * Problems 282 * Case Study:
Rochester Manufacturing Corporation 283
Video Case Studies: Process Analysis at Arnold
Palmer Hospital 283; Process Strategy at Wheeled
Coach 284 * Additional Case Studies 285 *
Bibliography 285 * Internet Resources 285
Supplement 7: Capacity Planning 287
Capacity 288
Design and Effective Capacity 289
Capacity and Strategy 290
Capacity Considerations 290
Managing Demand 291
Demand and Capacity Management
in the Service Sector 293
Capacity Planning 295
Break-Even Analysis 296
Single-Product Case 298
Multiproduct Case 298
Applying Decision Trees to Capacity Decisions 300
Applying Investment Analysis to Strategy-Driven
Investments 301
Investment, Variable Cost, and Cash Flow 302
Net Present Value 302
Summary 305 Key Terms 305 * Using Software
for Break-Even Analysis 305 Solved Problems
306 * Self-Test 308 * Internet and Student CD-ROM/
DVD Exercises 308 * Discussion Questions 308 *
Problems 309 Video Case Study: Capacity
Planning at Arnold Palmer Hospital 312
Additional Case Studies 312 * Bibliography 313 *
Internet Resources 313
FI D Location Strategies 315
LJLJ
Global Company Profile: FedEx 316
The Strategic Importance of Location 318
Factors That Affect Location Decisions 319
Labor Productivity 320
Exchange Rates and Currency Risk 320
Costs 321
Political Risk, Values, and Culture 322
Proximity to Markets 322
Proximity to Suppliers 322
Proximity to Competitors (Clustering) 322
Methods of Evaluating Location Alternatives 323
The Factor-Rating Method 323
Locational Break-Even Analysis 324
Center-of-Gravity Method 326
Transportation Model 328
Service Location Strategy 328
How Hotel Chains Select Sites 329
The Call Center Industry 330
Geographic Information Systems 331
Summary 332 * Key Terms 332 * Using Software
to Solve Location Problems 333 * Solved
Problems 333 * Self-Test 335 * Active Model
Exercise 335 Internet and Student CD-ROM/
DVD Exercises 336 * Discussion Questions 336
Ethical Dilemma 336 * Problems 337 Case
Study: Southern Recreational Vehicle Company
341 * Video Case Studies: Locating the Next Red
Lobster Restaurant 342; Where to Place the Hard
Rock Cafe 343 Additional Case Studies 343 *
Bibliography 344 * Internet Resources 344
9. | Layout Strategies 345
Global Company Profile: McDonald's 346
The Strategic Importance of Layout Decisions 348
Types of Layout 348
Office Layout 350
Contents XV
Retail Layout 351
Servicescapes 352
Warehousing and Storage Layouts 353
Cross-Docking 354
Random Stocking 354
Customizing 354
Fixed-Position Layout 355
Process-Oriented Layout 356
Computer Software for Process-Oriented
Layouts 360
Work Cells 360
Requirements of Work Cells 361
Staffing and Balancing Work Cells 361
The Focused Work Center and the Focused
Factory 364
Repetitive and Product-Oriented Layout 364
Assembly-Line Balancing 366
Summary 370 * Key Terms 371 Using Software to
Solve Layout Problems 371 Solved Problems 372 *
Self-Test 375 * Active Model Exercise 375 Internet
and Student CD-ROM/DVD Exercises 376
Discussion Questions 376 * Ethical Dilemma 377 *
Problems 377* Case Study: State Automobile
License Renewals 382 * Video Case Studies: Laying
Out Arnold Palmer Hospital's New Facility 383;
Facility Layout at Wheeled Coach 384 * Additional
Case Studies 384 Bibliography 385 * Internet
Resources 385
Summary 404 * Key Terms 404 Solved Problem
404 * Self-Test 405 Internet and Student CD-ROM/
DVD Exercises 405 * Discussion Questions 405 *
Ethical Dilemma 406 Problems 406 Case Study:
The Fleet That Wanders 407 Video Case Study:
Hard Rock's Human Resource Strategy 407
Additional Case Studies 408 Bibliography 408 *
Internet Resources 409
Supplement 10: Work Measurement 411
10.J Human Resources and Job Design 387
Global Company Profile: Rusty Wallace's
NASCAR Racing Team 388
Human Resource Strategy for Competitive"
Advantage 390
