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HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page iii OPERATIONS MANAGEMENT Eighth Edition Jay Heizer Jesse H. Jones Professor of Business Administration Texas Lutheran University Barry Render Charles Harwood Professor of Operations Management Crummer Graduate School of Business Rollins College Upper Saddle River, New Jersey 07458

Library of Congress Cataloging-in-Publication Data Heizer, Jay H. Operations management / Jay Heizer, Barry Render. 8th ed. p. cm. ISBN 0-13-185755-X 1. Production management. I. Render, Barry. II. Title. TS155.H3726 2006 658.5 dc22 2005045918 AVP/Executive Editor: Mark Pfaltzgraff VP/Editorial Director: Jeff Shelstad Senior Sponsoring Editor: Alana Bradley Senior Editorial Assistant: Jane Avery Media Product Development Manager: Nancy Welcher AVP/Executive Marketing Manager: Debbie Clare Marketing Assistant: Joanna Sabella Senior Managing Editor (Production): Cynthia Regan Permissions Coordinator: Charles Morris Production Manager: Arnold Vila Design Director: Maria Lange Art Director: Janet Slowik Interior Design: Blair Brown/Judy Allan Cover Design: Karen Quigley Cover Photo: Jonathan Bailey Associates/Courtesy of Arnold Palmer Hospital Director, Image Resource Center: Melinda Reo Manager, Rights and Permissions: Zina Arabia Manager: Visual Research: Beth Brenzel Manager, Cover Visual Research & Permissions: Karen Sanatar Image Permission Coordinator: Carolyn Gauntt Photo Researcher: Rachel Lucas Manager, Print Production: Christy Mahon Composition/Illustration: GGS Book Services, Atlantic Highlands Full-Service Project Management: GGS Book Services, Atlantic Highlands Supplements Coordinator: Karen Misler Printer/Binder: Courier-Kendallville Typeface: 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 the U.S.A. and other countries. Screen shots and icons reprinted with permission from the Microsoft 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 Saddle River, New Jersey, 07458. Pearson Prentice Hall. All rights reserved. Printed in the United States of America. This publication is protected by Copyright and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information 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 plc Prentice Hall is a registered trademark of Pearson Education, Inc. Pearson Education LTD. Pearson Education Singapore, Pte. Ltd Pearson Education, Canada, Ltd Pearson Education Japan Pearson Education Australia PTY, Limited Pearson Education North Asia Ltd Pearson Educación de Mexico, S.A. de C.V. Pearson Education Malaysia, Pte. Ltd 1098754321 ISBN 0-13-185755-X

To Donna, Kira, and Janée, in honor of the women you have become. JH To my family BR

HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page vi 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 Lutheran University in Seguin, Texas. He received his B.B.A. and M.B.A. from the University of North Texas and his Ph.D. in Management and Statistics from Arizona State University (1969). He was previously a member of the faculty at the University of Memphis, the University of Oklahoma, Virginia Commonwealth University, and the University of Richmond. He has also held visiting positions at Boston University, George Mason University, the Czech Management Center, and the Otto-VonGuericka University Magdeburg. Dr. Heizer s industrial experience is extensive. He learned the practical side of operations management as a machinist apprentice at Foringer and Company, production planner for Westinghouse Airbrake, 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 organizations including Philip Morris, Firestone, Dixie Container Corporation, Columbia Industries, and Tenneco. He holds the CPIM certification from APICS the Association for Operations Management. Professor Heizer has co-authored five books and has published over thirty articles on a variety of management topics. His papers have appeared in the Academy of Management Journal, Journal of Purchasing, Personnel Psychology, Production & Inventory Control Management, APICS-The Performance Advantage, Journal of Management History, IIE Solutions and Engineering Management, among others. He has taught operations management courses in undergraduate, graduate, and executive programs.

Barry Render holds the Charles Harwood Endowed Professorship in Operations Management 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. in Operations Research and Ph.D. in Quantitative Analysis at the University of Cincinnati. He previously taught at George Washington University, University of New Orleans, Boston University, and George Mason University, where he held the GM Foundation Professorship in Decision Sciences and was Chair of the Decision Science Department. Dr. Render has also worked in the aerospace industry for General Electric, McDonnell Douglas, and NASA. Professor Render has co-authored ten textbooks with Prentice Hall, including Managerial Decision Modeling 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 9 th edition and is a leading text in that discipline in the U.S. and globally. His more than one hundred articles on a variety of management topics have appeared in Decision Sciences, Production and Operations Management, Interfaces, Information and Management, Journal of Management Information Systems, Socio-Economic Planning Sciences, 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 Fullbright Scholar. He was vice-president of the Decision Science Institute Southwest Region and served as Software Review Editor for Decision Line for 6 years. He has also served as Editor of the New York Times Operations Management special issues from 1996 to 2001. Finally, Professor Render has been actively involved in consulting for government agencies and for many corporations, including NASA, FBI, U.S. Navy, Fairfax County, Virginia, and C&P Telephone. He teaches operations management courses in Rollins College s MBA and Executive MBA programs. He has been named as that school s Professor of the Year, and was recently selected by Roosevelt University to receive the St. Claire Drake Award for Outstanding Scholarship.

Brief Contents PART ONE Introduction to Operations Management 1 1. Operations and Productivity 1 2. Operations Strategy in a Global Environment 25 3. Project Management 53 4. Forecasting 103 PAR T TWO Designing Operations 155 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 THREE Managing Operations 429 11. Supply-Chain Management 429 Supplement 11: E-Commerce and Operations Management 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 FOUR Quantitative Modules 673 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 Solving Transportation Problems T4-1 5. Vehicle Routing and Scheduling T5-1 ix

Contents About the Authors vi Preface xxi PART ONE Introduction to Operations Management 1 1. Operations and Productivity 1 Global Company Profile: Hard Rock Cafe 2 What Is Operations Management? 4 Organizing to Produce Goods and Services 4 Why Study OM? 4 What Operations Managers Do 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 Case Study: Hard Rock Cafe: Operations Management in Services 24 Additional Case Study 24 Bibliography 24 Internet Resources 24 2. Operations Strategy in a Global Environment 25 Global 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 Regal Marine 49 Video Case Study: Hard Rock Cafe s Global Strategy 49 Additional Case Studies 50 Bibliography 51 Internet Resources 51 3. Project Management 53 Global 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

