Matching supply with demand : an introduction to operations management

MATCHING SUPPLY WITH DEMAND by Cachon and Terwiesch is the most authoritative, cutting-edge book for operations management MBAs. The book demands rigorous analysis on the part of students without requiring consistent use of sophisticated mathematical modeling to perform it. When the use of quantitative tools or formal modeling is indicated, it is only to perform the necessary analysis needed to inform and support a practical business solution.

Chapter 1 Introduction	p. 1
1.1 Learning Objectives and Framework	p. 3
1.2 Road Map of the Book	p. 6
Chapter 2 The Process View of the Organization	p. 10
2.1 Presbyterian Hospital in Philadelphia	p. 10
2.2 Three Measures of Process Performance	p. 15
2.3 Little's Law	p. 16
2.4 Inventory Turns and Inventory Costs	p. 19
2.5 Five Reasons to Hold Inventory	p. 23
Pipeline Inventory	p. 23
Seasonal Inventory	p. 24
Cycle Inventory	p. 25
Decoupling Inventory/Buffers	p. 26
Safety Inventory	p. 26
2.6 The Product-Process Matrix	p. 27
2.7 Summary	p. 29
2.8 Further Readings	p. 29
2.9 Practice Problems	p. 29
Chapter 3 Understanding the Supply Process: Evaluating Process Capacity	p. 32
3.1 How to Draw a Process Flow Diagram	p. 33
3.2 Bottleneck, Process Capacity, and Flow Rate (Throughput)	p. 38
3.3 How Long Does It Take to Produce a Certain Amount of Supply?	p. 40
3.4 Process Utilization and Capacity Utilization	p. 41
3.5 Workload and Implied Utilization	p. 43
3.6 Multiple Types of Flow Units	p. 44
3.7 Summary	p. 48
3.8 Practice Problems	p. 50
Chapter 4 Estimating and Reducing Labor Costs	p. 56
4.1 Analyzing an Assembly Operation	p. 56
4.2 Time to Process a Quantity X Starting with an Empty Process	p. 58
4.3 Labor Content and Idle Time	p. 60
4.4 Increasing Capacity by Line Balancing	p. 63
4.5 Scale Up to Higher Volume	p. 66
Increasing Capacity by Replicating the Line	p. 67
Increasing Capacity by Selectively Adding Workers	p. 67
Increasing Capacity by Further Specializing Tasks	p. 69
4.6 Summary	p. 72
4.7 Further Readings	p. 74
4.8 Practice Problems	p. 74
Chapter 5 The Link between Operations and Finance	p. 80
5.1 Paul Downs Cabinetmakers	p. 81
5.2 Building an ROIC Tree	p. 82
5.3 Valuing Operational Improvements	p. 87
5.4 Analyzing Operations Based on Financial Data	p. 90
5.5 Summary	p. 95
5.6 Further Readings	p. 95
5.7 Practice Problem	p. 95
Chapter 6 Batching and Other Flow Interruptions: Setup Times and the Economic Order Quantity Model	p. 97
6.1 The Impact of Setups on Capacity	p. 98
6.2 Interaction between Batching and Inventory	p. 101
6.3 Choosing a Batch Size in the Presence of Setup Times	p. 103
6.4 Balancing Setup Costs with Inventory Costs: The EOQ Model	p. 106
6.5 Observations Related to the Economic Order Quantity	p. 110
6.6 Transfer Batches	p. 114
6.7 Setup Time Reduction	p. 114
6.8 Other Flow Interruptions: Buffer or Suffer	p. 115
6.9 Summary	p. 117
6.10 Further Reading	p. 119
6.11 Practice Problems	p. 119
Chapter 7 Variability and Its Impact on Process Performance: Waiting Time Problems	p. 124
7.1 Motivating Example: A Somewhat Unrealistic Call Center	p. 125
7.2 Variability: Where It Comes From and How It Can Be Measured	p. 127
7.3 Analyzing an Arrival Process	p. 129
Stationary Arrivals	p. 131
Exponential Interarrival Times	p. 133
Nonexponential Interarrival Times	p. 134
Summary: Analyzing an Arrival Process	p. 135
