PRODUCTION

AND OPERATIONS
MANAGEMENT
A Life Cyde Approadi
Richard B. Chase
University of Soutiiern California
Nicholas J. Aquilano
University of Arizona
.
GIFT OF
THE ASIA FOUNDATION
NOT FOR RE-SALE
Fifth Edition
1989
OAI HOC QU6'C GIA HA N O
T R UN GT A N UH^ ^
IRWIN
Ho me wood, IL 60430
Boston. MA 02116
s
Contents
SECTION I
THE NATURE AND CONTEXT OF OPERATIONS
MANAGEMENT 2
Chapter 1
Introduction and Overview 4
Specific Objectives of the Book.
Operations Management Defined.
The Operations Function and Its Environment.
Operations Objectives.
Production Systems.
The Life Cycle Approach.
Operations Management and Other Business Specialties.
Historical Development of OM.
Conclusion: Current Issues in Operations Management.
Chapter 2
Productivity and Competitiveness 26
Competitiveness Defined.
Productivity Measurement and Trends.
General Causes and Solutions to the Competitiveness Problem.
Productivity and Competitiveness.
Competitive Priorities,
Manufacturing's Role in Corporate Strategy.
Case: Splash-N-Wipe Manufacturing.
SECTION II
PRODUCT DESIGN AND PROCESS SELECTION 46
Chapter 3
Product Design and Process SelectionManufacturing 48
Product Design and Development Sequence.
Product Design and Selection.
Process Selection.
Automation.
Process Flow Design.
Case: The W. C. Adams Company.
XI
Xfi Contents
Supplement
Computer-Integrated Manufacturing 75
Computer-Integrated Manufacturing.
Benefits of CIM.
Examples of CIM.
Reading: MAP Pilot Pays Off for Lockheed.
Chapter 4
Product Design and Process SelectionServices 92
The Nature and Importance of Services.
An Operational Classification of Services.
A Systems View of High-Contact Services.
Service-System Design Matrix.
Service Blueprinting.
Identifying Sales Opportunities.
Three System Design Options.
Case: Kinko's Copier Stores.
Tutorial 1
Waiting Line Theory 120
Economics of the Waiting Line Problem.
Waiting Line Characteristics.
Seven Typical Waiting Line Situations.
Computer Simulation of Waiting Lines.
Chapter 5
Design of the Quality Control System 162
Organization and Role of the Quality Control Function.
Meaning and Measurement of Quality.
Cost of Quality.
Statistical Quality Control (SQC).
Acceptance Sampling.
Process Control Procedures.
Taguchi Methods.
Personnel Considerations.
Quality Measurement in Service Industries.
Reading: Making Quality Control Theories Workable.
SECTION III
DESIGN OF FACILITIES AND JOBS 212
Chapter 6
Forecasting 214
Demand Management.
Types of Forecasting.
Contents xiii
Components of Demand.
Casual Relationships.
Time Series Analysis.
Forecast Errors.
Focus Forecasting.
Computer Programs.
Chapter 7
Capacitv Planning and Location 270
Importance of Capacity Decisions.
Important Capacity Concepts.
Capacity Planning.
Facility Location.
Locating Service FaciHties.
Case: Community Hospital.
Case: Zepf Technologies Inc. (B).
Tutorial 2
Linear Programming 308
The Linear Programming Model.
Graphical Linear Programming.
The Simplex Method.
Transportation Method.
Assignment Method.
Karmarkar's Algorithm for Solving Linear Programming Problems.
General Algebraic ModeHng System (GAMS).
Chapter 8
Facility Layout 356
Basic Layout Formats.
Process Layout.
Product Layout.
Assembly Lines.
Assembly Line Balancing.
Mixed-Model Line Balancing.
The Contemporary Approach to Lines.
Group Technology (Cellular) Layout.
Tutorial 3
Simulation 386
Definition of Simulation.
Simulation Methodology.
Computerization of the Fish Market Example.
Simulating Waiting Lines.
Simulation Programs and Languages.
Advantages and Disadvantages of Simulation.
xfv OofKcnts
Chapter 9
Job Design and Work Measurement 42^
Job Design.
Behavioral Considerations in lob Desit^n.
Physical Considerations in Job Design.
Methods, Measurement, and Payment.
SECTION IV
STARTUP OF THE SYSTEM 470
Chapter 10
Project Planning and Control 472
Definition of Project Management.
Organizational Forms.
Project Control.
Critical Path Scheduling.
Time-Oriented Techniques.
Time-Cost Models.
Computer Programs for Project Scheduling.
Criticisms of PERT and CPM.