XII C ONTENTS Calculating Slack Time and Identifying the Critical Path(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 MS Project 82 Summary 83 Key Terms 83 Using Software to Solve Project Management Problems 83 Solved Problems 84 Internet and Student CD-ROM Exercises 88 Discussion Questions 88 Ethical Dilemma 88 Active Model Exercise 89 Problems 90 Internet Homework Problems 97 Case Study: Southwestern University: (A) 97 Video Case Study: Project Management at Arnold Palmer Hospital 98 Video Case Study: Managing Hard Rock s Rockfest 99 Additional Case Studies 100 Bibliography 101 Internet Resources 101 4. Forecasting 103 Global 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 and Correlation 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 Internet and Student CD-ROM Exercises 140 Discussion Questions 140 Ethical Dilemma 141 Active Model Exercise 141 Problems 142 Internet Homework Problems 151 Case Study: Southwestern University: (B) 151 Case Study: Digital Cell Phone, Inc. 152 Video Case Study: Forecasting at Hard Rock Cafe 152 Additional Case Studies 153 Bibliography 153 Internet Resources 154 PAR T TWO Designing Operations 155 5. Design of Goods and Services 155 Global Company Profile: Regal Marine 156 Goods and Services Selection 158 Product Strategy Options Support Competitive Advantage 158 Product Life Cycles 159 Life Cycle and Strategy 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

C ONTENTS XIII 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 Problem 183 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: De Mar s Product Strategy 188 Video Case Study: Product Design at Regal Marine 188 Additional Case Studies 189 Bibliography 189 Internet Resources 189 6. Managing Quality 191 Global Company Profile: Arnold Palmer Hospital 192 Quality and Strategy 194 Defining Quality 194 Implications of Quality 195 Malcolm Baldrige National Quality Award 195 Cost of Quality (COQ) 196 Ethics and Quality Management 196 International Quality Standards 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 and Student CD-ROM Exercises 211 Discussion Questions 212 Ethical Dilemma 212 Active Model Exercise 212 Problems 213 Internet Homework Problems 215 Case Study: Southwestern University: (C) 215 Video Case Study: The Culture of Quality at Arnold Palmer Hospital 217 Video Case Study: Quality at the Ritz-Carlton Hotel Company 217 Additional Case Studies 218 Bibliography 218 Internet Resources 219 Supplement 6: Statistical Process Control 221 Statistical Process Control (SPC) 222 Control Charts for Variables 224 The Central Limit Theorem 225 Setting Mean Chart Limits ( x -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 (C p ) 235 Process Capability Index (C pk ) 236 Acceptance Sampling 237 Operating Characteristic Curve 237 Average Outgoing Quality 238 Summary 240 Key Terms 240 Using Software for SPC 240 Solved Problems 242 Internet and Student CD-ROM Exercises 243 Discussion Questions 243 Active Model Exercise 244 Problems 244 Internet Homework Problems 250 Case Study: Bayfield Mud Company 250 Case Study: Alabama Airlines On-Time Schedule 251 Additional Case Studies 252 Bibliography 252 Internet Resources 252 7. Process Strategy 253 Global 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

XIV C ONTENTS 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 Case Study: Rochester Manufacturing Corporation 282 Video Case Study: Process Analysis at Arnold Palmer Hospital 282 Video Case Study: Process Strategy at Wheeled Coach 283 Additional Case Studies 283 Bibliography 284 Internet Resources 284 Supplement 7: Capacity Planning 285 Capacity 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-Driven Investments 296 Investment, Variable Cost, and Cash Flow 296 Net Present Value 296 Summary 299 Key Terms 300 Using Software for Break-Even Analysis 300 Solved Problems 301 Internet and Student CD-ROM Exercises 302 Discussion Questions 302 Problems 302 Internet Homework Problems 306 Video Case Study: Capacity Planning at Arnold Palmer Hospital 307 Additional Case Studies 307 Bibliography 308 Internet Resources 308 8. Location Strategies 309 Global 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 to Solve Location Problems 326 Solved Problems 327 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 Next Cafe 336 Additional Case Studies 337 Bibliography 338 Internet Resources 338 9. Layout Strategy 339 Global 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

C ONTENTS XV Repetitive and Product-Oriented Layout 358 Assembly-Line Balancing 359 Summary 363 Key Terms 363 Using Software to Solve 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 Internet Homework Problems 376 Case Study: State Automobile License Renewals 376 Video Case Study: Laying Out Arnold Palmer Hospital s New Facility 377 Video Case Study: Facility Layout at Wheeled Coach 378 Additional Case Studies 379 Bibliography 379 Internet Resources 379 10. Human Resources and Job Design 381 Global 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 Problem 399 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 Case Study: The Fleet That Wanders 403 Video Case Study: Hard Rock s Human Resource Strategy 404 Additional Case Studies 405 Bibliography 405 Internet Resources 405 Supplement 10: Work Measurement 407 Labor Standards and Work Measurement 408 Historical Experience 409 Time Studies 409 Predetermined Time Standards 413 Work Sampling 415 Summary 418 Key Terms 418 Solved Problems 418 Internet and Student CD-ROM Exercises 420 Discussion Questions 420 Active Model Exercise 421 Problems 421 Internet Homework Problems 425 Case Study: Jackson Manufacturing Company 426 Additional Case Studies 426 Bibliography 426 Internet Resources 427 PART THREE Managing Operations 429 11. Supply-Chain Management 429 Global 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 and Student CD-ROM Exercises 451 Discussion Questions 452 Ethical Dilemma 452 Problems 452 Internet Homework Problem 453 Case Study: Dell s Supply Chain and the Impact of E-Commerce 453 Video Case Study: Arnold Palmer Hospital s Supply Chain 454 Video Case Study: Supply-Chain Management at Regal Marine 455 Additional Case Studies 456 Bibliography 456 Internet Resources 457 Supplement 11: E-Commerce and Operations Management 459 The Internet 460 Electronic Commerce 461 E-Commerce Definitions 462

XVI C ONTENTS 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 Student CD-ROM Exercises 469 Discussion Questions 469 Problems 469 Case Study: E-Commerce at Amazon.com 470 Additional Case Studies 471 Bibliography 471 Internet Resources 471 12. Inventory Management 473 Global 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 to Solve Inventory Problems 500 Solved Problems 501 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: Inventory Control at Wheeled Coach 512 Additional Case Studies 512 Bibliography 512 Internet Resources 513 13. Aggregate Planning 515 Global 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 for Aggregate 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 Studies 547 Bibliography 547 Internet Resources 547 14. Material Requirements Planning (MRP) and ERP 549 Global 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

