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YOU CAN CUSTOMIZE YOUR TEXTBOOK WITH CHAPTERS FROM ANY OF THE FOLLOWING PRENTICE HALL TITLES: *

BUSINESS STATISTICS

� Berenson/Levine/Krehbiel, BASIC BUSINESS STATISTICS, 10/e � Groebner/Shannon/Fry/Smith, BUSINESS STATISTICS: A DECISION-

MAKING APPROACH, 6/e � Levine/Stephan/Krehbiel/Berenson, STATISTICS FOR MANAGERS USING MICROSOFT EXCEL, 4/e � Levine/Krehbiel/Berenson, BUSINESS STATISTICS: A FIRST COURSE, 4/e� Newbold/Carlson/Thorne, STATISTICS FOR BUSINESS AND ECONOMICS, 5/e � Groebner/Shannon/Fry/Smith, A COURSE IN BUSINESS STATISTICS, 4/e

OPERATIONS MANAGEMENT

� Anupindi/Chopra/Deshmukh/Van Mieghem/Zemel, MANAGING BUSINESS PROCESS FLOWS, 2/e� Bozarth/Handfield, INTRODUCTION TO OPERATIONS

AND SUPPLY CHAIN MANAGEMENT � Chopra/Meindl, SUPPLY CHAIN MANAGEMENT, 2e� Foster, MANAGING QUALITY, 2/e� Handfield/Nichols, Jr., SUPPLY CHAIN MANAGEMENT� Heineke/Meile, GAMES AND EXERCISES FOR OPERATIONS MANAGEMENT� Heizer/Render, OPERATIONS MANAGEMENT, 8/e � Heizer/Render, PRINCIPLES OF OPERATIONS MANAGEMENT, 6/e� Krajewski/Ritzman, OPERATIONS MANAGEMENT, 7/e� Latona/Nathan, CASES AND READINGS IN PRODUCTION

AND OPERATIONS MANAGEMENT� Ritzman/Krajewski, FOUNDATIONS OF OPERATIONS MANAGEMENT� Schmenner, PLANT AND SERVICE TOURS IN OPERATIONS MANAGEMENT, 5/e

MANAGEMENT SCIENCE/SPREADSHEET MODELING

� Eppen/Gould/Schmidt/Moore/Weatherford, INTRODUCTORY MANAGEMENT SCIENCE, 5/e

� Render/Stair/Hanna, QUANTITATIVE ANALYSIS FOR MANAGEMENT, 9/e� Render/Stair/Balakrishnan, MANAGERIAL DECISION MODELING

WITH SPREADSHEETS� Render/Greenberg/Stair, CASES AND READINGS IN MANAGEMENT

SCIENCE, 2e� Taylor, INTRODUCTION TO MANAGEMENT SCIENCE, 8/e

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HEIZMF01_013185755X.QXD 5/16/05 12:46 PM Page ii

OPERATIONSMANAGEMENTE igh th Ed i t ion

Jay HeizerJesse H. Jones Professor of Business AdministrationTexas Lutheran University

Barry RenderCharles Harwood Professor of Operations ManagementCrummer Graduate School of BusinessRollins College

Upper Saddle River, New Jersey 07458

HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page iii

Library of Congress Cataloging-in-Publication DataHeizer, Jay H.

Operations management / Jay Heizer, Barry Render.—8th ed.p. cm.

ISBN 0-13-185755-X1. Production management. I. Render, Barry. II. Title.TS155.H3726 2006658.5—dc22

2005045918

AVP/Executive Editor: Mark PfaltzgraffVP/Editorial Director: Jeff ShelstadSenior Sponsoring Editor: Alana BradleySenior Editorial Assistant: Jane AveryMedia Product Development Manager: Nancy WelcherAVP/Executive Marketing Manager: Debbie ClareMarketing Assistant: Joanna SabellaSenior Managing Editor (Production): Cynthia ReganPermissions Coordinator: Charles MorrisProduction Manager: Arnold VilaDesign Director: Maria LangeArt Director: Janet SlowikInterior Design: Blair Brown/Judy AllanCover Design: Karen QuigleyCover Photo: Jonathan Bailey Associates/Courtesy of Arnold Palmer HospitalDirector, Image Resource Center: Melinda ReoManager, Rights and Permissions: Zina ArabiaManager: Visual Research: Beth BrenzelManager, Cover Visual Research & Permissions: Karen SanatarImage Permission Coordinator: Carolyn GaunttPhoto Researcher: Rachel LucasManager, Print Production: Christy MahonComposition/Illustration: GGS Book Services, Atlantic HighlandsFull-Service Project Management: GGS Book Services, Atlantic HighlandsSupplements Coordinator: Karen MislerPrinter/Binder: Courier-KendallvilleTypeface: 10/12 Times

Credits and acknowledgments borrowed from other sources and reproduced, with permission,in this textbook appear on appropriate page within text and on page C1.

Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in theU.S.A. and other countries. Screen shots and icons reprinted with permission from theMicrosoft Corporation. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation.

Copyright © 2006, 2004, 2001, 1999, 1996 by Pearson Education, Inc., Upper SaddleRiver, New Jersey, 07458.Pearson Prentice Hall. All rights reserved. Printed in the United States of America. Thispublication is protected by Copyright and permission should be obtained from the publisherprior to any prohibited reproduction, storage in a retrieval system, or transmission in anyform or by any means, electronic, mechanical, photocopying, recording, or likewise. Forinformation regarding permission(s), write to: Rights and Permissions Department.

Pearson Prentice Hall™ is a trademark of Pearson Education, Inc.Pearson® is a registered trademark of Pearson plcPrentice Hall® is a registered trademark of Pearson Education, Inc.

Pearson Education LTD. Pearson Education Australia PTY, LimitedPearson Education Singapore, Pte. Ltd Pearson Education North Asia LtdPearson Education, Canada, Ltd Pearson Educación de Mexico, S.A. de C.V.Pearson Education–Japan Pearson Education Malaysia, Pte. Ltd

10 9 8 7 5 4 3 2 1ISBN 0-13-185755-X

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To Donna, Kira, and Janée, in honor of the women you have become.

—JH

To my family—BR

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A B O U T T H E AU T H O R S

Jay Heizer holds the Jesse H. Jones Chair of Business Administration at Texas LutheranUniversity in Seguin, Texas. He received his B.B.A. and M.B.A. from the University of North Texasand his Ph.D. in Management and Statistics from Arizona State University (1969). He was previ-ously a member of the faculty at the University of Memphis, the University of Oklahoma, VirginiaCommonwealth University, and the University of Richmond. He has also held visiting positions atBoston University, George Mason University, the Czech Management Center, and the Otto-Von-Guericka University Magdeburg.

Dr. Heizer’s industrial experience is extensive. He learned the practical side of operations manage-ment as a machinist apprentice at Foringer and Company, production planner for WestinghouseAirbrake, and at General Dynamics, where he worked in engineering administration. Additionally,he has been actively involved in consulting in the OM and MIS areas for a variety of organizationsincluding Philip Morris, Firestone, Dixie Container Corporation, Columbia Industries, andTenneco. He holds the CPIM certification from APICS—the Association for OperationsManagement.

Professor Heizer has co-authored five books and has published over thirty articles on a variety ofmanagement topics. His papers have appeared in the Academy of Management Journal, Journal ofPurchasing, Personnel Psychology, Production & Inventory Control Management, APICS-ThePerformance Advantage, Journal of Management History, IIE Solutions and EngineeringManagement, among others. He has taught operations management courses in undergraduate, grad-uate, and executive programs.

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Barry Render holds the Charles Harwood Endowed Professorship in OperationsManagement at the Crummer Graduate School of Business at Rollins College, in Winter Park,Florida. He received his B.S. in Mathematics and Physics at Roosevelt University, and his M.S. inOperations Research and Ph.D. in Quantitative Analysis at the University of Cincinnati. He previ-ously taught at George Washington University, University of New Orleans, Boston University, andGeorge Mason University, where he held the GM Foundation Professorship in Decision Sciencesand was Chair of the Decision Science Department. Dr. Render has also worked in the aerospaceindustry for General Electric, McDonnell Douglas, and NASA.

Professor Render has co-authored ten textbooks with Prentice Hall, including Managerial DecisionModeling with Spreadsheets, Quantitative Analysis for Management, Service Management,Introduction to Management Science, and Cases and Readings in Management Science.Quantitative Analysis for Management is now in its 9th edition and is a leading text in that disciplinein the U.S. and globally. His more than one hundred articles on a variety of management topics haveappeared in Decision Sciences, Production and Operations Management, Interfaces, Informationand Management, Journal of Management Information Systems, Socio-Economic PlanningSciences, IIE Solutions, and Operations Management Review, among others.

Dr. Render has also been honored as an AACSB Fellow and was twice named as a Senior FullbrightScholar. He was vice-president of the Decision Science Institute Southwest Region and served asSoftware Review Editor for Decision Line for 6 years. He has also served as Editor of the New YorkTimes Operations Management special issues from 1996 to 2001. Finally, Professor Render hasbeen actively involved in consulting for government agencies and for many corporations, includingNASA, FBI, U.S. Navy, Fairfax County, Virginia, and C&P Telephone.

He teaches operations management courses in Rollins College’s MBA and Executive MBA pro-grams. He has been named as that school’s Professor of the Year, and was recently selected byRoosevelt University to receive the St. Claire Drake Award for Outstanding Scholarship.