Tutorial 4
Experience Curves 514
Predicting Startup Progress: Experience Curves.
Simple Exponential Curve.
Time-Constant Learning Curve Model.
SECTION V
THE SYSTEM IN STEADY STATE 542
Chapter 11
Aggregate Planning 544
Overview of Manufacturing Planning Activities.
Hierarchical Production Planning.
Aggregate Production Planning.
Aggregate Planning Techniques.
Chapter 12
Inventory Systems for Independent Demand 576
Independent versus Dependent Demand.
Definition of Inventory.
Purpose of Inventory.
Inventory Costs.
Inventory Systems.
Contents xv
Basic Model Types.
A Major Problem: Determining ReaHstic Costs.
Chapter 13
Inventory Systems for Dependent Demand:
Materials Requirements Planning
A Simple MRP Example. ^^^
Material Requirements Planning (MRP) Systems.
Material Requirements Planning Systems Structure.
An Example Using MRP.
MRP in Services.
Capacity Requirements Planning.
Manufacturing Resource Planning (MRP II).
Miscellaneous MRP Issues.
Instalhng an MRP System.
Case: Nichols Company.
Chapter 14
Operations Planning and Control 672
Job Shop Defined.
Scheduling and Control in the Job Shop.
Elements of the Job-Shop Scheduling Problem.
Priority Rules and Techniques.
Shop-Floor Control.
Example of a Total System: H. P.'s Production Management/3000.
Personnel Scheduling in Services.
Case: McCall Diesel Motor Works.
Chapter 15
Materials Management and Purchasing "02
Overview of the Materials-Flow Process.
Organizational Placement of Materials Management.
Purchasing.
Materials Management and Manufacturing.
Marketing and Distribution.
Case: Thomas Manufacturing Company.
Case: Ohio Tool Company.
SECTION VI 732
IMPROVING THE SYSTEM
Chapter 16 734
lust-in-Time Production Systems
The Japanese Approach to Productivity
How to Accomplish JIT Production.
KV^ Oot^eaa
Some Technical Issues about Kanban.
Company Experiences with JIT.
Case: XYZ Products Company.
Case: McCall Diesel Motor Works Revisited.
Supplement
JIT for Services 774
JIT: Not Just for the Factory.
Midway Airlines Problem-Solving Groups Apply Analytical Tools to
Departure Delays.
Japanese Management and the 100 Yen Sushi House.
Chapter 17
Synchronized Manufacturing 790
Hockey-Stick Phenomenon.
Goal of the Firm.
Performance Measurements.
Attempts to Balance Capacity.
Bottlenecks, Nonbottlenecks, and Capacity-Constrained Resources.
Basic Manufacturing Building Blocks.
Comparing Synchronized Manufacturing to MRP and JIT.
Methods for Control in Synchronized Manufacturing.
VAT Classification of Firms.
Relationship with Other Functional Areas.
Estabhshing a Process of Ongoing Improvement.
Chapter 18
Revising Operations Strategy 840
Manufacturing's Role in Corporate Strategy.
Developing and Implementing a Manufacturing Strategy.
Operations Strategy in Services.
The Service Factory.
Case: Memphis Toy Company.
Case: Big Jim's Gym.
APPENDIXES 869
A: Financial Analysis in Production and Operations
Management 870
B: Uniforrnly Distributed Random Digits 890
C: Normally Distributed Random Digits 891
D: Areas of the Standard Normal Distribudon 892
E: Areas of the Cumulative Standard Normal Distribudon 893
F: Negadve Exponential Distribudon: Values of e"^ 899
G: Cumulative Poisson Disinbution 901
H- !ntrft Tables 907
! Answers to Selected Problems 913
QIC
T H E MC G R A W- H I L L / I R WI N SER?