C ONTENTS XVII 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 to Solve 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 Case Studies 585 Bibliography 586 Internet Resources 586 15. Short-Term Scheduling 587 Global 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 s Rule 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 Cyclical Scheduling 609 Summary 611 Key Terms 611 Using Software for Short-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 Additional Case Studies 624 Bibliography 624 Internet Resources 624 16. Just-in-Time and Lean Production Systems 625 Global 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 Problem 646 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 Iowa 649 Case Study: JIT After the Fire 650 Video Case Study: JIT at Arnold Palmer Hospital 650 Additional Case Studies 651 Bibliography 651 Internet Resources 652 17. Maintenance and Reliability 653 Global Company Profile: Orlando Utilities Commission 654 The Strategic Importance of Maintenance and Reliability 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

XVIII C ONTENTS Summary 664 Key Terms 665 Using Software to Solve Reliability Problems 665 Solved Problems 665 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 FOUR Quantitative Modules 673 A. Decision-Making Tools 673 The 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 for Decision Models 683 Solved Problems 683 Internet and Student CD-ROM Exercises 684 Discussion Questions 684 Problems 685 Internet Homework Problems 689 Case Study: Tom Tucker s Liver Transplant 689 Case Study: Ski Right Corp. 689 Additional Case Studies 690 Bibliography 690 B. Linear Programming 691 Requirements 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-Side Values 700 Changes in the Objective Function Coefficient 701 Solving Minimization Problems 701 Linear Programming Applications 703 Production-Mix Example 703 Diet Problem Example 704 Production Scheduling Example 705 Labor Scheduling Example 706 The Simplex Method of LP 708 Summary 708 Key Terms 708 Using Software to Solve LP Problems 708 Solved Problems 710 Internet and Student CD-ROM Exercises 712 Discussion Questions 712 Active Model Exercise 713 Problems 713 Internet Homework Problems 720 Case Study: Golding Landscaping and Plants, Inc. 720 Additional Case Studies 720 Bibliography 721 C. Transportation Models 723 Transportation 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 Solved Problems 734 Internet and Student CD-ROM Exercises 735 Discussion Questions 736 Problems 736 Internet Homework Problems 740 Case Study: Custom Vans, Inc. 740 Additional Case Studies 742 Bibliography 742 D. Waiting-Line Models 743 Characteristics 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 with Poisson 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 to Solve Queuing Problems 759 Solved Problems 760 Internet and Student CD-ROM Exercises 762 Discussion Questions 762 Active Model Exercise 763 Problems 763 Internet Homework Problems 767 Case Study: New England Foundry 767 Case Study: The Winter Park Hotel 768 Additional Case Study 768 Bibliography 769 Internet Resources 769

C ONTENTS XIX E. Learning Curves 771 Learning 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 for Learning Curves 778 Solved Problems 778 Internet and Student CD-ROM Exercises 779 Discussion Questions 779 Active Model Exercise 780 Problems 780 Internet Homework Problems 783 Case Study: SMT s Negotiation with IBM 783 Bibliography 784 Internet Resources 784 F. Simulation 785 What 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 in Simulation 795 Solved Problems 797 Internet and Student CD-ROM Exercises 798 Discussion Questions 798 Problems 799 Internet Homework Problems 805 Case Study: Alabama Airlines Call Center 806 Additional Case Studies 806 Bibliography 806 Appendices A1 Indices I1 Photo Credits C1 CD-ROM Tutorials 1. Statistical Tools for Managers T1-1 Discrete Probability Distributions T1-2 Expected Value of a Discrete Probability Distribution 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 Discussion Questions T1-7 Problems T1-7 Bibliography T1-8 2. Acceptance Sampling T2-1 Sampling Plans T2-2 Single Sampling T2-2 Double Sampling T2-2 Sequential Sampling T2-2 Operating Characteristic (OC) Curves T2-2 Producer s and Consumer s Risk T2-3 Average Outgoing Quality T2-5 Summary T2-6 Key Terms T2-6 Solved Problem T2-7 Discussion Questions T2-7 Problems T2-7 3. The Simplex Method of Linear Programming T3-1 Converting the Constraints to Equations T3-2 Setting Up the First Simplex Tableau T3-2 Simplex Solution Procedures T3-4 Summary of Simplex Steps for Maximization Problems T3-6 Artificial and Surplus Variables T3-7 Solving Minimization Problems T3-7 Summary T3-8 Key Terms T3-8 Solved Problem T3-8 Discussion Questions T3-8 Problems T3-9 4. The MODI and VAM Methods of Solving Transportation Problems T4-1 MODI Method T4-2 How to use the MODI Method T4-2 Solving the Arizona Plumbing Problem with MODI T4-2 Vogel s Approximation Method: Another Way to Find an Initial Solution T4-4 Discussion Questions T4-8 Problems T4-8 5. Vehicle Routing and Scheduling T5-1 Introduction T5-2 Service Delivery Example: Meals-for-ME T5-2 Objectives of Routing and Scheduling Problems T5-2 Characteristics of Routing and Scheduling Problems T5-3 Classifying Routing and Scheduling Problems T5-3 Solving Routing and Scheduling Problems T5-4 Routing Service Vehicles T5-5 The Traveling Salesman Problem T5-5 Multiple Traveling Salesman Problem T5-8 The Vehicle Routing Problem T5-9 Cluster First, Route Second Approach T5-10 Scheduling Service Vehicles T5-11 The Concurrent Scheduler Approach T5-13 Other Routing and Scheduling Problems T5-13 Summary T5-14 Key Terms T5-15 Discussion Questions T5-15 Problems T5-15 Case Study: Routing and Scheduling of Phlebotomists T5-17 Bibliography T5-17

HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page xxi Preface Welcome to your Operations Management (OM) course. In this book, we present a state-of-the-art view of the activities of the operations function. Operations is an exciting area of management that has a profound effect on the productivity of both manufacturing and services. Indeed, few activities have as much impact on the quality of our lives. The goal of this text is to present a broad introduction to the field of operations in a realistic, practical manner. Operations management includes a blend of topics from accounting, industrial engineering, management, management science, and statistics. Even if you are not planning on a career in the operations area, you will likely be interfacing with people who are. Therefore, having a solid understanding of the role of operations in an organization is of substantial benefit to you. This book will also help you understand how OM affects society and your life. Certainly, you will better understand what goes on behind the scenes when you buy a meal at Hard Rock Cafe, place an order through Amazon.com, buy a customized Dell 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, accounting, and MIS students will find the material both interesting and useful because we develop a fundamental working knowledge of the firm. Over 400,000 readers of our earlier editions seem to have endorsed this premise. THREE VERSIONS ARE AVAILABLE This text is available in the three versions: Operations Management, Eighth edition, which is hardcover, Principles of Operations Management, Sixth Edition, a paperback, and Operations Management, 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, Eighth Edition and the Flexible Edition also include six quantitative modules in Part IV. xxi

