SUBJECT INDEX 513Linear programming (LP)definition, 481introduction, 481–482model, 482–483transportation method, 461–464using Microsoft Excel, 462–464,486–490Linear regression forecasting, 57–60Line structures, 217–219Little’s law, 171–172Location decisions. see Facility locationdecisionsLockheed Martin, 170Logisticsdecisions related to, 456–458definition, 436facilities, 458–468green sourcing, 438–441international, 456lean, 402outsourcing, 436overview, 455–456third-party companies, 456transportation modes, 457–458warehouse design, 458Long-range planning, 241Lot-for-lot, 279Lot sizing, 281–285, 331Lot tolerance percent defective (LTPD),330Low degree of customer contact, 204Lower process control limit (LCL), 321LP. See Linear programming (LP)LTC (least total cost), 283LTPD (lot tolerance percent defective),330LUC (least unit cost), 283–284MMAD (mean absolute deviation), 65–67Make-to-order, 169, 170, 268eMake-to-stock, 168–169, 268e,350–351, 351eMaking, 6Malcolm Baldrige National QualityAward, 300Management, learning curves usage by,121Manufacturing cell, 173, 176–177Manufacturing inventory, 352Manufacturing processesanalytics exercise, 195–197assembly-line design, 178–183break-even analysis, 198–199classification of production processes,204lean concepts in, 400–402linear programming applications for, 481production processes, 167–170 (seealso Production processes)Manufacturing strategy, 16–17MAPE (mean absolute percent error), 66Market research, 70Marks and Spencer, 307Mass customization, 17Master production schedule (MPS), 268–269, 276Material handling, 482Material management, 266Material requirements planning (MRP)analytics exercise, 296–297bill-of-materials, 271–273, 276–277calculations, 274–275, 277–281definition and introduction, 267explosion process, 275inventory records, 273–274, 277lot sizes, 281–285master production scheduling,268–269, 276project demand, 270–271, 275–276system structure, 270–275time fences, 269–270usage, 267–268, 268eMatrix project, 129–130McDonald’s, 383, 413, 414, 450, 460McKinsey, 307Mean absolute deviation (MAD), 65–67Mean absolute percent error (MAPE), 66Mean squared error, 65Measurement of error, 64–65Michigan State University, 392–393, 394eMicrosoft, 31, 150, 486Microsoft Excelcumulative standard normaldistribution, 508linear programming methodology,486–503negative exponential distribution, 507present value table, 506waiting line models, 219, 225e–227eMiller Brewing Company, 413Minimum-cost scheduling, 145–149Mitsukoshi Department Store, 376Mixed strategy, 245M&M Mars, 96Modular bill-of-materials, 273Motorola, 315–316, 321, 432Moving average, 50–52MPS (master production schedule), 268–269, 276MRP. See Material requirements planning(MRP)Multifactor productivity measure, 35Multiperiod inventory systems, 359–360Multiple lines, 217Multiple regression analysis, 69Multiplicative seasonal variation, 61NNational Institute of Standards andTechnology, 17, 300NEC, 437Net change systems, 275Netflix, 207Net requirements, 275, 279New Ark Hotel, 127New York Stock Exchange, 215Nissan, 96Nonlinear programming, 482Northwestern University, 394eNTN Driveshafts, 458OOffice Depot, 31Ohio State University, 392–393, 394eOperating characteristic (OC) curves,331–332Operations and supply chainmanagement (OSCM)analytics exercise, 23careers in, 14–16definition and overview, 4–9efficiency, effectiveness, and value,10–13ERP systems and, 266forecasting in, 46–47historical development of, 16–18introduction, 2–3Operations and supply chain strategyactivities, 32case study, 42–43competitive dimensions of, 28–30definition and overview, 27–31order winners and qualifiers, 31productivity measurement and, 34–37risk management and, 33–34sustainability and, 25–27trade-offs in, 30–31Operations effectiveness, 27Operations planning. See Sales andoperations planningOpportunity flow diagrams, 309, 311eOptimal order quantity, 361–363Oracle, 150Ordering costs, 353Order qualifiers, 31Order winners, 31Organizational learning, 114OSCM. See Operations and supply chainmanagement (OSCM)Outsourcing, 99, 435–441Ownership costs, 441–443PPanel consensus, 70Pareto charts, 309, 310ePareto principle, 373–374Partial productivity measure, 35Patient arrival, 216Payables period, 11P-charts, 321–323Peg record, 274