Constraints on Human Resource Strategy 390
Labor Planning 391
Employment-Stability Policies 391
Work Schedules 391
Job Classifications and Work Rules 392
Job Design 392
Labor Specialization 392
Job Expansion 393
Psychological Components of Job Design 394
Self-Directed Teams 394
Motivation and Incentive Systems 395
Ergonomics and the Work Environment 397
Methods Analysis 399
The Visual Workplace 402
Ethics and the Work Environment 403
Labor Standards 403
Labor Standards and Work Measurement 412
Historical Experience 413
Time Studies 413
Predetermined Time Standards 418
Work Sampling 420
Summary 423 * Key Terms 423 * Solved Problems
423 * Active Model Exercise 425 * Self-Test 425
Internet and Student CD-ROM/DVD Exercises 426
Discussion Questions 426 Problems 426 * Case
Study: Jackson Manufacturing Company 429
Additional Case Studies 430 Bibliography 430 *
Internet Resources 430
Managing Operations 431
[ il l ] Supply Chain Management 431
Global Company Profile: Darden Restaurants 432
The Supply Chain's Strategic Importance 434
Global Supply Chain Issues 435
Supply Chain Economics 436
Make-or-Buy Decisions 437
Outsourcing 438
Ethics in the Supply Chain 438
Supply Chain Strategies 438
Many Suppliers 439
Few Suppliers 439
Vertical Integration 439
Keiretsu Networks 440
Virtual Companies 440
Managing the Supply Chain 441
Issues in an Integrated Supply Chain 441
Opportunities in an Integrated Supply Chain 442
E-Procurement 445
Online Catalogs 445
Auctions 446
RFQs 446
Real-Time Inventory Tracking 446
XVI
Contents
Vendor Selection 447
Vendor Evaluation 447
Vendor Development 448
Negotiations 448
Logistics Management 448
Distribution Systems 449
Third-Party Logistics 450
Cost of Shipping Alternatives 451
Logistics, Security, and JIT 452
Measuring Supply Chain Performance 452
Summary 455 * Key Terms 455 Solved Problem
455 * Self-Test 456 * Internet and Student CD-ROM/
DVD Exercises 456 Discussion Questions 456 *
Ethical Dilemma 457 * Problems 457 * Case Study:
Dell's Value Chain 458 * Video Case Studies:
Darden's Global Supply Chains; Arnold Palmer
Hospital's Supply Chain; Supply Chain
Management at Regal Marine 459 Additional
Case Studies 461 Bibliography 461 * Internet
Resources 461
Supplement 1 1 : Outsourcing as a Supply
Chain Strategy 463
What Is Outsourcing? 464
Types of Outsourcing 465
Strategic Planning and Core Competencies 466
The Theory of Comparative Advantage 467
Outsourcing Trends and Political Repercussions 467
Risks in Outsourcing 468
Methodologies for Outsourcing 470
Evaluating Multiple Criteria with Factor Rating 470
Break-even Analysis 472
Advantages and Disadvantages of Outsourcing 473
Advantages of Outsourcing 473
Disadvantages of Outsourcing 474
Audits and Metrics to Evaluate Outsourcing
Performance 475
Ethical Issues in Outsourcing 475
Summary 476 * Key Terms 476 Using Software to
Solve Outsourcing Problems 476* Solved Problem
476 Self-Test 477 * Internet and Student CD-ROM/
DVD Exercises 477 Discussion Questions 477 *
Problems 478 Case Study: Outsourcing to Tata
479 * Video Case Study: Outsourcing Offshore
at Darden 479 * Bibliography 480 Internet
Resources 480
[12.J Inventory Management 481
Global Company Profile: Amazon.com 482
Functions of Inventory 484
Types of Inventory 484
Inventory Management 485
ABC Analysis 485
Record Accuracy 486
Cycle Counting 487
Control of Service Inventories 488
Inventory Models 489
Independent vs. Dependent Demand 489
Holding, Ordering, and Setup Costs 490
Inventory Models for Independent Demand 490
The Basic Economic Order Quantity (EOQ)
Model 490
Minimizing Costs 491
Reorder Points 495
Production Order Quantity Model 497
Quantity Discount Models 500
Probabilistic Models and Safety Stock 502
Other Probabilistic Models 505
Fixed-Period (P) Systems 507
Summary 509 * Key Terms 510 * Using Software