XXII P REFACE OPERATIONS MANAGEMENT, EIGHTH EDITION ISBN: 0-13-185755-X PART I INTRODUCTION 1. Operations and Productivity 2. Operations Strategy in a Global Environment 3. Project Management 4. Forecasting PART II DESIGNING OPERATIONS 5. Design of Goods and Services 6. Managing Quality S6. Statistical Process Control 7. Process Strategy S7. Capacity Planning 8. Location Strategies 9. Layout Strategy 10. Human Resources and Job Design S10. Work Measurement PART III MANAGING OPERATIONS 11. Supply-Chain Management S11. E-Commerce and Operations Management 12. Inventory Management 13. Aggregate Planning 14. Material Requirements Planning (MRP) and ERP 15. Short-Term Scheduling 16. Just-in-Time and Lean Production Systems 17. Maintenance and Reliability PART IV QUANTITATIVE MODULES A. Decision-Making Tools B. Linear Programming C. Transportation Models D. Waiting-Line Models E. Learning Curves F. Simulation PRINCIPLES OF OPERATIONS MANAGEMENT, SIXTH EDITION ISBN: 0-13-186512-9 PART I INTRODUCTION 1. Operations and Productivity 2. Operations Strategy in a Global Environment 3. Project Management 4. Forecasting PART II DESIGNING OPERATIONS 5. Design of Goods and Services 6. Managing Quality S6. Statistical Process Control 7. Process Strategy S7. Capacity Planning 8. Location Strategies 9. Layout Strategy 10. Human Resources and Job Design S10. Work Measurement PART III MANAGING OPERATIONS 11. Supply-Chain Management S11. E-Commerce and Operations Management 12. Inventory Management 13. Aggregate Planning 14. Material Requirements Planning (MRP) and ERP 15. Short-Term Scheduling 16. Just-in-Time and Lean Production Systems 17. Maintenance and Reliability FOCUS OF THE NEW EDITION The new edition continues to place a special focus on important aspects of Operations Management including: 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 decisions 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 the text. 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 and excitement. Active Model Exercises to use interactive Excel spreadsheets of examples in the book for what-if analysis.

P REFACE XXIII NEW TO THIS EDITION Service Integration with the Arnold Palmer Hospital and Seven New Video Case Studies In this edition, we illustrate how operations management is put into practice at Arnold Palmer 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 at such issues as project management, quality, process analysis, capacity planning, facility layout, supply chain management, and just-in-time inventory. This exciting and renowned facility, located in Orlando, Florida, emphasizing operations in a service environment, is featured throughout the text in examples, photos, video cases, and a Global Company Profile in Chapter 6. A VHS tape or DVD is 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 received major awards in the annual Telly Award Competitions. Out of over 10,000 entries, the Quality video was 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 company names in the world. The seven video case studies we created for Hard Rock also appear in this edition, making the combination of Hard Rock and Arnold Palmer Hospital the perfect way to integrate service applications into the OM course. VIDEO CASE STUDY VIDEO CASE STUDY Arnold Palmer Hospital s Supply Chain Arnold Palmer Hospital, one of the nation s top hospitals dedicated to serving women and children, is a large business with over 2,000 employees working in a 431-bed facility totaling 676,000 square feet in Orlando, Florida. Like many other hospitals, and other companies, Arnold Palmer Hospital had been a long-time member of a large buying group, one servicing 900 members. 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 that was not familiar to the physicians at Arnold Palmer Hospital. The buying group was also not able to negotiate contracts with local manufacturers to secure the best pricing. So in 2003, Arnold Palmer Hospital, together with seven other partner hospitals in central Florida, formed its own much smaller, but still powerful (with $200 million in annual purchases) Healthcare Purchasing Alliance (HPA) corporation. The new alliance saved the HPA members $7 million in its first year from two main changes. First, it was structured and staffed to assure that the bulk of the savings associated with its contracting efforts went to its eight members. Second, it struck even better deals with vendors by guaranteeing a committed volume and signing not 1-year deals but 3 5 year contracts. Even with a new internal cost of $400,000 to run HPA, the savings and ability to contract for what our member hospitals really want makes the deal a winner, says George DeLong, head of HPA. Effective supply-chain management in manufacturing often focuses on development of new product innovations and efficiency through buyer vendor collaboration. However, the approach in a service industry has a slightly different emphasis. At Arnold Palmer Hospital, supply-chain opportunities often manifest themselves through the Medical Economic Outcomes Committee. This committee (and its subcommittees) consists of users (including the medical and nursing staff) who evaluate purchase options with a goal of better medicine while achieving economic targets. For instance, the heart pacemaker negotiation by the cardiology subcommittee allowed for the standardization to two manufacturers, with annual savings of $2 million for just this one product. Arnold Palmer Hospital is also able to develop custom products that 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 General Medical, but assembled by a pack company that uses materials the hospital wanted purchased from specific manufacturers. The HPA allows Arnold Palmer Hospital to be creative in this way. With major cost savings, standardization, blanket purchase orders, long-term contracts, and more control of product development, the benefits to the hospital are substantial. Discussion Questions* 1. How does this supply chain differ from that in a manufacturing firm? 2. What are the constraints on making decisions based on economics alone at Arnold Palmer Hospital? 3. What role do doctors and nurses play in supply-chain decisions in a hospital? How is this participation handled at Arnold Palmer Hospital? 4. Doctor Smith just returned from the Annual Physician's Orthopedic Conference, where she saw a new hip joint replacement demonstrated. She decides she wants to start using the replacement joint at Arnold Palmer Hospital. What process will Dr. Smith have to go through at the hospital to introduce this new product into the supply chain for future surgical use? *You may wish to view this case on your CD-ROM before answering the questions. Source: Written by Professors Barry Render (Rollins College), Jay Heizer (Texas Lutheran University), and Beverly Amer (Northern Arizona State University). Homework Problem Material This text has long been known for its broad spectrum of material that can be assigned as homework. We offer Active Model Exercises, Discussion Questions, Homework Problems, Internet Homework Problems, Case Studies, Internet Case Studies, and Video Case 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 our exciting and dynamic field of study. Operations managers, like other top executives, face a plethora of difficult choices that stretch their ethical fibers every day. Each chapter features a new Ethical