514 SUBJECT INDEXPenn State University, 394ePeoples’ Express, 252Performance ratios, 12–13Perishability, 8Permeable system, 205PERT (Program Evaluation and ReviewTechnique), 138Planned-order receipts, 275, 279Planned-order release, 275, 279Planning, 6. See also Capacity planning;Material requirements planning(MRP); Sales and operationsplanninginventory, 373–377linear programming for, 481–482service processes, 104–106Plants. See also Facility locationdecisions; Production designmaintenance, 266specialized, 412Plant within a plant (PWP), 96, 97ePMI (Project Management Institute), 15,150P-model (fixed-time period model),359–363, 368–369Point-of-sale (POS) data, 72Poisson distribution, 214–216Poka-yokes, 209–210Political risk, 459POS (point-of-sale) data, 72Precedence relationship, 178Preventative maintenance, 406Prevention costs, 304Price-break model, 371–373Priceline, 252Price versus cost, 28Probability analysisexponential distribution, 213–214inventory control, 356–358Poisson distribution, 214–216project management, 142–146quality control, 317, 319–321,330–332table, 508Process. See also Manufacturingprocesses; Process control;Production processes; Serviceprocesses; Statistical processcontrol (SPC)definition and overview, 5e, 6–7flexibility of, 97supply chain uncertainty, 432–435Process capability, 314–315Process controlc-charts, 324charts, 309, 311eintroduction, 321linear programming applications for,481p-charts, 321–323X- and R-charts, 325–329Process optimization, 482Process quality, 28–29Process selection, 173Process variation, 314–315Procter & Gamble, 307, 431–432Procurement, 401. See also SourcingProducer’s risk, 330Production change costs, 353Production designassembly lines, 178–183freeze windows, 408kanban control systems, 409–412lean supply chains, 400–402lean supply chains level schedules,407–412manufacturing process and, 175–177uniform plant loading, 408Production planning, 266Production planning environment,243–245Production planning strategies, 244–245Production processesdesign, 175–177introduction, 167–172lean schedules, 407–412mapping, 170–173organization, 173–178Production rate, 242Production requirements, 247Productivity, 34Productivity measurement, 34–37Product learning, 115Product-process matrix, 174Productscompetitive dimensions of, 29–30demand for, 270–271functional, 432–433innovative, 433linear programming applications for,481Product-service bundling, 9Product structure file, 272Product tree, 272Pro Fishing Boats, 426Program Evaluation and ReviewTechnique (PERT), 138Progress curves, 115Project, 128. See also ProjectmanagementProjected available balance, 279Project indirect costs, 146Project layout, 173, 175Project managementanalytics exercise, 164–165critical path method, 138–145definition and introduction, 127–132earned value management, 134–136Gantt charts, 132–133, 150information systems for, 150–151task organization, 131–132team organization, 129–131time-cost models and project crashing,145–149Project Management Institute (PMI), 15,150Project milestones, 131Project tracking, 135–136Purdue University, 392–393, 394ePure project, 129Pure strategy, 245PWP (plant within a plant), 96, 97eQQ-model (fixed-order quantity model),359–363Quadratic programming, 482Qualcomm, 264Qualitative forecasting, 47, 70–71Quality, 28–29Quality at the source, 302, 406–407Quality management, 266. See also SixSigmaacceptance sampling, 329–332analytics exercise, 345–346cost of, 301–304ISO 9000, 17ISO 9000 and ISO 14000, 304–306specifications development, 301–302statistical process control measures,321–329statistical quality control, 312–320total quality management, 300–304Quality Parts Company, 423–424Quantitative forecasting, 47Queue discipline, 217Queuing systems, 212–216. See alsoWaiting linesQuill, 31RRakuten, 207Random errors, 65Random variation, 48, 313Rate fences, 252Ratios, efficiency, 12–13, 444–445Raw materials, 352R-charts, 325–329Reactive system, 205Receivables turnover ratio, 12Regression, 57–60Reneging, 216Reorder point, 362–363Request for proposal (RFP), 430Residuals, 64Responsive supply chains, 433e, 434Returning, 7Ringling Bros. and Barnum and BaileyCircus, 97Riskconsumer’s, 330political, 459producer’s, 330supply chain, 33
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