Operations and Decision Sciences
OPERATIONS MANAGEMENT
Bowersox and Closs
Logistical Management: The Integrated Supply Chain Process
First Edition
Chase, Aquilano, and Jacobs
Operations Management tor Competitive Advantage
Ninth Edition
Chu, Hottenstein, and Greenlaw
PROSIM for Windows
Third Edition
Cohen and Apte
Manufacturing Automation
First Edition
Davis, Aquilano, and Chase
Fundamentals of Operations Management
Third Edition
Dobler and Burt
Purchasing and Supply Management
Sixth Edition
Flaherty
Global Operations Management i
First Edition
Fitzsimmons and Fitzsimmons
Service Management: Operations, Strategy, Information Technology
Third Edition
Gray and Larson
Project Management: The Managerial Process
First Edition
Hill
Manufacturing Strategy: Text & Cases
Third Edition ,
Hopp and Spearman
Factory Physics
Second Edition
Jacobs and Whybark
Why ERP: A Primer on SAP Implementaion
First Edition
Lambert and Stock
Strategic Logistics Management
Third Edition
Leenders and Fearon
Purchasing and Supply Chain Management
Eleventh Edition
Moses, Seshadri, and Yakir
HOM Operations Management Software for Windows
First Edition
Nahmias
Production and Opeiotions Analysis
Fourth Edition
Nicholas
Competitive Manufacturing Management
First Edition
Olson
Introduction to Information Systems Project Ma-
First Edition
Pinedo and Chao
Operations Scheduling
First Edition
Sanderson and IJ/umeri
Managing Product Families
First Edition
Schroeder
Operations Management: Contemporary Concepts and Cases
First Edition
Schonberger and Knod
Operations Management
Seventh Edition
Simchi-Levi, Kaminsky, and Simchi-Levi
Designing and Managing the Supply Chain: Concepts, Strategies,
and Case Studies
First Edition
Sterman
Business Dynamics: Systems Thmknig and Modeling for a Complex World
First Edition
Stevenson
Production/Operations Management
Sixth Edition
Vollmann, Berry, and Whybark
Manufacturing Planning & Control Systems
Fourth Edition
Zipkin
Foundations of Inventory Management
First Edition
QUANTITATIVE METHODS AND MANAGEMENT SCIENCE
Alwan
Statistical Process Analysis
First Edition
Bodily, Carraway, Frey, Pfeifer
Quantitative Business Analysis: Casebook
First Edition
Bodily, Carraway, Frey, Pfeifer
Quantitative Business Analysis: Text and Cases
I It St Edition
Bonini, Hausman, and Bierman
Quantitative Analysis for Business Decisions
Ninth Edition
Hesse
Managerial Spreadsheet Modeling and Analysis
First Edition
Hillier, Hillier, Liebemian
Intrt)duction to Management Science: A Modeling and Case Studies
Approach with Spreadsheets
First Edition
C O N T E N T S I N B R I E F
S E C T I O N O N E
OPERATIONS STRATEGY AND MANAGI NG
CHANGE
1 I nt r oduct i on t o t he Fi el d 4
2 Oper at i ons Strategy and
Compet i t i veness 22
Technical Note 2 Learning Curves 40
3 Proj ect Managennent 56
S E C T I O N T w o
PRODUCT DESIGN AND PROCESS SELECTION
4 Process Anal ysi s 90
Technical Note 4 Job Design and Work
Measurement 113
5 Product Design and Process
Sel ect i on Manuf act ur i ng 142
Technical Note 5 Facility Layout 174
6 Product Design and Process
Sel ect i onServi ces 206
Technical Note 6 Waiting Line Management
230
7 Qual i t y Managennent 258
Technical Note 7 Process Capability and
Statistical Quality Control 290
S E C T I O N T H R E E
SUPPLY CHAI N DESI GN
Managerial Briefing Electronic Commerce
and E-Ops" 316
8 Suppl y Chain Strategy 330
9 Strategi c Capaci t y Management 352
Technical Note 9 Facility Location 373
10 Just-i n-Ti me and Lean Systems 392
S E C T I O N F O U R
PLANNI NG AND CONTROLLI NG THE SUPPLY
CHAI N
Managerial Briefing Enterprise Resource
Planning Systems 420
11 F^-^--sting 432
'^~ Aggregate Piannsrig 460
"^3 I f uci i t L . oncroi -:
14 Mau. Requirerrients f-
15 v^,'peratior!S Sc?
Technical No'.
SE
REVISING J^C- SVS^
16 Oper at i ons Co-is
Reengi neeri ng 640
17 Synchronous Manuf act ur i ng a
Theor y of Const rai nt s 662
SUPPLEMENTS
A Linear Programmi ng wi t h t he Excel
Sol ver 694
B Fi nanci al Anal ysi s 703
C Oper at i ons Technol ogy 720
APPENDICES
A Answers t o Sel ect ed Problems 729
B Uni forml y Di stri buted Random Digits 734
C Normal l y Di st ri but ed Random Digits 735
D Areas of t he Standard Normal
Di st r i but i on 736
E
F
G
Areas of t he Cumul at i ve Standard
Nor mal Di st r i but i on 737
Negat i ve Exponenti a
Value of e~' 738
I nt erest Tables 739
1 Di st r i but i on:
PHOTO CREDITS 743
NAME INDEX 745
C i i D i c / " T l M r \ c v r7C: i