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Brief Contents

PART ONEIntroduction to Operations Management 1

1. Operations and Productivity 1

2. Operations Strategy in a Global Environment 25

3. Project Management 53

4. Forecasting 103

PART TWODesigning Operations 1 5 5

5. Design of Goods and Services 155

6. Managing Quality 191

Supplement 6: Statistical Process Control 221

7. Process Strategy 253

Supplement 7: Capacity Planning 285

8. Location Strategies 309

9. Layout Strategy 339

10. Human Resources and Job Design 381

Supplement 10: Work Measurement 407

PART THREEManaging Operations 4 2 9

11. Supply-Chain Management 429

Supplement 11: E-Commerce and OperationsManagement 459

12. Inventory Management 473

13. Aggregate Planning 515

14. Material Requirements Planning (MRP) and ERP 549

15. Short-Term Scheduling 587

16. Just-in-Time and Lean Production Systems 625

17. Maintenance and Reliability 653

PART FOURQuantitative Modules 6 7 3

A. Decision-Making Tools 673

B. Linear Programming 691

C. Transportation Models 723

D. Waiting-Line Models 743

E. Learning Curves 771

F. Simulation 785

CD-ROM Tutorials

1. Statistical Tools for Managers T1-1

2. Acceptance Sampling T2-1

3. The Simplex Method of Linear Programming T3-1

4. The MODI and VAM Methods of SolvingTransportation Problems T4-1

5. Vehicle Routing and Scheduling T5-1

ix

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Contents

About the Authors viPreface xxi

PART ONEIntroduction to Operations Management 1

1. Operations and Productivity 1Global 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 6

How This Book Is Organized 6

The Heritage of Operations Management 7

Operations in the Service Sector 9

Differences between Goods and Services 9

Growth of Services 10

Service Pay 11

Exciting New Trends in Operations Management 12

The Productivity Challenge 13

Productivity Measurement 14

Productivity Variables 16

Productivity and the Service Sector 17

Ethics and Social Responsibility 18

Summary 19 • Key Terms 19 • Solved Problems 19 •Internet and Student CD-ROM Exercises 20 •Discussion Questions 20 • Ethical Dilemma 21 •Problems 21 • Internet Homework Problems 23 •Case Study: National Air Express 23 • Case Study:Zychol Chemicals Corporation 23 • Video CaseStudy: Hard Rock Cafe: Operations Management inServices 24 • Additional Case Study 24 •Bibliography 24 • Internet Resources 24

2. Operations Strategy in a GlobalEnvironment 25Global Company Profile: Boeing 26

A Global View of Operations 28

Cultural and Ethical Issues 31

Developing Missions and Strategies 31

Mission 31

Strategy 32

Achieving Competitive Advantage Through Operations 33

Competing on Differentiation 34

Competing on Cost 34

Competing on Response 35

Ten Strategic OM Decisions 36

Issues in Operations Strategy 39

Research 39

Preconditions 40

Dynamics 40

Strategy Development and Implementation 41

Identify Critical Success Factors 41

Build and Staff the Organization 42

Integrate OM with Other Activities 43

Global Operations Strategy Options 43

International Strategy 44

Multidomestic Strategy 44

Global Strategy 45

Transnational Strategy 45

Summary 46 • Key Terms 46 • Solved Problem 47 •Internet and Student CD-ROM Exercises 47 •Discussion Questions 47 • Ethical Dilemma 48 •Problems 48 • Case Study: Minit-Lube,Inc. 49 • Video Case Study: Strategy at RegalMarine 49 • Video Case Study: Hard Rock Cafe’s Global Strategy 49 • Additional Case Studies 50 • Bibliography 51 • Internet Resources 51

3. Project Management 53Global Company Profile: Bechtel Group 54

The Importance of Project Management 56

Project Planning 56

The Project Manager 57

Work Breakdown Structure 58

Project Scheduling 59

Project Controlling 60

Project Management Techniques: PERT and CPM 61

The Framework of PERT and CPM 61

Network Diagrams and Approaches 61

Activity-on-Node Example 63

Activity-on-Arrow Example 65

Determining the Project Schedule 65

Forward Pass 66

Backward Pass 68

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Calculating Slack Time and Identifying the CriticalPath(s) 69

Variability in Activity Times 70

Three Time Estimates in PERT 71

Probability of Project Completion 73

Cost-Time Trade-Offs and Project Crashing 75

A Critique of PERT and CPM 78

Using Microsoft Project to Manage Projects 79

Creating a Project Schedule Using MS Project 79

Tracking Progress and Managing Costs Using MSProject 82

Summary 83 • Key Terms 83 • Using Software toSolve Project Management Problems 83 • SolvedProblems 84 • Internet and Student CD-ROMExercises 88 • Discussion Questions 88 • EthicalDilemma 88 • Active Model Exercise 89 • Problems90 • Internet Homework Problems 97 • Case Study:Southwestern University: (A) 97 • Video CaseStudy: Project Management at Arnold PalmerHospital 98 • Video Case Study: Managing HardRock’s Rockfest 99 • Additional Case Studies 100 •Bibliography 101 • Internet Resources 101

4. Forecasting 103Global Company Profile: Tupperware Corporation 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 112

Measuring Forecast Error 114

Exponential Smoothing with Trend Adjustment 117

Trend Projections 120

Seasonal Variations in Data 122

Cyclical Variations in Data 127

Associative Forecasting Methods: Regression andCorrelation Analysis 127

Using Regression Analysis to Forecast 127

Standard Error of the Estimate 129

Correlation Coefficients for Regression Lines 130

Multiple-Regression Analysis 131

Monitoring and Controlling Forecasts 132

Adaptive Smoothing 134

Focus Forecasting 134

Forecasting in the Service Sector 134

Summary 135 • Key Terms 137 • Using Software in Forecasting 137 • Solved Problems 138 • Internetand Student CD-ROM Exercises 140 • DiscussionQuestions 140 • Ethical Dilemma 141 • ActiveModel Exercise 141 • Problems 142 • InternetHomework Problems 151 • Case Study:Southwestern University: (B) 151 • Case Study:Digital Cell Phone, Inc. 152 • Video Case Study:Forecasting at Hard Rock Cafe 152 • AdditionalCase Studies 153 • Bibliography 153 • InternetResources 154

PART TWODesigning Operations 1 5 5

5. Design of Goods and Services 155Global Company Profile: Regal Marine 156

Goods and Services Selection 158

Product Strategy Options Support CompetitiveAdvantage 158

Product Life Cycles 159

Life Cycle and Strategy 160

Product-by-Value Analysis 160

Generating New Products 160

New Product Opportunities 161

Importance of New Products 162

Product Development 162

Product Development System 162

Quality Function Deployment (QFD) 163

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

Value Analysis 169

Ethics and Environmentally Friendly Designs 169

Time-Based Competition 172

Purchasing Technology by Acquiring a Firm 173

Joint Ventures 173

Alliances 173

X I I CO N T E N T S

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Defining the Product 174

Make-or-Buy Decisions 175

Group Technology 176

Documents for Production 176

Product Life-Cycle Management (PLM) 177

Service Design 178

Documents for Services 180

Application of Decision Trees to Product Design 181

Transition to Production 182

Summary 183 • Key Terms 183 • Solved Problem183 • Internet and Student CD-ROM Exercises 184• Discussion Questions 184 • Ethical Dilemma 185 •Active Model Exercise 185 • Problems 186 •Internet Homework Problems 188 • Case Study: DeMar’s Product Strategy 188 • Video Case Study:Product Design at Regal Marine 188 • AdditionalCase Studies 189 • Bibliography 189 • InternetResources 189

6. Managing Quality 191Global 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 197

ISO 9000 197

ISO 14000 198

Total Quality Management 198

Continuous Improvement 198

Six Sigma 199

Employee Empowerment 199

Benchmarking 200

Just-in-Time (JIT) 201

Taguchi Concepts 202

Knowledge of TQM Tools 203

Tools of TQM 203

Check Sheets 203

Scatter Diagrams 204

Cause-and-Effect Diagrams 204

Pareto Charts 205

Flowcharts 205

Histograms 206

Statistical Process Control (SPC) 206

The Role of Inspection 206

When and Where to Inspect 207

Source Inspection 207

Service Industry Inspection 208

Inspection of Attributes versus Variables 208

TQM in Services 209

Summary 211 • Key Terms 211 • Internet andStudent CD-ROM Exercises 211 • DiscussionQuestions 212 • Ethical Dilemma 212 • ActiveModel Exercise 212 • Problems 213 • InternetHomework Problems 215 • Case Study:Southwestern University: (C) 215 • Video CaseStudy: The Culture of Quality at Arnold PalmerHospital 217 • Video Case Study: Quality at theRitz-Carlton Hotel Company 217 • Additional Case Studies 218 • Bibliography 218 • InternetResources 219

Supplement 6: Statistical Process Control 221Statistical Process Control (SPC) 222

Control Charts for Variables 224

The Central Limit Theorem 225

Setting Mean Chart Limits ( -Charts) 226

Setting Range Chart Limits (R-Charts) 228

Using Mean and Range Charts 228

Control Charts for Attributes 230

Managerial Issues and Control Charts 233

Process Capability 235

Process Capability Ratio (Cp) 235

Process Capability Index (Cpk) 236

Acceptance Sampling 237

Operating Characteristic Curve 237

Average Outgoing Quality 238

Summary 240 • Key Terms 240 • Using Software forSPC 240 • Solved Problems 242 • Internet andStudent CD-ROM Exercises 243 • DiscussionQuestions 243 • Active Model Exercise 244 •Problems 244 • Internet Homework Problems 250 •Case Study: Bayfield Mud Company 250 • CaseStudy: Alabama Airlines’ On-Time Schedule 251 •Additional Case Studies 252 • Bibliography 252 •Internet Resources 252

7. Process Strategy 253Global Company Profile: Dell Computer Corp. 254

Four Process Strategies 256

Process Focus 256

Repetitive Focus 258

Product Focus 259

Mass Customization Focus 260

Comparison of Process Choices 262

Process Analysis and Design 265

Flow Diagrams 265

Time-Function Mapping 266

Value-Stream Mapping 266

Process Charts 266

Service Blueprinting 267

x

CO N T E N T S X I I I

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Service Process Design 268

Customer Interaction and Process Design 269

More Opportunities to Improve Service Processes 270

Selection of Equipment and Technology 271

Production Technology 271

Machine Technology 271

Automatic Identification System (AIS) 272

Process Control 272

Vision Systems 273

Robots 273

Automated Storage and Retrieval System (ASRS) 273

Automated Guided Vehicle (AGV) 274

Flexible Manufacturing System (FMS) 274

Computer-Integrated Manufacturing (CIM) 274

Technology in Services 275

Process Redesign 276

Ethics and Environmentally Friendly Processes 277

Summary 279 • Key Terms 279 • Solved Problem 279• Internet and Student CD-ROM Exercises 279 •Discussion Questions 280 • Ethical Dilemma 280 •Active Model Exercise 280 • Problems 281 • CaseStudy: Rochester Manufacturing Corporation 282 •Video Case Study: Process Analysis at Arnold PalmerHospital 282 • Video Case Study: Process Strategy atWheeled Coach 283 • Additional Case Studies 283 •Bibliography 284 • Internet Resources 284

Supplement 7: Capacity Planning 285Capacity 286

Design and Effective Capacity 287

Capacity and Strategy 288

Capacity Considerations 288

Managing Demand 289

Capacity Planning 290

Break-Even Analysis 291

Single-Product Case 293

Multiproduct Case 293

Applying Decision Trees to Capacity Decisions 295

Applying Investment Analysis to Strategy-DrivenInvestments 296

Investment, Variable Cost, and Cash Flow 296

Net Present Value 296

Summary 299 • Key Terms 300 • Using Software forBreak-Even Analysis 300 • Solved Problems 301 •Internet and Student CD-ROM Exercises 302 •Discussion Questions 302 • Problems 302 • InternetHomework Problems 306 • Video Case Study:Capacity Planning at Arnold Palmer Hospital 307 •Additional Case Studies 307 • Bibliography 308 •Internet Resources 308