7.4 Service Time Variability	p. 135
7.5 Predicting the Average Waiting Time for the Case of One Resource	p. 137
7.6 Predicting the Average Waiting Time for the Case of Multiple Resources	p. 141
7.7 Service Levels in Waiting Time Problems	p. 144
7.8 Economic Implications: Generating a Staffing Plan	p. 145
7.9 Impact of Pooling: Economies of Scale	p. 148
7.10 Priority Rules in Waiting Lines	p. 152
Service-Time-Dependent Priority Rules	p. 152
Service-Time-Independent Priority Rules	p. 152
7.11 Reducing Variability	p. 153
Ways to Reduce Arrival Variability	p. 153
Ways to Reduce Service Time Variability	p. 154
7.12 Summary	p. 156
7.13 Further Reading	p. 157
7.14 Practice Problems	p. 157
Chapter 8 The Impact of Variability on Process Performance: Throughput Losses	p. 163
8.1 Motivating Examples: Why Averages Do Not Work	p. 163
8.2 Ambulance Diversion	p. 164
8.3 Throughput Loss for a Simple Process	p. 165
8.4 Customer Impatience and Throughput Loss	p. 169
8.5 Several Resources with Variability in Sequence	p. 171
The Role of Buffers	p. 172
8.6 Summary	p. 174
8.7 Further Reading	p. 175
8.8 Practice Problems	p. 175
Chapter 9 Quality Management, Statistical Process Control, and Six-Sigma Capability	p. 178
9.1 Controlling Variation: Practical Motivation	p. 179
9.2 The Two Types of Variation	p. 180
9.3 Constructing Control Charts	p. 182
9.4 Control Chart Example from a Service Setting	p. 185
9.5 Design Specifications and Process Capability	p. 188
9.6 Attribute Control Charts	p. 190
9.7 Robust Process Design	p. 192
9.8 Impact of Yields and Defects on Process Flow	p. 194
Rework	p. 195
Eliminating Flow Units from the Process	p. 196
Cost Economics and Location of Test Points	p. 196
Defects and Variability	p. 197
9.9 A Process for Improvement	p. 198
9.10 Further Reading	p. 200
9.11 Practice Problems	p. 200
Chapter 10 Lean Operations and the Toyota Production System	p. 202
10.1 The History of Toyota	p. 202
10.2 TPS Framework	p. 204
10.3 The Seven Sources of Waste	p. 205
10.4 JIT: Matching Supply with Demand	p. 208
Achieve One-Unit-at-a-Time Flow	p. 208
Produce at the Rate of Customer Demand	p. 209
Implement Pull Systems	p. 209
10.5 Quality Management	p. 211
10.6 Exposing Problems through Inventory Reduction	p. 213
10.7 Flexibility	p. 214
10.8 Standardization of Work and Reduction of Variability	p. 215
10.9 Human Resource Practices	p. 216
10.10 Lean Transformation	p. 217
10.11 Further Reading	p. 218
10.12 Practice Problems	p. 218
Chapter 11 Betting on Uncertain Demand: The Newsvendor Model	p. 220
11.1 O'Neill Inc.	p. 221
11.2 An Introduction to the Newsvendor Model	p. 223
11.3 Constructing a Demand Forecast	p. 223
11.4 The Expected Profit-Maximizing Order Quantity	p. 232
11.5 Performance Measures	p. 236
Expected Lost Sales	p. 237
Expected Sales	p. 239
Expected Leftover Inventory	p. 239
Expected Profit	p. 240
Fill Rate	p. 240
In-Stock Probability and Stockout Probability	p. 241
11.6 Other Objectives for Choosing an Order Quantity	p. 242
11.7 Managerial Lessons	p. 244
11.8 Summary	p. 246
11.9 Further Reading	p. 248
11.10 Practice Problems	p. 248
Chapter 12 Assemble-to-Order, Make-to-Order, and Quick Response with Reactive Capacity	p. 256
12.1 Evaluating and Minimizing the Newsvendor's Demand-Supply Mismatch Cost	p. 257
12.2 When Is the Mismatch Cost High?	p. 259
12.3 Reducing Mismatch Costs with Make-to-Order	p. 262
12.4 Quick Response with Reactive Capacity	p. 263