XXIV P REFACE Dilemma and most chapters have more integrated discussions of ethics as well. These exercises make an ideal way to generate thought and discussion of this issue. ETHICAL DILEMMA John Edwards, president of Edwards Toy Company, Inc. in South Carolina, has just reviewed the design of a new pull-toy locomotive for 1- to 3-year-olds. John s design and marketing staff are very enthusiastic about the market for the product and the potential of follow-on circus train cars. The sales manager is looking forward to a very 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 not improve. John s production people have worked out the manufacturing issues and produced a successful pilot run. However, the quality testing staff suggests that under certain conditions, a hook to attach cars to the locomotive and the crank for the bell can be broken off. This is an issue because children can choke on small parts such as these. In the quality 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 an adult tossing the locomotive into a toy box or a 5-year-old throwing it on the floor, there were failures. The estimate is that one of the two parts can be broken off four times out of 100,000 throws. Neither the design nor the material people know how to make the toy safer and still perform as designed. The failure rate is low and certainly acceptable for this type of toy, but not at the six-sigma level that John s firm strives for. And, of course, someone, someday may sue. A child choking on the broken part is a serious matter. Also, John was recently reminded in a discussion with legal counsel that U.S. case law suggests that new products may not be produced if there is actual or foreseeable knowledge of a problem with the product. The design of successful, ethically produced, new products, as suggested 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 always been the large selection of examples, solved problems, Internet and text homework problems. Our 763 homework problems provide the largest, clearest, and now most diverse problem sets of any OM text. With this edition, we increase from a 1, 2, 3 dot level of difficulty for each of these problems, to a 1, 2, 3, 4 system having added challenging 4-dot problems to each chapter. These new homework problems are intended to stretch the thinking of students. 3. Excel Spreadsheets. OM is an ideal field in which spreadsheet analysis can help determine the best solution to a problem. Excel OM, our Excel add-in, is found on the student CD-ROM, and may be used to tackle many of the problems in this text. But many professors prefer to let students build their own Excel models. New to this edition are examples of how to do this. An inventory example from Chapter 12 is illustrated below: PROGRAM 12.1 Using Excel for a Production Model, with Data 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)/B6 Average Inventory B14 =B13/2 Number of Setups B15 =B3/B12 Time (days) between production runs B16 =B8/B15 Holding cost B18 =B14*B5 Setup cost B19 =B15*B4 Unit costs B21 =B9*B3 Total cost, Tc B22 =B18+B19+B21 Other Excel model building exercises are found throughout the text.

HEIZMF01_013185755X.QXD 5/4/05 4:41 PM Page xxv P R E FAC E XXV 4. OneKey With PH Grade Assist. OneKey provides an easy-to-use site for all digital resources available with our text, including our powerful new homework/exam feature called PH Grade Assist. With PH Grade Assist, many of the homework problems in this text and problems/questions from our Test Item File may now be assigned online to students. With dozens of options for randomizing the sequence, timing, and scoring, PH Grade Assist makes giving and grading homework and 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 problem, 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 be recorded 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 the Instructor 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 Project Management 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, He Scores (Chapters 12 and 14). POM for Windows Included Free on All Student CDs POM for Windows, long the leading OM 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 text that can be solved with this program are labeled with a. With this addition, the book now offers two choices of software for problem solving: POM for Windows and Excel OM. Instruction notes are here to help explain what to do next. PROGRAM IV.2 POM for Windows Module List CHAPTER-BY-CHAPTER CHANGES To highlight the extent of the revision of our previous edition, here are a few of the changes on a chapter-by-chapter basis. Five of the chapters received major rewrites: Managing Quality (Chapter 6), 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 every chapter. Chapter 1: Operations and Productivity. New material on the growth of services, productivity, and a section called Ethics and Social Responsibility are added. Chapter 2: Operations Strategy in a Global Environment. A new Global Company Profile highlighting the Boeing 787 opens the chapter and a new OM in Action box discusses strategy at Belgium s food retailer Franz Colruyt.

XXVI P REFACE Chapter 3: Project Management. The chapter now includes a section on Ethical Issues in Project management, a new OM in Action box on the Acela Amtrak project, and a new video case study called Project Management at Arnold Palmer Hospital. We have also added a project crashing exercise using MSProject and the Hard Rock Rockfest case, and a project simulation game called 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 Forecasting models 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 the Cell Phone Industry and Toyota is Revving Up with PLM, as well as text material on Product Lifecycle Management. There are also four new homework problems. Chapter 6: Managing Quality. This chapter opens with a new Global Company Profile featuring Arnold Palmer Hospital and ends with a video case study of quality at that organization. There is a new section of the chapter called Leaders in Quality, coverage of Ethics and Quality Management, and a much expanded treatment of Six Sigma. We have also broadened our coverage of TQM in services with new examples at UPS and Marriott. Supplement to Chapter 6: Statistical Process Control. We have added a new section on Creating Excel Spreadsheets to determine control limits, included 3 new homework problems, and a Dice Game for Statistical Control. Chapter 7: Process Strategy. This chapter contains several new topics, including the concept of Build-to-Order, treatment of Focused Processes, more coverage of Value Stream Mapping, Ethics and the Environmentally Friendly Processes, and new technology for remote control surgery. There is also a new OM in Action box on process change in Japanese barber shops and a new video case study called Process Analysis at Arnold Palmer Hospital, which requires the creation of three process flow charts by students. Supplement to Chapter 7: Capacity Planning. Our new video case study, Capacity Planning at Arnold Palmer Hospital, requires the use of regression analysis to forecast when new hospital 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 in location decisions, a new Table 8.3 on Clustering, a new OM in Action box dealing with Starbuck s entry into Japan, a new 4-dot homework problem, and a revision of the Hard Rock case study to include data for quantitative analysis. Chapter 9: Layout Strategy. We have extended coverage of Work Cells, included an example of staffing 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 comparison of two hospital layouts. Chapter 10: Human Resources and Job Design. This chapter includes new sections on the Visual 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 of Outsourcing including the OM in Action box Outsourcing Not to India, but to Remote Corners of the U.S., a section in Ethics in the Supply Chain that includes the Principles of Conduct by the Institute for Supply Management, new material on vertical integration, a new OM in Action box on Penney s supply chain to Taiwan for shirts, expanded coverage of Internet Purchasing, and a section called Logistics, Security, and JIT. Finally, we have added another new video case study called Arnold Palmer Hospital s Supply Chain.