X I V CO N T E N T S

8. Location Strategies 309Global Company Profile: Federal Express 310

The Strategic Importance of Location 312

Factors that Affect Location Decisions 313

Labor Productivity 314

Exchange Rates and Currency Risk 314

Costs 315

Attitudes 316

Proximity to Markets 316

Proximity to Suppliers 316

Proximity to Competitors (Clustering) 316

Methods of Evaluating Location Alternatives 317

The Factor-Rating Method 317

Locational Break-Even Analysis 318

Center-of-Gravity Method 319

Transportation Model 321

Service Location Strategy 322

How Hotel Chains Select Sites 322

The Telemarketing Industry 324

Geographic Information Systems 324

Summary 325 • Key Terms 326 • Using Software toSolve Location Problems 326 • Solved Problems327 • Internet and Student CD-ROM Exercises 328• Discussion Questions 328 • Ethical Dilemma 329 •Active Model Exercise 329 • Problems 330 •Internet Homework Problems 336 • Case Study:Southern Recreational Vehicle Company 336 •Video Case Study: Where to Place Hard Rock’s NextCafe 336 • Additional Case Studies 337 •Bibliography 338 • Internet Resources 338

9. Layout Strategy 339Global Company Profile: McDonald’s 340

The Strategic Importance of Layout Decisions 342

Types of Layout 342

Office Layout 343

Retail Layout 344

Servicescapes 345

Warehousing and Storage Layouts 346

Cross-Docking 346

Random Stocking 347

Customizing 347

Fixed-Position Layout 348

Process-Oriented Layout 349

Computer Software for Process-Oriented Layouts 353

Work Cells 354

Requirements of Work Cells 354

Staffing and Balancing Work Cells 356

The Focused Work Center and the Focused Factory 357

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Repetitive and Product-Oriented Layout 358

Assembly-Line Balancing 359

Summary 363 • Key Terms 363 • Using Software toSolve Layout Problems 364 • Solved Problems 365 •Internet and Student CD-ROM Exercises 368 •Discussion Questions 368 • Ethical Dilemma 368 •Active Model Exercise 368 • Problems 369 • InternetHomework Problems 376 • Case Study: StateAutomobile License Renewals 376 • Video CaseStudy: Laying Out Arnold Palmer Hospital’s NewFacility 377 • Video Case Study: Facility Layout atWheeled Coach 378 • Additional Case Studies 379 •Bibliography 379 • Internet Resources 379

10. Human Resources and Job Design 381Global Company Profile: Southwest Airlines 382

Human Resource Strategy for Competitive Advantage 384

Constraints on Human Resource Strategy 384

Labor Planning 385

Employment-Stability Policies 385

Work Schedules 385

Job Classifications and Work Rules 386

Job Design 386

Labor Specialization 386

Job Expansion 387

Psychological Components of Job Design 388

Self-Directed Teams 389

Motivation and Incentive Systems 390

Ergonomics and Work Methods 391

The Visual Workplace 396

Ethics and The Work Environment 398

Labor Standards 398

Summary 398 • Key Terms 399 • Solved Problem399 • Internet and Student CD-ROM Exercises 401• Discussion Questions 401 • Ethical Dilemma 401 •Problems 402 • Internet Homework Problems 402 •Case Study: Karstadt versus J.C. Penney 403 • CaseStudy: The Fleet That Wanders 403 • Video CaseStudy: Hard Rock’s Human Resource Strategy 404 •Additional Case Studies 405 • Bibliography 405 •Internet Resources 405

Supplement 10: Work Measurement 407Labor Standards and Work Measurement 408

Historical Experience 409

Time Studies 409

Predetermined Time Standards 413

Work Sampling 415

Summary 418 • Key Terms 418 • Solved Problems418 • Internet and Student CD-ROM Exercises 420• Discussion Questions 420 • Active Model Exercise421 • Problems 421 • Internet Homework Problems

CO N T E N T S X V

425 • Case Study: Jackson Manufacturing Company426 • Additional Case Studies 426 • Bibliography426 • Internet Resources 427

PART THREEManaging Operations 4 2 9

11. Supply-Chain Management 429Global Company Profile: Volkswagen 430

The Strategic Importance of the Supply Chain 432

Global Supply-Chain Issues 433

Supply-Chain Economics 434

Make-or-Buy Decisions 434

Outsourcing 435

Ethics in the Supply Chain 437

Supply-Chain Strategies 438

Many Suppliers 438

Few Suppliers 438

Vertical Integration 438

Keiretsu Networks 440

Virtual Companies 440

Managing the Supply Chain 441

Issues in an Integrated Supply Chain 441

Opportunities in an Integrated Supply Chain 443

Internet Purchasing 445

Vendor Selection 446

Vendor Evaluation 446

Vendor Development 447

Negotiations 447

Logistics Management 448

Distribution Systems 448

Cost of Shipping Alternatives 450

Logistics, Security, and JIT 450

Benchmarking Supply-Chain Management 450

Summary 451 • Key Terms 451 • Internet andStudent CD-ROM Exercises 451 • DiscussionQuestions 452 • Ethical Dilemma 452 • Problems452 • Internet Homework Problem 453 • CaseStudy: Dell’s Supply Chain and the Impact of E-Commerce 453 • Video Case Study: ArnoldPalmer Hospital’s Supply Chain 454 • Video CaseStudy: Supply-Chain Management at Regal Marine455 • Additional Case Studies 456 • Bibliography456 • Internet Resources 457

Supplement 11: E-Commerce and OperationsManagement 459The Internet 460

Electronic Commerce 461

E-Commerce Definitions 462

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Economics of E-Commerce 462

Product Design 463

Collaborative Project Management 464

E-Procurement 464

Online Catalogs 464

RFQs and Bid Packaging 465

Internet Outsourcing 465

Online Auctions 466

Inventory Tracking 466

Inventory Reduction 467

Warehousing for E-Commerce 467

Just-in-Time Delivery for E-Commerce 468

Scheduling and Logistics Improvements 468

Coordinated Pickup and Delivery 468

Logistics Cost Reduction 469

Summary 469 • Key Terms 469 • Internet and StudentCD-ROM Exercises 469 • Discussion Questions 469 •Problems 469 • Case Study: E-Commerce atAmazon.com 470 • Additional Case Studies 471 •Bibliography 471 • Internet Resources 471

12. Inventory Management 473Global Company Profile: Amazon.com 474

Functions of Inventory 476

Types of Inventory 476

Inventory Management 477

ABC Analysis 477

Record Accuracy 478

Cycle Counting 479

Control of Service Inventories 480

Inventory Models 480

Independent versus Dependent Demand 480

Holding, Ordering, and Setup Costs 481

Inventory Models for Independent Demand 481

The Basic Economic Order Quantity (EOQ) Model 482

Minimizing Costs 482

Reorder Points 486

Production Order Quantity Model 487

Quantity Discount Models 490

Probabilistic Models and Safety Stock 492

Other Probabilistic Models 495

Fixed-Period (P) Systems 497

Summary 498 • Key Terms 499 • Using Software toSolve Inventory Problems 500 • Solved Problems501 • Internet and Student CD-ROM Exercises 503• Discussion Questions 504 • Ethical Dilemma 504 •Active Model Exercise 504 • Problems 505 •Internet Homework Problems 511 • Case Study:Zhou Bicycle Company 511 • Case Study:Sturdivant Sound Systems 511 • Video Case Study:

X V I CO N T E N T S

Inventory Control at Wheeled Coach 512 •Additional Case Studies 512 • Bibliography 512 •Internet Resources 513

13. Aggregate Planning 515Global Company Profile: Anheuser-Busch 516

The Planning Process 518

The Nature of Aggregate Planning 518

Aggregate Planning Strategies 520

Capacity Options 520

Demand Options 521

Mixing Options to Develop a Plan 523

Methods for Aggregate Planning 524

Graphical and Charting Methods 524

Mathematical Approaches to Planning 527

Comparison of Aggregate Planning Methods 530

Aggregate Planning in Services 530

Restaurants 531

Hospitals 531

National Chains of Small Service Firms 531

Miscellaneous Services 531

Airline Industry 532

Yield Management 532

Summary 535 • Key Terms 535 • Using Software forAggregate Planning 535 • Solved Problems 536 •Internet and Student CD-ROM Exercises 538 •Discussion Questions 538 • Ethical Dilemma 538 •Active Model Exercise 539 • Problems 540 •Internet Homework Problems 545 • Case Study:Southwestern University: (G) 545 • Case Study:Andrew-Carter, Inc. 546 • Additional Case Studies547 • Bibliography 547 • Internet Resources 547

14. Material Requirements Planning (MRP)and ERP 549Global Company Profile: Collins Industries 550

Dependent Inventory Model Requirements 552

Master Production Schedule 552

Bills of Material 555

Accurate Inventory Records 556

Purchase Orders Outstanding 556

Lead Times for Each Component 557

MRP Structure 558

MRP Management 561

MRP Dynamics 561

MRP and JIT 562

Lot-Sizing Techniques 563

Extensions of MRP 566

Closed-Loop MRP 567

Capacity Planning 567

Material Requirements Planning II (MRP II) 568

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MRP in Services 568

Distribution Resource Planning (DRP) 570

Enterprise Resource Planning (ERP) 570

Advantages and Disadvantages of ERP Systems 573

ERP in the Service Sector 573

Summary 574 • Key Terms 574 • Using Software toSolve MRP Problems 574 • Solved Problems 575 •Internet and Student CD-ROM Exercises 578 •Discussion Questions 578 • Ethical Dilemma 578 •Active Model Exercise 578 • Problems 579 •Internet Homework Problems 584 • Case Study:Ikon’s Attempt at ERP 584 • Video Case Study:MRP at Wheeled Coach 585 • Additional CaseStudies 585 • Bibliography 586 • Internet Resources 586