to Solve Inventory Problems 510 * Solved
Problems 511 * Self-Test 515 * Active Model
Exercise 515 Internet and Student CD-ROM/DVD
Exercises 516 Discussion Questions 516
Ethical Dilemma 516 Problems 517 * Case
Studies: Zhou Bicycle Company; Sturdivant
Sound Systems 521 * Video Case Study:
Inventory Control at Wheeled Coach 522
Additional Case Studies 522 * Bibliography 523 *
Internet Resources 523
1 3. Aggregate Planning 525
Global Company Profile: Anheuser-Busch 526
The Planning Process 528
The Nature of Aggregate Planning 528
Aggregate Planning Strategies 530
Capacity Options 531
Demand Options 532
Mixing Options to Develop a Plan 532
Methods for Aggregate Planning 533
Graphical Methods 534
Mathematical Approaches 538
Comparison of Aggregate Planning Methods 540
Aggregate Planning in Services 541
Restaurants 542
Hospitals 542
National Chains of Small Service Firms 542
Miscellaneous Services 542
Airline Industry 543
Yield Management 543
Contents xvii
Summary 546 Key Terms 547 * Using Software
for Aggregate Planning 547 Solved Problems
548 Self-Test 550 * Active Model Exercise 550
Internet and Student CD-ROM/DVD Exercises
551 Discussion Questions 551 * Ethical
Dilemma 552 * Problems 552 * Case Studies:
Southwestern University: (G); Andrew-Carter,
Inc. 556 Additional Case Studies 558 *
Bibliography 558 * Internet Resources 558
14.J Material Requirements Planning (MRP)
andERP 559
Global Company Profile: Wheeled Coach 560
Dependent Demand 562
Dependent Inventory Model Requirements 562
Master Production Schedule 562
Bills of Material 565
Accurate Inventory Records 567
Purchase Orders Outstanding 567
Lead Times for Components 567
MRP Structure 568
MRP Management 572
MRP Dynamics 572
MRP and JIT 572
Lot-Sizing Techniques 574
Extensions of MRP 578
Material Requirements Planning II (MRP II) 578
Closed-Loop MRP 579
Capacity Planning 579
MRP in Services 580
Distribution Resource Planning (DRP) 581
Enterprise Resource Planning (ERP) 582
Advantages and Disadvantages of ERP Systems 585
ERP in the Service Sector 585
Summary 586 * Key Terms 586 * Using Software to
Solve MRP Problems 586 * Solved Problems 587 *
Self-Test 590 * Active Model Exercise 590 * Internet
and Student CD-ROM/DVD Exercises 591 *
Discussion Questions 591 Ethical Dilemma 592
Problems 592 Case Study: Ikon's Attempt at
ERP 595 * Video Case Study: MRP at Wheeled
Coach 596 Additional Case Studies 597 *
Bibliography 597 * Internet Resources 597
15. Short-Term Scheduling 599
Global Company Profile: Delta Air Lines 600
The Strategic Importance of Short-Term Scheduling 602
Scheduling Issues 602
Forward and Backward Scheduling 603
Scheduling Criteria 605
Scheduling Process-Focused Facilities 605
Loading Jobs 606
Input-Output Control 606
Gantt Charts 607
Assignment Method 609
Sequencing Jobs 612
Priority Rules for Dispatching Jobs 612
Critical Ratio 615
Sequencing N Jobs on Two Machines:
Johnson's Rule 616
Limitations of Rule-Based Dispatching Systems 618
Finite Capacity Scheduling (FCS) 618
Theory of Constraints 619
Bottlenecks 620
Drum, Buffer, Rope 620
Scheduling Repetitive Facilities 621
Scheduling Services 621
Scheduling Service Employees with Cyclical
Scheduling 623
L
Summary 625 * Key Terms 625 * Using Software for
Short-Term Scheduling 625 Solved Problems 627 *
Active Model Exercise 630 * Self-Test 631 Internet
and Student CD-ROM/DVD Exercises 631
Discussion Questions 631 * Ethical Dilemma 632 *
Problems 632 * Case Study: Old Oregon Wood
Store 635 Video Case Study: Scheduling at Hard
Rock Cafe 636 * Additional Case Studies 637 *
Bibliography 637 Internet Resources 637
JIT and Lean Operations 639
Global Company Profile: Toyota Motor Corporation 640
Just-in-Time, the Toyota Production System,
and Lean Operations 642
Eliminate Waste 642
Remove Variability 643
Improve Throughout 644
Just-in-Time (JIT) 644
JIT Partnerships 645