P REFACE XXVII Supplement to Chapter 11: E-Commerce and Operations Management. We have updated this timely supplement with a new section on Collaborative Project Management, new material on Ariba s B2B model, and a new OM in Action box called Mars Online Auctions Win the Shipping Game. Chapter 12: Inventory Management. We now include material on creating your own inventory Excel Spreadsheets. A new section called Probabilistic Models and Safety Stock contains expanded coverage of probabilistic inventory. This includes models where (1) demand is variable and lead time is constant, (2) only lead time is variable, and (3) both demand and lead time are variable. 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 Bicycle Company. Finally, we include an inventory simulation game called He Shoots, He Scores on the Instructor s CD. Chapter 13: Aggregate Planning. Figure 13.5 and 13.6, dealing with yield management, have been treated in more detail. Chapter 14: Material Requirements Planning and ERP. We have added 3 new discussion questions and two new 4-dot, challenging homework problems. We have also added the topics of Finite Capacity scheduling and supermarkets (which join MRP and JIT), expanded coverage of MRP in Services, 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, aggregate planning, 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, added Lekin software (for finite capacity scheduling) to our CD-ROM, and increased material on the Theory of Constraints, including drum, buffer, rope. The section on Service Scheduling has been expanded and a detailed example of Cyclical Scheduling (Example 8) has been added, along with 2 new homework problems on the topic. Chapter 16: Just-in-time and Lean Production Systems. We have increased coverage on Toyota Production System (TPS) and added the topics of the 5 S s and Seven Wastes. A new video case study is JIT at Arnold Palmer Hospital. Chapter 17: Maintenance and Reliability. A new Global Company Profile for this chapter is Orlando 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 decision trees in ethical decision making, including an example of doing so (Example 8). There is also a new 4-dot, challenging, homework problem added. Quantitative Module B: Linear Programming. Excel s Solver is described in detail, as a tool for 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 homework set. Quantitative Module D: Waiting Line Models. The New England Foundry case is a newer version of the New England Castings case that we wrote many years ago, and we have added a new homework problem and a 4-dot problem. Quantitative Module E: Learning Curves. No changes. Quantitative Module F: Simulation. We have expanded our section on Using Excel Spreadsheets that shows students how to create their own formulas, and we have added a new 4-dot (challenging) homework problem.

HEIZMF01_013185755X.QXD XXVIII 5/4/05 4:41 PM Page xxviii P R E FAC E CD-ROM Tutorials Five mini chapters from the previous edition are unchanged. The tutorials are: Tutorial 1, Statistical Tools for Managers; Tutorial 2, Acceptance Sampling; Tutorial 3, The Simplex Method of Linear Programming; Tutorial 4, The MODI and VAM Methods of Solving Transportation Problems; Tutorial 5, Vehicle Routing and Scheduling. TRADEMARK FEATURES Our goal is to provide students with the finest pedagogical devices to help enhance learning and teaching. Balance between services and manufacturing. Both service and manufacturing examples are critical in an Operations Management course. We carefully blend the two together throughout the text. To emphasize each, we follow two manufacturing organizations, a restaurant chain, a hospital, and a university: Regal Marine (3 video cases and a Global Company Profile in Chapter 5); Wheeled Coach (4 video cases and a Global Company Profile in Chapter 14); Hard Rock Cafe (7 video cases and a Global Company Profile in Chapter 1); Arnold Palmer Hospital (7 video cases and a Global Company Profile in Chapter 6); Southwestern University (7 integrated case studies of issues facing this fictional college). In addition, we provide hundreds of other examples of service and manufacturing companies throughout the text, examples, and homework problems. Worked Out Examples. Step-by-step worked out examples of OM problems are extremely helpful in an analytical course such as this. The chapters contain 141 examples which are reinforced by 66 end-of-chapter Solved Problems. Further, the student CD and text web site each contain over a hundred Practice Problems. Superb Homework Problems. As the leading OM text, we take pride in having the leading homework problem set. The 597 problems in the text are coded on a 1, 2, 3, or 4 dot difficulty level. These are supplemented by 166 more homework problems on the book s web site. 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 a leading global organization. These include Amazon, Volkswagen, Dell, Arnold Palmer Hospital, Delta Airlines, McDonald s, Boeing, and many more. GLOBAL COMPANY PROFILE: Boeing s Global Strategy Yields Competitive Advantage B oeing s strategy for its 787 Dreamliner is unique from both an engineering and global perspective. The Dreamliner incorporates the latest in a wide range of aerospace technologies, from airframe and engine design to superlightweight titanium graphite laminate, carbon fiber and epoxy, and composites. Another innovation is the electronic monitoring system that allows the airplane to report maintenance requirements to ground-based computer systems. Boeing is also working with General Electric and Rolls-Royce to develop more efficient engines. The expected advances in engine technology will contribute as much as 8% of the increased fuel/payload efficiency of the new airplane, representing a nearly twogeneration jump in technology. This state-of-the-art Boeing 787 is also global. Led by Boeing at its Everett, Washington, facility, an international team of aerospace companies developed the airplane. New technologies, new design, With the 787 s state-of the-art design, more spacious interior, and global suppliers, Boeing is garnering sales worldwide.

P REFACE XXIX OM in Action Boxes Fifty-eight half-page examples of recent OM practices are drawn from 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. OM IN ACTION Outsourcing Not to India, but to Remote Corners of the U.S. U.S. companies continue their global search for efficiency by outsourcing call centers and back-office operations, but many find they need to look no farther than a place like Nacogdoches, Texas. To U.S. firms facing quality problems with their outsourcing operations in India and bad publicity at home, small-town America is emerging as a pleasant alternative. Nacogdoches (population 29,914) or Twin Falls, Idaho (population 34,469), may be the perfect callcenter locations. Even though the pay is only $7.00 an hour, the jobs are some of the best available to smalltown residents. By moving out of big cities to the cheaper labor and real estate of small towns, companies can save millions and still increase productivity. A call center in a town that just lost its major manufacturing plant finds the jobs easy to fill. U.S. Bank just picked Coeur d'alene, Idaho, for its credit card call center. The city has pretty serious unemployment, says VP Scott Hansen. We can go in with 500 jobs and really make a difference in the community. Dell just opened its corporate-customer call center in Twin Falls after closing a similar center in India, following customer complaints. Lehman Brothers likewise just canceled its outsourcing contract to India. But taking advantage of dirt-cheap wages will not stop soon. IBM bought Daksh eservices Ltd., a 9,000-employee Indian callcenter 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 (April 26, 2004): 56. Active Model Exercises Active Model Exercises are interactive Excel spreadsheets of examples in the textbook that allow the student to explore and better understand these important quantitative concepts. Students and instructors can adjust inputs to the model and, in effect, answer a whole series of what if questions that is provided (e.g., What if one activity in a PERT network takes 3 days longer? Chapter 3. What if holding cost or demand in an inventory model doubles? Chapter 12. What if the exponential smoothing constant is 0.3 instead of 0.5? Chapter 4). These Active Models are great for classroom presentation and/or homework. Twenty-eight of these models are included on the student CD-ROM and many are featured in the text. ACTIVE MODEL EXERCISE Milwaukee Paper Manufacturing. This Active Model allows you to evaluate changes in important elements on the hospital network we saw in this chapter, using your CD-ROM. See Active Model 3.1. ACTIVE MODEL 3.1 Project Management Other student resources include Marginal Notes and Definitions and Solutions to Even- Numbered Problems. FREE STUDENT CD-ROM WITH EVERY NEW TEXT Packaged free with every new copy of the text is a student CD-ROM that contains exciting resources to liven up the course and help students learn the content material.