15. Short-Term Scheduling 587Global Company Profile: Delta Airlines 588

The Strategic Importance of Short-Term Scheduling 590

Scheduling Issues 590

Forward and Backward Scheduling 591

Scheduling Criteria 593

Scheduling Process-Focused Facilities 593

Loading Jobs 594

Input-Output Control 594

Gantt Charts 595

Assignment Method 597

Sequencing Jobs 599

Priority Rules for Dispatching Jobs 599

Critical Ratio 602

Sequencing N Jobs on Two Machines: Johnson’sRule 603

Limitations of Rule-Based Dispatching Systems 604

Finite Capacity Scheduling (FCS) 605

Theory of Constraints 606

Bottlenecks 606

Drum, Buffer, Rope 607

Scheduling Repetitive Facilities 608

Scheduling Services 608

Scheduling Service Employees with CyclicalScheduling 609

Summary 611 • Key Terms 611 • Using Software forShort-Term Scheduling 611 • Solved Problems 613 •Internet and Student CD-ROM Exercises 616 •Discussion Questions 616 • Ethical Dilemma 617 •Active Model Exercise 617 • Problems 618 •Internet Homework Problems 622 • Case Study:Payroll Planning, Inc. 622 • Video Case Study:Scheduling at Hard Rock Cafe 623 • AdditionalCase Studies 624 • Bibliography 624 • InternetResources 624

CO N T E N T S X V I I

16. Just-in-Time and Lean Production Systems 625Global Company Profile: Green Gear Cycling 626

Just-in-Time and Lean Production 628

Suppliers 629

Goals of JIT Partnerships 630

Concerns of Suppliers 632

JIT Layout 632

Distance Reduction 632

Increased Flexibility 632

Impact on Employees 632

Reduced Space and Inventory 633

Inventory 633

Reduce Variability 633

Reduce Inventory 634

Reduce Lot Sizes 634

Reduce Setup Costs 636

Scheduling 637

Level Schedules 637

Kanban 637

Quality 641

Employee Empowerment 641

Lean Production 641

Building a Lean Organization 642

5 S’s 643

Seven Wastes 644

JIT in Services 644

Summary 645 • Key Terms 645 • Solved Problem646 • Internet and Student CD-ROM Exercises 646• Discussion Questions 646 • Ethical Dilemma 647 •Problems 647 • Internet Homework Problems 648 •Case Study: Mutual Insurance Company of Iowa649 • Case Study: JIT After the Fire 650 • VideoCase Study: JIT at Arnold Palmer Hospital 650 •Additional Case Studies 651 • Bibliography 651 •Internet Resources 652

17. Maintenance and Reliability 653Global Company Profile: Orlando UtilitiesCommission 654

The Strategic Importance of Maintenance andReliability 656

Reliability 657

Improving Individual Components 657

Providing Redundancy 659

Maintenance 660

Implementing Preventive Maintenance 660

Increasing Repair Capabilities 663

Total Productive Maintenance 664

Techniques for Establishing Maintenance Policies 664

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Summary 664 • Key Terms 665 • Using Software toSolve Reliability Problems 665 • Solved Problems665 • Internet and Student CD-ROM Exercises 666• Discussion Questions 666 • Ethical Dilemma 666 •Problems 666 • Internet Homework Problems 669 •Case Study: Worldwide Chemical Company 669 •Additional Case Studies 670 • Bibliography 670 •Internet Resources 671

PART FOURQuantitative Modules 6 7 3

A. Decision-Making Tools 673The Decision Process in Operations 674

Fundamentals of Decision Making 675

Decision Tables 675

Types of Decision-Making Environments 676

Decision Making Under Uncertainty 676

Decision Making Under Risk 677

Decision Making Under Certainty 677

Expected Value of Perfect Information (EVPI) 678

Decision Trees 678

A More Complex Decision Tree 680

Using Decision Trees in Ethical Decision Making 681

Summary 682 • Key Terms 682 • Using Software forDecision Models 683 • Solved Problems 683 •Internet and Student CD-ROM Exercises 684 •Discussion Questions 684 • Problems 685 • InternetHomework Problems 689 • Case Study: TomTucker’s Liver Transplant 689 • Case Study: SkiRight Corp. 689 • Additional Case Studies 690 •Bibliography 690

B. Linear Programming 691Requirements of a Linear Programming Problem 693

Formulating Linear Programming Problems 693

Shader Electronics Example 693

Graphical Solution to a Linear Programming Problem 694

Graphical Representation of Constraints 694

Iso-Profit Line Solution Method 696

Corner-Point Solution Method 698

Sensitivity Analysis 699

Sensitivity Report 699

Changes in the Resources or Right-Hand-SideValues 700

Changes in the Objective Function Coefficient 701

Solving Minimization Problems 701

Linear Programming Applications 703

Production-Mix Example 703

Diet Problem Example 704

X V I I I CO N T E N T S

Production Scheduling Example 705

Labor Scheduling Example 706

The Simplex Method of LP 708

Summary 708 • Key Terms 708 • Using Software toSolve LP Problems 708 • Solved Problems 710 •Internet and Student CD-ROM Exercises 712 •Discussion Questions 712 • Active Model Exercise713 • Problems 713 • Internet Homework Problems720 • Case Study: Golding Landscaping and Plants,Inc. 720 • Additional Case Studies 720 •Bibliography 721

C. Transportation Models 723Transportation Modeling 724

Developing an Initial Solution 725

The Northwest-Corner Rule 726

The Intuitive Lowest-Cost Method 726

The Stepping-Stone Method 727

Special Issues in Modeling 730

Demand Not Equal to Supply 730

Degeneracy 731

Summary 732 • Key Terms 732 • Using Software to Solve Transportation Problems 732 • SolvedProblems 734 • Internet and Student CD-ROMExercises 735 • Discussion Questions 736 •Problems 736 • Internet Homework Problems 740 •Case Study: Custom Vans, Inc. 740 • AdditionalCase Studies 742 • Bibliography 742

D. Waiting-Line Models 743Characteristics of a Waiting-Line System 745

Arrival Characteristics 745

Waiting-Line Characteristics 746

Service Characteristics 747

Measuring the Queue’s Performance 747

Queuing Costs 749

The Variety of Queuing Models 750

Model A: Single-Channel Queuing Model withPoisson Arrivals and Exponential Service Times 750

Model B: Multiple-Channel Queuing Model 753

Model C: Constant-Service-Time Model 756

Model D: Limited-Population Model 756

Other Queuing Approaches 758

Summary 759 • Key Terms 759 • Using Software toSolve Queuing Problems 759 • Solved Problems760 • Internet and Student CD-ROM Exercises 762• Discussion Questions 762 • Active ModelExercise 763 • Problems 763 • Internet HomeworkProblems 767 • Case Study: New England Foundry767 • Case Study: The Winter Park Hotel 768 •Additional Case Study 768 • Bibliography 769 •Internet Resources 769

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E. Learning Curves 771Learning Curves in Services and Manufacturing 773

Applying the Learning Curve 774

Arithmetic Approach 774

Logarithmic Approach 774

Learning-Curve Coefficient Approach 775

Strategic Implications of Learning Curves 776

Limitations of Learning Curves 777

Summary 777 • Key Term 778 • Using Software forLearning Curves 778 • Solved Problems 778 •Internet and Student CD-ROM Exercises 779 •Discussion Questions 779 • Active Model Exercise780 • Problems 780 • Internet Homework Problems783 • Case Study: SMT’s Negotiation with IBM 783• Bibliography 784 • Internet Resources 784

F. Simulation 785What is Simulation? 786

Advantages and Disadvantages of Simulation 787

Monte Carlo Simulation 787

Simulation of a Queuing Problem 791

Simulation and Inventory Analysis 792

Summary 795 • Key Terms 795 • Using Software inSimulation 795 • Solved Problems 797 • Internetand Student CD-ROM Exercises 798 • DiscussionQuestions 798 • Problems 799 • Internet HomeworkProblems 805 • Case Study: Alabama Airlines’Call Center 806 • Additional Case Studies 806 •Bibliography 806

Appendices A1Indices I1Photo Credits C1

CD-ROM Tutorials

1. Statistical Tools for Managers T1-1Discrete Probability Distributions T1-2

Expected Value of a Discrete ProbabilityDistribution T1-3

Variance of a Discrete Probability Distribution T1-3

Continuous Probability Distributions T1-4

The Normal Distribution T1-4

Summary T1-7 • Key Terms T1-7 • DiscussionQuestions T1-7 • Problems T1-7 • Bibliography T1-8

2. Acceptance Sampling T2-1Sampling Plans T2-2

Single Sampling T2-2

CO N T E N T S X I X

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 ProblemT2-7 • Discussion Questions T2-7 • Problems T2-7

3. The Simplex Method of LinearProgramming T3-1Converting the Constraints to Equations T3-2

Setting Up the First Simplex Tableau T3-2

Simplex Solution Procedures T3-4

Summary of Simplex Steps for MaximizationProblems 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 SolvingTransportation Problems T4-1MODI 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 Findan Initial Solution T4-4

Discussion Questions T4-8 • Problems T4-8

5. Vehicle Routing and Scheduling T5-1Introduction 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

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 • DiscussionQuestions T5-15 • Problems T5-15 • Case Study:Routing and Scheduling of Phlebotomists T5-17 •Bibliography T5-17

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Preface

Welcome to your Operations Management (OM) course. In this book, we present a state-of-the-artview of the activities of the operations function. Operations is an exciting area of management thathas a profound effect on the productivity of both manufacturing and services. Indeed, few activitieshave as much impact on the quality of our lives. The goal of this text is to present a broad introduc-tion to the field of operations in a realistic, practical manner. Operations management includes ablend of topics from accounting, industrial engineering, management, management science, andstatistics. Even if you are not planning on a career in the operations area, you will likely be inter-facing with people who are. Therefore, having a solid understanding of the role of operations in anorganization is of substantial benefit to you. This book will also help you understand how OMaffects society and your life. Certainly, you will better understand what goes on behind the sceneswhen you buy a meal at Hard Rock Cafe, place an order through Amazon.com, buy a customizedDell Computer over the Internet, or enter Arnold Palmer Hospital for medical care.

Although many of our readers are not OM majors, we know that marketing, finance, account-ing, and MIS students will find the material both interesting and useful because we develop a fun-damental working knowledge of the firm. Over 400,000 readers of our earlier editions seem to haveendorsed this premise.