Concerns of Suppliers 646
JIT Layout 647
Distance Reduction 647
Increased Flexibility 647
Impact on Employees 647
Reduced Space and Inventory 647
JIT Inventory 648
Reduce Variability 648
Reduce Inventory 649
Reduce Lot Sizes 649
Reduce Setup Costs 650
JIT Scheduling 651
Level Schedules 652
Kanban 652
xviii Contents
JIT Quality 655
Toyota Production System 656
Continuous Improvement 656
Respect for People 656
Standard Work Practice 656
Lean Operations 657
Building a Lean Organization 657
Lean Operations in Services 658
Summary 659 * Key Terms 659 * Solved Problem
659 Self-Test 660 Internet and Student CD-ROM/
DVD Exercises 660 * Discussion Questions 660 *
Ethical Dilemma 661 Problems 661 * Case
Studies: Mutual Insurance Company of Iowa; JIT
After the Fire 662 Video Case Study: JIT at Arnold
Palmer Hospital 664 * Additional Case Studies 664 *
Bibliography 665 Internet Resources 665
1 7. Maintenance and Reliability 667
Global Company Profile: Orlando Utilities
Commission 668
The Strategic Importance of Maintenance
and Reliability 670
Reliability 671
Improving Individual Components 671
Providing Redundancy 673
Maintenance 674
Implementing Preventive Maintenance 674
Increasing Repair Capabilities 678
Total Productive Maintenance 679
Techniques for Enhancing Maintenance 679
Summary 679 Key Terms 680 * Using Software to
Solve Reliability Problems 680 Solved Problems
680 * Internet and Student CD-ROM/DVD Exercises
680 * Self-Test 681 * Discussion Questions 681
Ethical Dilemma 681 * Problems 682 * Case Study:
Worldwide Chemical Company 683 * Additional
Case Studies 684 * Bibliography 684 * Internet
Resources 684
Appendices A l
Indices I I
Photo Credits Cl
Continuous Probability Distributions Tl-4
The Normal Distribution Tl-4
Summary Tl-7* Key Terms Tl-7* Discussion
Questions Tl-7* Problems Tl-7* Bibliography Tl-8
2. Acceptance Sampling T 2-1
Sampling Plans T2-2
Single Sampling T2-2
Double Sampling T2-2
Sequential Sampling T2-2
Operating Characteristic (OC) Curves T2-2
Producer's and Consumer's Risk T2-3
Average Outgoing Quality T2-5
Summary T2-6 * Key Terms T2-6 * Solved Problem
T2-7 Discussion Questions T2-7 * Problems T2-7
3. The Simplex Method of Linear
Programming T 3-1
Converting the Constraints to Equations T3-2
Setting Up the First Simplex Tableau T3-2
Simplex Solution Procedures T3-4
L
Summary of Simplex Steps for Maximization
Problems T3-6
Artificial and Surplus Variables T3-7
Solving Minimization Problems T3-7
Summary T3-8 Key Terms T3-8 Solved Problem
T3-8 Discussion Questions T3-8 Problems T3-9
4. The MODI and VAM Methods of Solving
Transportation Problems T 4-1
MODI Method T4-2
How to Use the MODI Method T4-2
Solving the Arizona Plumbing Problem
with MODI T4-2
Vogel's Approximation Method: Another Way
to Find an Initial Solution T4-4
Discussion Questions T4-8 Problems T4-8
CD-ROM T utorials
1 . Statistical Tools for Managers T l - 1
Discrete Probability Distributions Tl-2
Expected Value of a Discrete Probability
Distribution Tl-3
Variance of a Discrete Probability Distribution Tl-3
5. Vehicle Routing and Scheduling T 5-1
Introduction T5-2
Service Delivery Example: Meals-for-ME T5-2
Objectives of Routing and Scheduling Problems T5-2
Characteristics of Routing and Scheduling
Problems T5-3
Classifying Routing and Scheduling Problems T5-3
Solving Routing and Scheduling Problems T5-4
Contents xi x
Routing Service Vehicles T5-5
The Traveling Salesman Problem T5-5
Multiple Traveling Salesman Problem T5-8
The Vehicle Routing Problem T5-9
Cluster First, Route Second Approach T5-10
Scheduling Service Vehicles T5-11
The Concurrent Scheduler Approach T5-13
Other Routing and Scheduling Problems T5-13
Summary T5-14 Key Terms T5-15 * Discussion
Questions T5-15 * Problems T5-15 * Case Study:
Routing and Scheduling of Phlebotomists T5-17 *
Bibliography T5-17