XXX P REFACE PowerPoint Lecture Notes Based on an extensive set of over 1,000 newly revamped PowerPoint slides, these lecture notes provide reinforcement to the main points of each chapter and allow students to review chapter material. All the Powerpoints have been redrawn for clarity. Twenty-two Exciting Video Cases These video cases feature real companies (Regal Marine, Hard Rock Cafe, Ritz Carlton, Wheeled Coach, and Arnold Palmer Hospital) and allow students to watch short video clips, read about the key topics, answer questions, and then e-mail their answers to their instructors. These case studies can also be assigned without using class time to show the videos. Each of these was developed and written by the text 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, Ritz Carlton, 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 examples and 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 can also be accessed through this link. POM for Windows Software POM for Windows is a powerful tool for easily solving OM problems. 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. Excel OM automatically creates worksheets to model and solve problems. Users select a topic from the pull-down menu, fill in the data, and then Excel will display and graph (where appropriate) the results. This software is great for student homework, what if analysis, or classroom demonstrations. Do not change this cell without changing the number of rows in the data table. Enter the mean weight for each of the 12 samples. Enter the size for each of the hourly samples taken. = B22 Enter the desired number of standard deviations. = B7/SQRT(B6) Use the overall average as the center line; add and subtract the desired number of standard deviations in order to create upper and lower control limits (e.g., LCL = F10 F11*F12). Calculate x bar the overall average weight of 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 on data 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, The Simplex Method of Linear Programming, The MODI and VAM Methods of Solving Transportation Problems, and Vehicle Routing and Scheduling are provided as additional material. Microsoft Project 2003 MSProject, the most popular and powerful project management package, is now available on a second (free Value-Pack) student CD-ROM. This version is documented in Chapter 3 and is activated to work for 120 days.

P REFACE XXXI INSTRUCTOR S RESOURCES Test Item File The test item file, extensively updated by Professor L. Wayne Shell, contains a variety of true/false, multiple choice, fill-in-the-blank, short answer, and problem-solving questions for each chapter. The test item file can also be downloaded by instructors from Prentice Hall 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-generating software. This computerized package allows instructors to custom design, save, and generate classroom tests. The test program permits instructors to edit, add, or delete questions from the test banks; edit existing graphics and create new graphics; analyze test results; and organize a database of tests and student results. This new software allows for greater flexibility and ease of use. It provides many options for organizing and displaying tests, along with a search and sort feature. 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, and cases in the text, as well as worked-out solutions to all of the end-of-chapter problems, internet problems, and internet cases. The Instructor s Solutions Manual can also be downloaded by instructors from Prentice Hall s Companion Web site at http://www.prenhall.com/heizer. PowerPoint Presentations An extensive new set of PowerPoint presentations, created by Professor Jeff Heyl of Lincoln University, is available for each chapter. Comprising well over 2,000 slides, Professor Heyl has created this new set with excellent color and clarity. We have also included hundreds of Personal Response System slides, created by Professor Bill Swart of East Carolina University, enabling interactive exercises and discussion. These slides can also be downloaded 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 Jeff Heyl, contains many useful resources for the instructor course outlines, video notes, Internet exercises, additional teaching resources, and faculty notes. The Instructor s Resource Manual can also be downloaded by instructors from Prentice Hall s Companion Web site at http://www.prenhall.com/heizer. Instructor s Resource CD-ROM The Instructor s Resource CD-ROM provides the electronic files for the entire Instructor s Solutions Manual (in MS Word), PowerPoint presentations (in PowerPoint), Test Item File (in MS Word), and computerized test bank (TestGen). These files can also be downloaded off the Instructor Catalog page. Video Package Designed specifically for the Heizer/Render texts, the video package contains the following 32 videos: 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)

XXXII P REFACE Laying Out Arnold Palmer Hospital s New Facility (Ch. 9) Hard Rock Cafe s Human Resource Strategy (Ch. 10) Teams and Employee Involvement at Hewlett 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 Requirements Planning (Ch. 14) Scheduling at Hard Rock Cafe (Ch. 15) JIT at Arnold Palmer Hospital (Ch. 16) COMPANION WEB SITE Visit 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 25 per chapter, which include multiple choice, true or false, and Internet essay questions. The quiz questions are graded and can be transmitted to the instructor for extra credit or serve as practice exams. Virtual Tours These company tours provide direct links to companies ranging from a hospital to an auto manufacturer, that practice key concepts. After touring each Web site, students are asked questions directly related to the concepts discussed in the chapter. Internet Homework Problems A set of homework problems are available on the Companion Web 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 at www.prenhall.com. This password-protected area provides faculty with the most current and advanced support materials available: Instructor s Solutions Manual, Instructor s Resource Manual, PowerPoint slides, Personal Response System slides, and Test Questions. ACKNOWLEDGMENTS We thank the many individuals who were kind enough to assist us in this endeavor. The following professors provided insights that guided us in this revision: Shahid Ali Rockhurst University Stephen Allen Truman State University William Barnes Emporia State University Leon Bazil Stevens Institute of Technology Victor Berardi Kent State University Mark Berenson Montclair State University Joe Biggs California Polytechnic State University Peter Billington Colorado State University-Pueblo Lesley Buehler Ohlone College Darlene Burk Western Michigan University David Cadden Quinnipiac College James Campbell University of Missouri-St. Louis