THREE VERSIONS ARE AVAILABLEThis text is available in the three versions: Operations Management, Eighth edition, which is hard-cover, Principles of Operations Management, Sixth Edition, a paperback, and OperationsManagement, Flexible Edition, a package of a paperback text and a unique Student Lecture Guide.All three books include the identical core chapters 1–17. However, Operations Management, EighthEdition and the Flexible Edition also include six quantitative modules in Part IV.

xxi

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OPERAT IONS MANAGEMENT,E IGHTH ED I T IONISBN : 0 -13 -185755 -XPAR T I INTR ODUCT ION1. Operations and Productivity2. Operations Strategy in a Global

Environment3. Project Management4. Forecasting

PAR T I I DES IGNING OPERAT IONS5. Design of Goods and Services6. Managing Quality

S6. Statistical Process Control7. Process Strategy

S7. Capacity Planning8. Location Strategies9. Layout Strategy

10. Human Resources and Job DesignS10. Work Measurement

PAR T I I I MANAGING OPERAT IONS11. Supply-Chain Management

S11. E-Commerce and Operations Management12. Inventory Management13. Aggregate Planning14. Material Requirements Planning (MRP)

and ERP15. Short-Term Scheduling16. Just-in-Time and Lean Production

Systems 17. Maintenance and Reliability

PAR T IV QUANT I TAT IVE MODULESA. Decision-Making ToolsB. Linear ProgrammingC. Transportation ModelsD. Waiting-Line ModelsE. Learning CurvesF. Simulation

PR INCIPLES OF OPERAT IONSMANAGEMENT, S IXTH ED I T IONISBN : 0 -13 -186512 -9PAR T I INTR ODUCT ION1. Operations and Productivity2. Operations Strategy in a Global

Environment3. Project Management4. Forecasting

PAR T I I DES IGNING OPERAT IONS5. Design of Goods and Services6. Managing Quality

S6. Statistical Process Control7. Process Strategy

S7. Capacity Planning8. Location Strategies9. Layout Strategy

10. Human Resources and Job DesignS10. Work Measurement

PAR T I I I MANAGING OPERAT IONS11. Supply-Chain Management

S11. E-Commerce and Operations Management12. Inventory Management13. Aggregate Planning14. Material Requirements Planning (MRP)

and ERP15. Short-Term Scheduling16. Just-in-Time and Lean Production

Systems 17. Maintenance and Reliability

X X I I PR E FAC E

FOCUS OF THE NEW EDITIONThe new edition continues to place a special focus on important aspects of Operations Managementincluding:

� Strategy and Ethics—as our unifying themes in every chapter.� Global Operations—and how this impacts product and process design, location, human

resources, and other issues.� Service Operations—recognizing the dominant proportion of jobs and operations deci-

sions in services.� Software for OM—our free Excel OM add-in, POM for Windows, and Lekin® Flexible Job

Shop Scheduling System software are included on the student CD-ROM packaged with thetext. Microsoft Project 2003 is also available on a separate free value pack CD upon request.

� Modern topical coverage—with coverage of Supply Chains, Six Sigma, the Internet,Microsoft Project, E-Commerce, ERP, yield management, and mass customization.

� Real world examples of operations management—to maximize student interest andexcitement.

� Active Model Exercises—to use interactive Excel spreadsheets of examples in the bookfor “what-if” analysis.

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NEW TO THIS EDITION

Service Integration with the Arnold Palmer Hospital and Seven New Video CaseStudies In this edition, we illustrate how operations management is put into practice at ArnoldPalmer Hospital, one of the top hospitals in the world. Arnold Palmer Hospital invited us to shoot“behind the scenes” operations functions of their organization, giving students an inside look atsuch issues as project management, quality, process analysis, capacity planning, facility layout, sup-ply chain management, and just-in-time inventory. This exciting and renowned facility, located inOrlando, Florida, emphasizing operations in a service environment, is featured throughout the textin examples, photos, video cases, and a Global Company Profile in Chapter 6. A VHS tape or DVDis available to adopters which includes seven 8–10 minute segments of each topic. The student CD-ROM also contains a 2-minute version of each of these videos. The videos have just receivedmajor awards in the annual Telly Award Competitions. Out of over 10,000 entries, the Quality videowas chosen as Winner and the Process Analysis video as Finalist.

Our previous edition focused on the Hard Rock Cafe, one of the most widely recognized com-pany names in the world. The seven video case studies we created for Hard Rock also appear in thisedition, making the combination of Hard Rock and Arnold Palmer Hospital the perfect way to inte-grate service applications into the OM course.

PR E FAC E X X I I I

VIDEO CASE STUDYVIDEO CASE STUDYArnold Palmer Hospital’s Supply Chain

Arnold Palmer Hospital, one of the nation’s top hospitals dedi-cated to serving women and children, is a large business withover 2,000 employees working in a 431-bed facility totaling676,000 square feet in Orlando, Florida. Like many other hospi-tals, and other companies, Arnold Palmer Hospital had been along-time member of a large buying group, one servicing 900members. But the group did have a few limitations. For example,it might change suppliers for a particular product every year(based on a new lower-cost bidder) or stock only a product thatwas not familiar to the physicians at Arnold Palmer Hospital. Thebuying group was also not able to negotiate contracts with localmanufacturers to secure the best pricing.

So in 2003, Arnold Palmer Hospital, together with sevenother partner hospitals in central Florida, formed its own muchsmaller, but still powerful (with $200 million in annual pur-chases) Healthcare Purchasing Alliance (HPA) corporation. Thenew alliance saved the HPA members $7 million in its first yearfrom two main changes. First, it was structured and staffed toassure that the bulk of the savings associated with its contractingefforts went to its eight members. Second, it struck even betterdeals with vendors by guaranteeing a committed volume andsigning not 1-year deals but 3–5 year contracts. “Even with anew internal cost of $400,000 to run HPA, the savings and abil-ity to contract for what our member hospitals really want makesthe deal a winner,” says George DeLong, head of HPA.

Effective supply-chain management in manufacturingoften focuses on development of new product innovations andefficiency through buyer–vendor collaboration. However, theapproach in a service industry has a slightly different emphasis.At Arnold Palmer Hospital, supply-chain opportunities oftenmanifest themselves through the Medical Economic OutcomesCommittee. This committee (and its subcommittees) consists ofusers (including the medical and nursing staff) who evaluate

purchase options with a goal of better medicine while achieving eco-nomic targets. For instance, the heart pacemaker negotiation by thecardiology subcommittee allowed for the standardization to two man-ufacturers, with annual savings of $2 million for just this one product.

Arnold Palmer Hospital is also able to develop custom productsthat require collaboration down to the third tier of the supply chain.This is the case with custom packs that are used in the operating room.The custom packs are delivered by a distributor, McKesson GeneralMedical, but assembled by a pack company that uses materials thehospital wanted purchased from specific manufacturers. The HPAallows Arnold Palmer Hospital to be creative in this way. With majorcost savings, standardization, blanket purchase orders, long-term con-tracts, and more control of product development, the benefits to thehospital are substantial.

D i s c u s s i o n Q u e s t i o n s *

1. How does this supply chain differ from that in a manufacturingfirm?

2. What are the constraints on making decisions based on economicsalone at Arnold Palmer Hospital?

3. What role do doctors and nurses play in supply-chain decisions in ahospital? How is this participation handled at Arnold PalmerHospital?

4. Doctor Smith just returned from the Annual Physician's OrthopedicConference, where she saw a new hip joint replacement demon-strated. She decides she wants to start using the replacement joint atArnold Palmer Hospital. What process will Dr. Smith have to gothrough at the hospital to introduce this new product into the supplychain for future surgical use?

*You may wish to view this case on your CD-ROM before answering thequestions.

Source: Written by Professors Barry Render (Rollins College), Jay Heizer(Texas Lutheran University), and Beverly Amer (Northern Arizona StateUniversity).

Homework Problem Material This text has long been known for its broad spectrum of mater-ial that can be assigned as homework. We offer Active Model Exercises, Discussion Questions,Homework Problems, Internet Homework Problems, Case Studies, Internet Case Studies, and VideoCase Studies. With this edition, we add the following five new features:

1. Ethics in Operations Management. Ethical decision-making is more important than ever in ourexciting and dynamic field of study. Operations managers, like other top executives, face a plethoraof difficult choices that stretch their ethical fibers every day. Each chapter features a new “Ethical

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X X I V PR E FAC E

PROGRAM 12.1 �Using Excel for aProduction Model, withData from Example 8

COMPUTATIONS

VALUE CELL EXCEL FORMULA

Optimal production quantity, Q* B12 =SQRT(2*B3*B4/B5)*SQRT(B6/(B6-B7))Maximum Inventory B13 =B12*(B6-B7)/B6Average Inventory B14 =B13/2Number of Setups B15 =B3/B12Time (days) between production runs B16 =B8/B15Holding cost B18 =B14*B5Setup cost B19 =B15*B4Unit costs B21 =B9*B3Total cost, Tc B22 =B18+B19+B21

Other Excel model building exercises are found throughout the text.

Dilemma” and most chapters have more integrated discussions of ethics as well. These exercisesmake an ideal way to generate thought and discussion of this issue.

ETHICAL DILEMMA

John Edwards, president of Edwards Toy Company, Inc. in SouthCarolina, has just reviewed the design of a new pull-toy locomotivefor 1- to 3-year-olds. John’s design and marketing staff are veryenthusiastic about the market for the product and the potential of follow-on circus train cars. The sales manager is looking forward to avery good reception at the annual toy show in Dallas next month.John, too, is delighted, as he is faced with a layoff if orders do notimprove.

John’s production people have worked out the manufacturingissues and produced a successful pilot run. However, the quality test-ing staff suggests that under certain conditions, a hook to attach cars tothe locomotive and the crank for the bell can be broken off. This is anissue because children can choke on small parts such as these. In thequality test, 1- to 3-year-olds were unable to break off these parts;

there were no failures. But when the test simulated the force of anadult tossing the locomotive into a toy box or a 5-year-old throwing iton the floor, there were failures. The estimate is that one of the twoparts can be broken off four times out of 100,000 throws. Neither thedesign nor the material people know how to make the toy safer andstill perform as designed. The failure rate is low and certainly accept-able for this type of toy, but not at the six-sigma level that John’s firmstrives for. And, of course, someone, someday may sue. A child chok-ing on the broken part is a serious matter. Also, John was recentlyreminded in a discussion with legal counsel that U.S. case law sug-gests that new products may not be produced if there is “actual or fore-seeable knowledge of a problem” with the product.

The design of successful, ethically produced, new products, assuggested in this chapter, is a complex task. What should John do?

2. More Challenging Homework Problems Added. One of the trademarks of our text has alwaysbeen the large selection of examples, solved problems, Internet and text homework problems. Our763 homework problems provide the largest, clearest, and now most diverse problem sets of anyOM text. With this edition, we increase from a 1, 2, 3 dot level of difficulty for each of these prob-lems, to a 1, 2, 3, 4 system having added challenging 4-dot problems to each chapter. These newhomework problems are intended to stretch the thinking of students.

