1 Creative Operations Management Problem Solving: A Decision-Making Approach 1 1.1 Managerial Decision Making 1 1.2 The Intelligence Phase of the Decision-Making Process 4 1.3 The Design Phase of the Decision-Making Process 10 1.4 The Choice Phase of the Decision-Making Process 14 1.5 An Example: Jackets versus Scrap at the UNEEDA Corporation 16 1.6 Concluding Comments 25 EXERCISES 25 2 Forecasting 27 2.1 Forecasting at the LastEver Corporation 28 2.2 Patterns of Data 33 2.3 Forecasting Approaches 42 2.4 Time Series Analysis 44 2.5 Concluding Comments 56 EXERCISES 56 3 Advanced Forecasting 59 3.1 Extrapolation from the Past 59 3.2 Regression Analysis 63 3.3 Cyclical and Seasonal Issues 71 3.4 Concluding Comments 81 EXERCISES 81 4 Planning Models 85 4.1 The Basic Planning Problem 85 4.2 The Basic Pricing Problem 87 4.3 Nonlinear Cost and Demand Functions 91 4.4 Preparing a Five-Year Plan 96 4.5 The Impact of Pricing 97 4.6 Concluding Comments 99 EXERCISES 100 5 Aggregate Planning and Learning Curves 103 5.1 The Nature of Aggregate Planning 103 5.2 Tradeoffs between Production and Inventory 103 5.3 Learning Curves 110 5.4 Concluding Comments 112 EXERCISES 113 6 Inventory 117 6.1 Why Hold Inventory 117 6.2 The Cost of Inventory 118 6.3 Cyclic Inventory Control 119 6.4 The Economic Order Quantity Model 123 6.5 What-If Scenarios 126 6.6 EOQ Model with Price Breaks 130 6.7 Economic Production Lot Size Model 132 6.8 Singlc-Period Models with Probabilistic Demand 136 6.9 Multi-Period Models with Probabilistic Demand 144 6.10 Concluding Comments 149 EXERCISES 150 7 Material Requirements Planning 153 7.1 Where MRP Fits In 153 7.2 Master Production Schedule 155 7.3 Bill of Materials 158 7.4 A Simple MRP Example 162 7.5 Rolling the MRP Schedule 163 7.6 Adding Allocated Inventory and Safety Stock 165 7.7 A More Complex MRP Example 166 7.8 Dealing with Multiple Products 168 7.9 Problems at Central Products Incorporated 171 7.10 Concluding Comments 176 EXERCISES 177 8 Quality: Monitoring Processes Using Charts 181 8.1 Monitoring Processes by Charts: Looking at the Data 181 8.2 Mean Charts 183 8.3 The Run Chart 186 8.4 The R Range Chart 186 8.5 Standard Deviation Charts 189 8.6 Using These Charts 189 8.7 Control Charts for Attribute Data 191 8.8 Other Quality Control Charts 194 8.9 Concluding Comments 197 EXERCISES 197 9 Machine Replacement and Maintenance 199 9.1 Machine Replacement Decisions 199 9.2 Machine Maintenance Decisions 206 9.3 Group Maintenance Decisions 211 9.4 Concluding Comments 214 EXERCISES 214 10 Project Management 217 10.1 The Project 217 I0.2 The Professor 219 10.3 Network Diagrams 219 10.4 Probabilities 224 10.5 Crunching 229 10.6 Concluding Comments 234 EXERCISES 235 11 Facility Location Decisions 237 11.1 Factor Weighting 237 11.2 Center-of-Gravity Method 240 11.3 Cost-Volume Analysis 242 11.4 Concluding Comments 244 EXERCISES 245 12 Risk Analysis and Simulation 247 12.1 Problems Where Uncertainty Is Important 247 12.2 Working the Cough Drop Problem 252 12.3 Generating Random Numbers 259 12.4 Break-Even Analysis under Uncertainty: A Case Study 269 12.5 The Farmer''s Problem: Dependent Random Variables 274 12.6 Concluding Comments 277 EXERCISES 277 13 Simulating Operations Management Processes 279 I3.1 The Network-Flow Production Process 280 13.2 The Matchstick Shuffling System 280 13.3 The Copy Machine Problem 288 13.4 Why Projects Are Late 297 13.5 The Single Station System 300 13.6 Concluding Comments 304 EXERCISES 304 14 Resource Allocation: Applied Constraint Management 307 14.1 Making Mathematical Programming Relevant for Operations Management 307 14.2 A Production Planning Support System 308 14.3 A Transportation Problem 317 14.4 Concluding Comments 321 EXERCISES 321 AppendixA Using Excel 323 Appendix B The Models 355 For Further Reading 367 Index 368
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