P REFACE XXXIII William Christensen Dixie State College of Utah Roy Clinton University of Louisiana at Monroe Hugh Daniel Lipscomb University Anne Deidrich Warner Pacific College John Drabouski DeVry University Richard E. Dulski Daemen College Charles Englehardt Salem International University Wade Ferguson Western Kentucky University Rita Gibson Embry-Riddle Aeronautical University Eugene Hahn Salisbury University John Hoft Columbus State University Garland Hunnicutt Texas State University Wooseung Jang University of Missouri-Columbia Dana Johnson Michigan Technological University William Kime University of New Mexico Beate Klingenberg Marist College Jean Pierre Kuilboer University of Massachusetts-Boston Gregg Lattier Lee College Ronald Lau Hong Kong University of Science and Technology Mary Marrs University of Missouri-Columbia Richard Martin California State University-Long Beach Gordon Miller Portland State University John Miller Mercer University Donna Mosier SUNY Potsdam Arunachalam Narayanan Texas A&M University Susan Norman Northern Arizona University Prafulla Oglekar LaSalle University David Pentico Duquesne University Elizabeth Perry SUNY Binghamton Frank Pianki Anderson University Michael Plumb Tidewater Community College Leonard Presby William Paterson University Zinovy Radovilsky California State University, Hayward William Reisel St. John s University Spyros Reveliotis Georgia Institute of Technology Scott Roberts Northern Arizona University Stanford Rosenberg LaRoche College Edward Rosenthal Temple University Peter Rourke Wentworth Institute of Technology X. M. Safford Milwaukee Area Technical College Robert Schlesinger San Diego State University Daniel Shimshak University of Massachusetts-Boston Theresa A. Shotwell Florida A&M University Ernest Silver Curry College Samuel Y. Smith Jr. University of Baltimore Victor Sower San Houston State University John Stec Oregon Institute of Technology A. Lawrence Summers University of Missouri Rajendra Tibrewala New York Institute of Technology Ray Walters Fayetteville Technical Community College Jianghua Wu Purdue University Lifang Wu University of Iowa Xin Zhai Purdue University

XXXIV P REFACE We also wish to acknowledge the help of the reviewers of the earlier editions of this text. Without the help of these fellow professors, we would never have received the feedback needed to put together a teachable text. The reviewers are listed in alphabetical order. Sema Alptekin University of Missouri-Rolla Suad Alwan Chicago State University Jean-Pierre Amor University of San Diego Moshen Attaran California State University-Bakersfield Ali Behnezhad California State University-Northridge John H. Blackstone University of Georgia Theodore Boreki Hofstra University Rick Carlson Metropolitan State University Wen-Chyuan Chiang University of Tulsa Mark Coffin Eastern California University Henry Crouch Pittsburgh State University Warren W. Fisher Stephen F. Austin State University Larry A. Flick Norwalk Community Technical College Barbara Flynn Wake Forest University Damodar Golhar Western Michigan University Jim Goodwin University of Richmond James R. Gross University of Wisconsin-Oshkosh Donald Hammond University of South Florida John Harpell West Virginia University Marilyn K. Hart University of Wisconsin-Oshkosh James S. Hawkes University of Charleston George Heinrich Wichita State University Sue Helms Wichita State University Johnny Ho Columbus State University Zialu Hug University of Nebraska-Omaha Peter Ittig University of Massachussetts Paul Jordan University of Alaska Larry LaForge Clemson University Hugh Leach Washburn University B.P. Lingeraj Indiana University Andy Litteral University of Richmond Laurie E. Macdonald Bryant College Henry S. Maddux III Sam Houston State University Mike Maggard Northeastern University Mark McKay University of Washington Arthur C. Meiners, Jr. Marymount University Zafar Malik Governors State University Doug Moodie Michigan Tech University Philip F. Musa University of Alabama at Birmingham Joao Neves Trenton State College John Nicolay University of Minnesota Susan K. Norman Northern Arizona University Niranjan Pati University of Wisconsin-LaCrosse Michael Pesch St. Cloud State University David W. Pentico Duquesne University Leonard Presby William Patterson State College-NJ Zinovy Radovilsky California State University-Hayward Ranga V. Ramasesh Texas Christian University Emma Jane Riddle Winthrop University M.J. Riley Kansas State University Narendrea K. Rustagi Howard University Teresita S. Salinas Washburn University

P REFACE XXXV Chris Sandvig Western Washington University Ronald K. Satterfield University of South Florida Robert J. Schlesinger San Diego State University Shane J. Schvaneveldt Weber State University Avanti P. Sethi Wichita State University Girish Shambu Canisius Callege L.Wayne Shell (retired) Nicholls State University Susan Sherer Lehigh University Vicki L. Smith-Daniels Arizona State University Vic Sower Sam Houston State University Stan Stockton Indiana University John Swearingen Bryant College Susan Sweeney Providence College Kambiz Tabibzadeh Eastern Kentucky University Rao J. Taikonda University of Wisconsin-Oshkosh Cecelia Temponi Texas State University Madeline Thimmes Utah State University Doug Turner Auburn University V. Udayabhanu San Francisco State University John Visich-Disc University of Houston Rick Wing San Francisco State University Bruce M. Woodworth University of Texas-El Paso In addition, we appreciate the wonderful people at Prentice Hall who provided both help and advice: Mark Pfaltzgraff, our decision sciences executive editor; Debbie Clare, our executive marketing manager; Jane Avery, our senior editorial assistant; Nancy Welcher, our media project development manager; Cynthia Regan, our senior managing editor; and Karen Misler, our supplements editor. Reva Shader developed the exemplary subject indexes for this text. Donna Render and Kay Heizer provided the accurate typing and proofing so critical in a rigorous textbook. We are truly blessed 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 package that accompanies this text. Professor L. Wayne Shell helped create our new problem set and edited/checked the old one, Professor Howard Weiss (Temple University) developed the Active Models, Excel OM, and POM for Windows microcomputer software; Professor Jeff Heyl (Lincoln University) created the PowerPoints and also wrote the Instructor s Resource Manual; Dr. Vijay Gupta developed the Excel OM and POM for Windows Data Disks; Professor. L. Wayne Shell prepared the Test Bank; Beverly Amer (Northern Arizona University) produced and directed our video and 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; and Professor Bill Swart (East Carolina University) created the Personal Response System PowerPoint activities. 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 32789 EMAIL:BARRY.RENDER@ROLLINS.EDU JAY HEIZER TEXAS LUTHERAN UNIVERSITY 1000 W. COURT STREET SEGUIN, TX 78155 EMAIL: JHEIZER@TLU.EDU