3. Excel Spreadsheets. OM is an ideal field in which spreadsheet analysis can help determine thebest solution to a problem. Excel OM, our Excel add-in, is found on the student CD-ROM, and maybe used to tackle many of the problems in this text. But many professors prefer to let students buildtheir own Excel models. New to this edition are examples of how to do this. An inventory examplefrom Chapter 12 is illustrated below:

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4. OneKey With PH Grade Assist. OneKey provides an easy-to-use site for all digital resourcesavailable with our text, including our powerful new homework/exam feature called PH GradeAssist. With PH Grade Assist, many of the homework problems in this text and problems/questionsfrom our Test Item File may now be assigned online to students. With dozens of options for ran-domizing the sequence, timing, and scoring, PH Grade Assist makes giving and grading homeworkand exams an easy task. Scores of these problems have also been converted by the authors to an“algorithmic” form, meaning that there are numerous (sometimes 100’s) of versions of each prob-lem, with the data different for each student. Solutions to each problem and its data set are provided,if instructors wish, to the students immediately after they complete the assignment. Grades can berecorded by the software directly into the instructor’s grade book.

5. Decision-Making Exercises. Four new classroom exercises and their data files are found on theInstructor’s CD. The first is an MSProject exercise built as an expansion of the video case study“Managing Hard Rock’s Rockfest” (Chapter 3). The second is an Excel simulation of a ProjectManagement game called Rock’n Bands. The third is a Dice Game for Statistical Process Control(Supplement 6). The fourth is an inventory simulation, also Excel-based, called “He Shoots, HeScores” (Chapters 12 and 14).

POM for Windows Included Free on All Student CDs POM for Windows, long the leadingOM decision support software for educational use, is now available free on every student CD-ROM.The 24 OM programs in POM for Windows are shown below. All homework problems in the textthat can be solved with this program are labeled with a . With this addition, the book now offerstwo choices of software for problem solving: POM for Windows and Excel OM.

PR E FAC E X X V

Instruction notes arehere to help explainwhat to do next.

PROGRAM IV.2 � POM for Windows Module List

CHAPTER-BY-CHAPTER CHANGESTo highlight the extent of the revision of our previous edition, here are a few of the changes on achapter-by-chapter basis. Five of the chapters received major rewrites: Managing Quality (Chapter6), Process Strategy (Chapter 7), Supply Chain Management (Chapter 11), Inventory Management(Chapter 12), and Short-Term Scheduling (Chapter 15). A new Ethical Dilemma exercise is in everychapter.

Chapter 1: Operations and Productivity. New material on the growth of services, productiv-ity, and a section called Ethics and Social Responsibility are added.

Chapter 2: Operations Strategy in a Global Environment. A new Global Company Profilehighlighting the Boeing 787 opens the chapter and a new OM in Action box discusses strategy atBelgium’s food retailer Franz Colruyt.

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Chapter 3: Project Management. The chapter now includes a section on Ethical Issues inProject management, a new OM in Action box on the Acela Amtrak project, and a new video casestudy called “Project Management at Arnold Palmer Hospital.” We have also added a project crash-ing exercise using MSProject and the Hard Rock Rockfest case, and a project simulation gamecalled Rock ’n Bands. Both of these appear on the Instructor’s CD.

Chapter 4: Forecasting. We have added a section on how to create your own Excel Forecastingmodels and have expanded the Hard Rock case study to include a data set for quantitative forecasting.

Chapter 5: Design of Goods and Services. Our treatment now includes a major section on“Ethics and Environmentally Friendly Designs,” new OM in Action boxes on “Chasing Fads in theCell Phone Industry” and “Toyota is Revving Up with PLM,” as well as text material on ProductLifecycle Management. There are also four new homework problems.

Chapter 6: Managing Quality. This chapter opens with a new Global Company Profile featur-ing Arnold Palmer Hospital and ends with a video case study of quality at that organization. Thereis a new section of the chapter called Leaders in Quality, coverage of Ethics and QualityManagement, and a much expanded treatment of Six Sigma. We have also broadened our coverageof TQM in services with new examples at UPS and Marriott.

Supplement to Chapter 6: Statistical Process Control. We have added a new section onCreating Excel Spreadsheets to determine control limits, included 3 new homework problems, anda Dice Game for Statistical Control.

Chapter 7: Process Strategy. This chapter contains several new topics, including the concept ofBuild-to-Order, treatment of Focused Processes, more coverage of Value Stream Mapping, Ethicsand the Environmentally Friendly Processes, and new technology for remote control surgery. Thereis also a new OM in Action box on process change in Japanese barber shops and a new video casestudy called “Process Analysis at Arnold Palmer Hospital,” which requires the creation of threeprocess flow charts by students.

Supplement to Chapter 7: Capacity Planning. Our new video case study, “CapacityPlanning at Arnold Palmer Hospital,” requires the use of regression analysis to forecast when newhospital floors should be opened. There is also a new 4-dot (challenging) homework problem added.

Chapter 8: Location Strategies. New topics include Location and Innovation, Ethical Issues inlocation decisions, a new Table 8.3 on Clustering, a new OM in Action box dealing with Starbuck’sentry into Japan, a new 4-dot homework problem, and a revision of the Hard Rock case study toinclude data for quantitative analysis.

Chapter 9: Layout Strategy. We have extended coverage of Work Cells, included an example ofstaffing and balancing with “takt time,” and resequenced treatment of seven types of layout.“Laying Out Arnold Palmer’s New Facility” is a new video case study involving a quantitative com-parison of two hospital layouts.

Chapter 10: Human Resources and Job Design. This chapter includes new sections on theVisual Workplace and Ethics and the Work Environment.

Supplement to Chapter 10: Work Measurement. We have added a 4 dot (challenging)homework problem to the 29 other problems.

Chapter 11: Supply Chain Management. This chapter sees major revisions and additions,including a new Figure 11.1 illustrating the supply chain for beer, extensive new coverage ofOutsourcing including the OM in Action box “Outsourcing Not to India, but to Remote Corners ofthe U.S.,” a section in Ethics in the Supply Chain that includes the Principles of Conduct by theInstitute for Supply Management, new material on vertical integration, a new OM in Action box onPenney’s supply chain to Taiwan for shirts, expanded coverage of Internet Purchasing, and a sectioncalled “Logistics, Security, and JIT.” Finally, we have added another new video case study called“Arnold Palmer Hospital’s Supply Chain.”

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Supplement to Chapter 11: E-Commerce and Operations Management. We haveupdated this timely supplement with a new section on Collaborative Project Management, newmaterial on Ariba’s B2B model, and a new OM in Action box called “Mars Online Auctions Win theShipping Game.”

Chapter 12: Inventory Management. We now include material on creating your own inven-tory Excel Spreadsheets. A new section called Probabilistic Models and Safety Stock containsexpanded coverage of probabilistic inventory. This includes models where (1) demand is variableand lead time is constant, (2) only lead time is variable, and (3) both demand and lead time are vari-able. There are three new examples, two new Solved Problems, and four new homework problems,including a 4-dot difficulty problem. We also added an OM in Action box dealing with Anheuser-Busch’s national system for controlling inventory, and a new case study called Zhou BicycleCompany. Finally, we include an inventory simulation game called “He Shoots, He Scores” on theInstructor’s CD.

Chapter 13: Aggregate Planning. Figure 13.5 and 13.6, dealing with yield management, havebeen treated in more detail.

Chapter 14:Material Requirements Planning and ERP. We have added 3 new discussion ques-tions and two new 4-dot, challenging homework problems. We have also added the topics of FiniteCapacity scheduling and “supermarkets” (which join MRP and JIT), expanded coverage of MRP inServices, and doubled our treatment of ERP. There is a new figure detailing SAP’s ERP modules.

Chapter 15: Short-Term Scheduling. The relationship between capacity planning, aggregateplanning, master schedule, and short-term scheduling is laid out graphically in a new Figure 15.1.We now explain how 4 different processes suggest different approaches to scheduling (Table 15.2),have added the topic of ConWIP cards, increased coverage of Finite Capacity Scheduling, addedLekin software (for finite capacity scheduling) to our CD-ROM, and increased material on theTheory of Constraints, including drum, buffer, rope. The section on Service Scheduling has beenexpanded and a detailed example of Cyclical Scheduling (Example 8) has been added, along with 2new homework problems on the topic.

Chapter 16: Just-in-time and Lean Production Systems. We have increased coverage onToyota Production System (TPS) and added the topics of the 5 S’s and Seven Wastes. A new videocase study is JIT at Arnold Palmer Hospital.

Chapter 17: Maintenance and Reliability. A new Global Company Profile for this chapter isOrlando Utilities Commission, ranked the number 1 electric distribution system in the Southeast U.S.

Quantitative Module A: Decision-Making Tools. There is a new section on using decisiontrees in ethical decision making, including an example of doing so (Example 8). There is also a new4-dot, challenging, homework problem added.

Quantitative Module B: Linear Programming. Excel’s Solver is described in detail, as a toolfor solving LP problems and a challenging 4-dot homework problem has been added.

Quantitative Module C:Transportation Models. There is now a 4-dot problem in the home-work set.

Quantitative Module D:Waiting Line Models. The New England Foundry case is a newerversion of the New England Castings case that we wrote many years ago, and we have added a newhomework problem and a 4-dot problem.

Quantitative Module E: Learning Curves. No changes.

Quantitative Module F: Simulation. We have expanded our section on Using ExcelSpreadsheets that shows students how to create their own formulas, and we have added a new 4-dot(challenging) homework problem.

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CD-ROM Tutorials Five mini chapters from the previous edition are unchanged. The tutorialsare: Tutorial 1, Statistical Tools for Managers; Tutorial 2, Acceptance Sampling; Tutorial 3, TheSimplex Method of Linear Programming; Tutorial 4, The MODI and VAM Methods of SolvingTransportation Problems; Tutorial 5, Vehicle Routing and Scheduling.

TRADEMARK FEATURESOur goal is to provide students with the finest pedagogical devices to help enhance learning andteaching.

� Balance between services and manufacturing. Both service and manufacturing exam-ples are critical in an Operations Management course. We carefully blend the two togetherthroughout the text. To emphasize each, we follow two manufacturing organizations, arestaurant chain, a hospital, and a university: Regal Marine (3 video cases and a GlobalCompany Profile in Chapter 5); Wheeled Coach (4 video cases and a Global CompanyProfile in Chapter 14); Hard Rock Cafe (7 video cases and a Global Company Profile inChapter 1); Arnold Palmer Hospital (7 video cases and a Global Company Profile inChapter 6); Southwestern University (7 integrated case studies of issues facing this fic-tional college). In addition, we provide hundreds of other examples of service and manu-facturing companies throughout the text, examples, and homework problems.

� Worked Out Examples. Step-by-step worked out examples of OM problems areextremely helpful in an analytical course such as this. The chapters contain 141 exampleswhich are reinforced by 66 end-of-chapter Solved Problems. Further, the student CD andtext web site each contain over a hundred Practice Problems.