Unlimited, but Expensive, Reactive Capacity	p. 263
Limited Reactive Capacity	p. 267
12.5 Summary	p. 274
12.6 Further Reading	p. 276
12.7 Practice Problems	p. 276
Chapter 13 Service Levels and Lead Times in Supply Chains: The Order-up-to Inventory Model	p. 283
13.1 Medtronic's Supply Chain	p. 284
13.2 The Order-up-to Model Design and Implementation	p. 287
13.3 The End-of-Period Inventory Level	p. 290
13.4 Choosing Demand Distributions	p. 291
13.5 Performance Measures	p. 295
In-Stock and Stockout Probability	p. 295
Expected Back Order	p. 297
Fill Rate	p. 298
Expected On-Hand Inventory	p. 299
Pipeline Inventory/Expected On-Order Inventory	p. 300
13.6 Choosing an Order-up-to Level to Meet a Service Target	p. 300
An In-Stock Probability Target	p. 301
A Fill Rate Target	p. 301
13.7 Choosing an Appropriate Service Level	p. 304
13.8 Controlling Ordering Costs	p. 307
13.9 Medtronic Wrap-up	p. 310
13.10 Managerial Insights	p. 312
13.11 Summary	p. 315
13.12 Further Reading	p. 316
13.13 Practice Problems	p. 316
Chapter 14 Risk-Pooling Strategies to Reduce and Hedge Uncertainty	p. 321
14.1 Location Pooling	p. 321
Pooling Medtronic's Field Inventory	p. 322
Medtronic's Distribution Center(s)	p. 326
Electronic Commerce	p. 328
14.2 Product Pooling	p. 330
14.3 Lead Time Pooling: Consolidated Distribution and Delayed Differentiation	p. 336
Consolidated Distribution	p. 336
Delayed Differentiation	p. 341
14.4 Capacity Pooling with Flexible Manufacturing	p. 344
14.5 Summary	p. 349
14.6 Further Reading	p. 352
14.7 Practice Problems	p. 352
Chapter 15 Revenue Management with Capacity Controls	p. 357
15.1 Revenue Management and Margin Arithmetic	p. 357
15.2 Protection Levels and Booking Limits	p. 359
15.3 Overbooking	p. 365
15.4 Implementation of Revenue Management	p. 367
Demand Forecasting	p. 368
Dynamic Decisions	p. 368
Variability in Available Capacity	p. 368
Reservations Coming in Groups	p. 368
Effective Segmenting of Customers	p. 368
Multiple Fare Classes	p. 369
Software Implementation	p. 369
Variation in Capacity Purchase: Not All Customers Purchase One Unit of Capacity	p. 369
15.5 Summary	p. 371
15.6 Further Reading	p. 372
15.7 Practice Problems	p. 372
Chapter 16 Supply Chain Coordination	p. 377
16.1 The Bullwhip Effect: Causes and Consequences	p. 377
Order Synchronization	p. 380
Order Batching	p. 382
Trade Promotions and Forward Buying	p. 383
Reactive and Overreactive Ordering	p. 386
Shortage Gaming	p. 387
16.2 Bullwhip Effect: Mitigating Strategies	p. 388
Sharing Information	p. 389
Smoothing the Flow of Product	p. 389
Eliminating Pathological Incentives	p. 390
Using Vendor-Managed Inventory	p. 390
16.3 Incentive Conflicts in a Sunglasses Supply Chain	p. 392
16.4 Buy-Back Contracts	p. 395
16.5 More Supply Chain Contracts	p. 401
Quantity Discounts	p. 401
Options Contracts	p. 401
Revenue Sharing	p. 401
Quantity Flexibility Contracts	p. 402
Price Protection	p. 402
16.6 Summary	p. 403
16.7 Further Reading	p. 403
16.8 Practice Problems	p. 403
Appendix A Statistics Tutorial	p. 406
Appendix B Tables	p. 415
Appendix C Evaluation of the Loss Function	p. 427
Appendix D Equations and Approximations	p. 430
Appendix E Solutions to Selected Practice Problems	p. 437
Glossary	p. 462
References	p. 471
Index of Key "How to" Exhibits	p. 474
Summary of Key Notation and Equations	p. 475
Index	p. 479

Available:*

On Order

Summary

Summary

Table of Contents