� Superb Homework Problems. As the leading OM text, we take pride in having the leadinghomework problem set. The 597 problems in the text are coded on a 1, 2, 3, or 4 dot diffi-culty level. These are supplemented by 166 more homework problems on the book’s website. Solutions to all of these are in the Instructor’s Solution Manual, written by the authors.

� Global Company Profiles Each chapter opens with a two-page, full-color analysis of aleading global organization. These include Amazon, Volkswagen, Dell, Arnold PalmerHospital, Delta Airlines, McDonald’s, Boeing, and many more.

X X V I I I PR E FAC E

Boeing’s strategy for its 787Dreamliner is unique from both an engi-neering and global perspective.

The Dreamliner incorporates the lat-est in a wide range of aerospace tech-nologies, from airframe and enginedesign to superlightweight titaniumgraphite laminate, carbon fiber andepoxy, and composites. Another innova-tion is the electronic monitoring systemthat allows the airplane to report mainte-nance requirements to ground-basedcomputer systems. Boeing is also work-ing with General Electric and Rolls-Royceto develop more efficient engines. Theexpected advances in engine technologywill contribute as much as 8% of theincreased fuel/payload efficiency of thenew airplane, representing a nearly two-generation jump in technology.

This state-of-the-art Boeing 787 is also global. Led by Boeing at its Everett,Washington, facility, an international teamof aerospace companies developed theairplane. New technologies, new design,

Boeing’s Global Strategy Yields Competitive Advantage

G L O B A L C O M P A N Y P R O F I L E :

With the 787’s state-of the-art design, more spacious interior, and global suppliers, Boeing is

garnering sales worldwide.

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� OM in Action Boxes Fifty-eight half-page examples of recent OM practices are drawnfrom a wide variety of sources, including The Wall Street Journal, New York Times,Fortune, Forbes, and Harvard Business Review. These boxes bring OM to life.

Outsourcing Not to India, but toRemote Corners of the U.S.

U.S. companies continue their global search for effi-ciency by outsourcing call centers and back-officeoperations, but many find they need to look no fartherthan a place like Nacogdoches, Texas.

To U.S. firms facing quality problems with their out-sourcing operations in India and bad publicity at home,small-town America is emerging as a pleasant alterna-tive. Nacogdoches (population 29,914) or Twin Falls,Idaho (population 34,469), may be the perfect call-center locations. Even though the pay is only $7.00 anhour, the jobs are some of the best available to small-town residents.

By moving out of big cities to the cheaper labor andreal estate of small towns, companies can save millions

and still increase productivity. A call center in a townthat just lost its major manufacturing plant finds the jobseasy to fill. U.S. Bank just picked Coeur d'Alene, Idaho, forits credit card call center. The city “has pretty seriousunemployment,” says VP Scott Hansen. “We can go inwith 500 jobs and really make a difference in the com-munity.”

Dell just opened its corporate-customer call center inTwin Falls after closing a similar center in India, followingcustomer complaints. Lehman Brothers likewise just can-celed its outsourcing contract to India. But taking advan-tage of dirt-cheap wages will not stop soon. IBM boughtDaksh eServices Ltd., a 9,000-employee Indian call-center firm for $170 million.

Sources: The Wall Street Journal (June 9, 2004): B1, B8, and (June 14,2001): A1; Risk Management (July 2004): 24-29; and Business Week (April26, 2004): 56.

O M I N A C T I O N

ACTIVE MODEL 3.1 �

Project Management

ACTIVE MODEL EXERCISE

Milwaukee Paper Manufacturing. This Active Model allows you to evaluate changes in important elements onthe hospital network we saw in this chapter, using your CD-ROM. See Active Model 3.1.

Other student resources include Marginal Notes and Definitions and Solutions to Even-Numbered Problems.

FREE STUDENT CD-ROM WITH EVERY NEW TEXTPackaged free with every new copy of the text is a student CD-ROM that contains excitingresources to liven up the course and help students learn the content material.

� Active Model Exercises Active Model Exercises are interactive Excel spreadsheets ofexamples in the textbook that allow the student to explore and better understand theseimportant quantitative concepts. Students and instructors can adjust inputs to the modeland, in effect, answer a whole series of “what if” questions that is provided (e.g., What ifone activity in a PERT network takes 3 days longer? Chapter 3. What if holding cost ordemand in an inventory model doubles? Chapter 12. What if the exponential smoothingconstant is 0.3 instead of 0.5? Chapter 4). These Active Models are great for classroompresentation and/or homework. Twenty-eight of these models are included on the studentCD-ROM and many are featured in the text.

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� PowerPoint Lecture Notes Based on an extensive set of over 1,000 newly revampedPowerPoint slides, these lecture notes provide reinforcement to the main points of eachchapter and allow students to review chapter material. All the Powerpoints have beenredrawn for clarity.

� Twenty-two Exciting Video Cases These video cases feature real companies (RegalMarine, Hard Rock Cafe, Ritz Carlton, Wheeled Coach, and Arnold Palmer Hospital) andallow students to watch short video clips, read about the key topics, answer questions, andthen e-mail their answers to their instructors. These case studies can also be assigned with-out using class time to show the videos. Each of these was developed and written by thetext authors to specifically supplement the book’s content.

� CD-ROM Video Clips Another expanded feature on the student CD-ROM is thirty-four 1- to 2-minute videos, which appear throughout the book and are noted in the margins.These video clips illustrate chapter-related topics with videos at Harley-Davidson, RitzCarlton, Hard Rock Cafe, and other firms.

� Active Models The 28 Active Models, described earlier, appear in files on the student CD-ROM. Samples of the Models appear in most text chapters.

� Practice Problems Provide problem-solving experience. They supplement the examplesand solved problems found in each chapter.

� Self-Study Quizzes For each chapter, a link is provided to our text’s Companion Web site,where these quizzes allow students to test their understanding of each topic. Plant tours canalso be accessed through this link.

� POM for Windows Software POM for Windows is a powerful tool for easily solving OMproblems. Its 24 modules can be used to solve most of the homework problems in the text.

� Problem-Solving Software Excel OM is our exclusive user-friendly Excel add-in. ExcelOM automatically creates worksheets to model and solve problems. Users select a topicfrom the pull-down menu, fill in the data, and then Excel will display and graph (whereappropriate) the results. This software is great for student homework, “what if” analysis, orclassroom demonstrations.

Enter the size for each of thehourly samples taken.

Enter the desirednumber of standarddeviations.

Use the overall average as the center line; add and subtract thedesired number of standard deviations in order to create upperand lower control limits (e.g., LCL = F10 – F11*F12).

= B22

= B7/SQRT(B6)

Do not change this cell without changingthe number of rows in the data table.

Enter the meanweight for eachof the 12samples.

Calculate x bar – the overall average weightof all the samples = AVERAGE (B10:B21).

PROGRAM S6.2 � Excel OM Input and Selected Formulas for the Oat Flakes Example S1

� Excel OM Data Files Examples in the text that can be solved with Excel OM appear ondata files on the CD-ROM. They are identified by an icon in the margin of the text.

� CD-ROM Tutorial Chapters Statistical Tools for Managers, Acceptance Sampling, TheSimplex Method of Linear Programming, The MODI and VAM Methods of SolvingTransportation Problems, and Vehicle Routing and Scheduling are provided as additionalmaterial.

� Microsoft Project 2003 MSProject, the most popular and powerful project managementpackage, is now available on a second (free Value-Pack) student CD-ROM. This version isdocumented in Chapter 3 and is activated to work for 120 days.

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INSTRUCTOR’S RESOURCESTest Item File The test item file, extensively updated by Professor L. Wayne Shell, contains avariety of true/false, multiple choice, fill-in-the-blank, short answer, and problem-solving ques-tions for each chapter. The test item file can also be downloaded by instructors from PrenticeHall’s Companion Web site at http://www.prenhall.com/heizer.

New TestGen Software The print Test Banks are designed for use with the TestGen test-gen-erating software. This computerized package allows instructors to custom design, save, and gen-erate classroom tests. The test program permits instructors to edit, add, or delete questions fromthe test banks; edit existing graphics and create new graphics; analyze test results; and organize adatabase of tests and student results. This new software allows for greater flexibility and ease ofuse. It provides many options for organizing and displaying tests, along with a search and sortfeature.

Instructor’s Solutions Manual The Instructor’s Solutions Manual, written by the authors,contains the answers to all of the discussion questions, ethical dilemmas, active models, andcases in the text, as well as worked-out solutions to all of the end-of-chapter problems, internetproblems, and internet cases. The Instructor’s Solutions Manual can also be downloaded byinstructors from Prentice Hall’s Companion Web site at http://www.prenhall.com/heizer.

PowerPoint Presentations An extensive new set of PowerPoint presentations, created byProfessor Jeff Heyl of Lincoln University, is available for each chapter. Comprising well over 2,000slides, Professor Heyl has created this new set with excellent color and clarity. We have alsoincluded hundreds of Personal Response System slides, created by Professor Bill Swart of EastCarolina University, enabling interactive exercises and discussion. These slides can also be down-loaded from Prentice Hall’s Companion Web site at http://www.prenhall.com/heizer.

Instructor’s Resource Manual The Instructor’s Resource Manual, updated by Professor JeffHeyl, contains many useful resources for the instructor—course outlines, video notes, Internetexercises, additional teaching resources, and faculty notes. The Instructor’s Resource Manualcan also be downloaded by instructors from Prentice Hall’s Companion Web site athttp://www.prenhall.com/heizer.

Instructor’s Resource CD-ROM The Instructor’s Resource CD-ROM provides the electronicfiles for the entire Instructor’s Solutions Manual (in MS Word), PowerPoint presentations (inPowerPoint), Test Item File (in MS Word), and computerized test bank (TestGen). These files canalso be downloaded off the Instructor Catalog page.

Video Package Designed specifically for the Heizer/Render texts, the video package contains thefollowing 32 videos:

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• Operations Management at Hard Rock (Ch. 1)

• A Plant Tour of Winnebago Industries (Ch. 1)

• Regal Marine: Operations Strategy (Ch. 2)

• Hard Rock Cafe’s Global Strategy (Ch. 2)• Overview of OM and Strategy at

Whirlpool (Ch. 2)• Project Management at Arnold Palmer

Hospital (Ch. 3)• Managing Hard Rock’s Rockfest (Ch. 3)• Forecasting at Hard Rock Cafe (Ch. 4)• Regal Marine: Product Design (Ch. 5)• Product Design and Supplier

Partnerships at Motorola (Ch. 5)• The Culture of Quality at Arnold Palmer

Hospital (Ch. 6)

• Ritz Carlton: Quality (Ch. 6)• Competitiveness and Continuous

Improvement at Xerox (Ch. 6)• Service Quality and Design at Marriott

(Ch. 6)• Statistical Process Control at Kurt

Manufacturing (Supp. 6)• Wheeled Coach: Process Strategy (Ch. 7)• Process Analysis at Arnold Palmer

Hospital (Ch. 7)• Process Strategy and Selection (Ch. 7)• Technology and Manufacturing: Flexible

Manufacturing Systems (Ch. 7)• Capacity Planning at Arnold Palmer

Hospital (Supp. 7)• Where to Place Hard Rock’s Next Cafe

(Ch. 8)• Wheeled Coach: Facility Layout (Ch. 9)

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Shahid AliRockhurst University

Stephen AllenTruman State University

William BarnesEmporia State University

Leon BazilStevens Institute of Technology

Victor BerardiKent State University

Mark BerensonMontclair State University

Joe BiggsCalifornia Polytechnic State University

Peter BillingtonColorado State University-Pueblo

Lesley BuehlerOhlone College

Darlene BurkWestern Michigan University

David CaddenQuinnipiac College

James CampbellUniversity of Missouri-St. Louis

• Laying Out Arnold Palmer Hospital’s NewFacility (Ch. 9)

• Hard Rock Cafe’s Human ResourceStrategy (Ch. 10)

• Teams and Employee Involvement atHewlett Packard (Ch. 10)

• Regal Marine: Supply Chain Management(Ch. 11)

• Arnold Palmer Hospital’s Supply Chain (Ch. 11)

• E-Commerce and Teva Sports Sandals (Supp. 11)

• Wheeled Coach: Inventory Control(Ch. 12)

• Wheeled Coach: Materials RequirementsPlanning (Ch. 14)

• Scheduling at Hard Rock Cafe (Ch. 15)• JIT at Arnold Palmer Hospital (Ch. 16)

X X X I I PR E FAC E

COMPANION WEB SITEVisit our Companion Web site at www.prenhall.com/heizer, to find text-specific resources for students and faculty. Some of the resources you will find include:

For Students:Self-Study Quizzes These extensive quizzes contain a broad assortment of questions, 20–25per chapter, which include multiple choice, true or false, and Internet essay questions. The quizquestions are graded and can be transmitted to the instructor for extra credit or serve as practiceexams.

Virtual Tours These company tours provide direct links to companies ranging from a hospital toan auto manufacturer, that practice key concepts. After touring each Web site, students are askedquestions directly related to the concepts discussed in the chapter.

Internet Homework Problems A set of homework problems are available on the CompanionWeb site to provide additional assignment material for students.

Internet Case Studies Assign additional free case study material from this web site.

For Faculty:Instructor support materials can be downloaded from the Prentice Hall online catalog atwww.prenhall.com. This password-protected area provides faculty with the most current andadvanced support materials available: Instructor’s Solutions Manual, Instructor’s Resource Manual,PowerPoint slides, Personal Response System slides, and Test Questions.

ACKNOWLEDGMENTSWe thank the many individuals who were kind enough to assist us in this endeavor. The followingprofessors provided insights that guided us in this revision:

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William ChristensenDixie State College of Utah

Roy ClintonUniversity of Louisiana at Monroe

Hugh DanielLipscomb University

Anne DeidrichWarner Pacific College

John DrabouskiDeVry University

Richard E. DulskiDaemen College

Charles EnglehardtSalem International University

Wade FergusonWestern Kentucky University

Rita GibsonEmbry-Riddle Aeronautical University

Eugene HahnSalisbury University

John HoftColumbus State University

Garland HunnicuttTexas State University

Wooseung JangUniversity of Missouri-Columbia

Dana JohnsonMichigan Technological University

William KimeUniversity of New Mexico

Beate KlingenbergMarist College

Jean Pierre KuilboerUniversity of Massachusetts-Boston

Gregg LattierLee College

Ronald LauHong Kong University of Science and Technology

Mary MarrsUniversity of Missouri-Columbia

Richard MartinCalifornia State University-Long Beach

Gordon MillerPortland State University

John MillerMercer University

Donna MosierSUNY Potsdam

Arunachalam NarayananTexas A&M University

Susan NormanNorthern Arizona University

Prafulla OglekarLaSalle University

PR E FAC E X X X I I I

David PenticoDuquesne University

Elizabeth PerrySUNY Binghamton

Frank PiankiAnderson University

Michael PlumbTidewater Community College

Leonard PresbyWilliam Paterson University

Zinovy RadovilskyCalifornia State University, Hayward

William ReiselSt. John’s University

Spyros ReveliotisGeorgia Institute of Technology

Scott RobertsNorthern Arizona University

Stanford RosenbergLaRoche College

Edward RosenthalTemple University

Peter RourkeWentworth Institute of Technology

X. M. SaffordMilwaukee Area Technical College

Robert SchlesingerSan Diego State University

Daniel ShimshakUniversity of Massachusetts-Boston

Theresa A. ShotwellFlorida A&M University

Ernest SilverCurry College

Samuel Y. Smith Jr.University of Baltimore

Victor SowerSan Houston State University

John StecOregon Institute of Technology

A. Lawrence SummersUniversity of Missouri

Rajendra TibrewalaNew York Institute of Technology

Ray WaltersFayetteville Technical Community College

Jianghua WuPurdue University

Lifang WuUniversity of Iowa

Xin ZhaiPurdue University

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X X X I V PR E FAC E

We also wish to acknowledge the help of the reviewers of the earlier editions of this text. Withoutthe help of these fellow professors, we would never have received the feedback needed to puttogether a teachable text. The reviewers are listed in alphabetical order.

Sema AlptekinUniversity of Missouri-Rolla

Suad AlwanChicago State University

Jean-Pierre AmorUniversity of San Diego

Moshen AttaranCalifornia State University-Bakersfield

Ali BehnezhadCalifornia State University-Northridge

John H. BlackstoneUniversity of Georgia

Theodore BorekiHofstra University

Rick CarlsonMetropolitan State University

Wen-Chyuan ChiangUniversity of Tulsa

Mark CoffinEastern California University

Henry CrouchPittsburgh State University

Warren W. FisherStephen F. Austin State University

Larry A. FlickNorwalk Community Technical College

Barbara FlynnWake Forest University

Damodar GolharWestern Michigan University

Jim GoodwinUniversity of Richmond

James R. GrossUniversity of Wisconsin-Oshkosh

Donald HammondUniversity of South Florida

John HarpellWest Virginia University

Marilyn K. HartUniversity of Wisconsin-Oshkosh

James S. HawkesUniversity of Charleston

George HeinrichWichita State University

Sue HelmsWichita State University

Johnny HoColumbus State University

Zialu HugUniversity of Nebraska-Omaha

Peter IttigUniversity of Massachussetts

Paul JordanUniversity of Alaska

Larry LaForgeClemson University

Hugh LeachWashburn University

B.P. LingerajIndiana University

Andy LitteralUniversity of Richmond

Laurie E. MacdonaldBryant College

Henry S. Maddux IIISam Houston State University

Mike MaggardNortheastern University

Mark McKayUniversity of Washington

Arthur C. Meiners, Jr.Marymount University

Zafar MalikGovernors State University

Doug MoodieMichigan Tech University

Philip F. MusaUniversity of Alabama at Birmingham

Joao NevesTrenton State College

John NicolayUniversity of Minnesota

Susan K. NormanNorthern Arizona University

Niranjan PatiUniversity of Wisconsin-LaCrosse

Michael PeschSt. Cloud State University

David W. PenticoDuquesne University

Leonard PresbyWilliam Patterson State College-NJ

Zinovy RadovilskyCalifornia State University-Hayward

Ranga V. RamaseshTexas Christian University

Emma Jane RiddleWinthrop University

M.J. RileyKansas State University

Narendrea K. RustagiHoward University

Teresita S. SalinasWashburn University

HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page xxxiv

Chris SandvigWestern Washington University

Ronald K. SatterfieldUniversity of South Florida

Robert J. SchlesingerSan Diego State University

Shane J. SchvaneveldtWeber State University

Avanti P. SethiWichita State University

Girish ShambuCanisius Callege

L.Wayne Shell (retired)Nicholls State University

Susan ShererLehigh University

Vicki L. Smith-DanielsArizona State University

Vic SowerSam Houston State University

Stan StocktonIndiana University

PR E FAC E X X X V

John SwearingenBryant College

Susan SweeneyProvidence College

Kambiz TabibzadehEastern Kentucky University

Rao J. TaikondaUniversity of Wisconsin-Oshkosh

Cecelia TemponiTexas State University

Madeline ThimmesUtah State University

Doug TurnerAuburn University

V. UdayabhanuSan Francisco State University

John Visich-DiscUniversity of Houston

Rick WingSan Francisco State University

Bruce M. WoodworthUniversity of Texas-El Paso

In addition, we appreciate the wonderful people at Prentice Hall who provided both help andadvice: Mark Pfaltzgraff, our decision sciences executive editor; Debbie Clare, our executive mar-keting manager; Jane Avery, our senior editorial assistant; Nancy Welcher, our media project devel-opment manager; Cynthia Regan, our senior managing editor; and Karen Misler, our supplementseditor. Reva Shader developed the exemplary subject indexes for this text. Donna Render and KayHeizer provided the accurate typing and proofing so critical in a rigorous textbook. We are trulyblessed to have such a fantastic team of experts directing, guiding, and assisting us.

We also appreciate the efforts of colleagues who have helped to shape the entire learning pack-age that accompanies this text. Professor L. Wayne Shell helped create our new problem set andedited/checked the old one, Professor Howard Weiss (Temple University) developed the ActiveModels, Excel OM, and POM for Windows microcomputer software; Professor Jeff Heyl (LincolnUniversity) created the PowerPoints and also wrote the Instructor’s Resource Manual; Dr. VijayGupta developed the Excel OM and POM for Windows Data Disks; Professor. L. Wayne Shell pre-pared the Test Bank; Beverly Amer (Northern Arizona University) produced and directed our videoand CD-ROM case series; Professors Keith Willoughby (Bucknell University) and Ken Klassen(Brock University) contributed the two Excel-based simulation games; Prof. Gary LaPoint(Syracuse University) developed the MS Project Crashing exercise; and the dice game for SPC; andProfessor Bill Swart (East Carolina University) created the Personal Response System PowerPointactivities. We have been fortunate to have been able to work with all these people.

We wish you a pleasant and productive introduction to operations management.

BARRY RENDER

GRADUATE SCHOOL OF BUSINESS

ROLLINS COLLEGE

WINTER PARK, FL 32789EMAIL: BARRY.RENDER@ROLLINS.EDU

JAY HEIZER

TEXAS LUTHERAN UNIVERSITY

1000 W. COURT STREET

SEGUIN, TX 78155EMAIL: JHEIZER@TLU.EDU

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