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™ ™ Prepare, Apply, and Confirm with MyOMLab Prepare, Apply, and Confirm with MyOMLab • Pearson eText Features —Keep students • Worked Solutions—Provide step-by-step engaged in learning on their own time, while helping explanations on how to solve select problems using them achieve greater conceptual understanding of the exact numbers and data that were presented course material through author-created solutions in the problem. Instructors will have access to the videos and opportunities to Try It! 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Now, to all the personalized learning MyLab resources that students can use any device to interact in the make studying more efficient and effective. classroom. • Study Plan for Self-Paced Learning—MyOMLab • Mobile Ready—Students and instructors generates a personalized Study Plan for each student can access multimedia resources and complete based on his or her test results. The Study Plan links assessments right at their ﬁngertips, on any directly to interactive tutorial exercises for topics the mobile device. student has not mastered. Krajewski_ifbc.indd 1 14/05/15 1:25 PM Operations Management PROCESSES AND SUPPLY CHAINS Eleventh Edition Global Edition LEE J. KRAJEWSKI Professor Emeritus at The Ohio State University and the University of Notre Dame MANOJ K. MALHOTRA University of South Carolina LARRY P. RITZMAN Professor Emeritus at The Ohio State University and Boston College Boston Columbus Indianapolis New York San Francisco Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo A01_KRAJ2132_11_SE_FM.indd 1 06/13/15 12:35 PM Vice President, Business Publishing: Donna Battista Creative Director: Blair Brown Acquisitions Editor: Daniel Tylman Art Director: Jon Boylan Senior Acquisitions Editor, Global Editions: Steven Vice President, Director of Digital Strategy and Jackson Assessment: Paul Gentile Associate Editor, Global Editions: Paromita Banerjee Manager of Learning Applications: Paul DeLuca Editorial Assistant: Linda Albelli Digital Editor: Megan Rees Vice President, Product Marketing: Maggie Moylan Director, Digital Studio: Sacha Laustsen Director of Marketing, Digital Services and Products: Digital Studio Manager: Diane Lombardo Jeanette Koskinas Digital Studio Project Manager: James Bateman Executive Product Marketing Manager: Anne Fahlgren Digital Content Team Lead: Noel Lotz Field Marketing Manager: Lenny Ann Raper Digital Content Project Lead: Courtney Kamauf Senior Strategic Marketing Manager: Erin Gardner Media Production Manager, Global Editions: Team Lead, Program Management: Ashley Santora Vikram Kumar Program Manager: Kathryn Dinovo Full-Service Project Management and Composition: Team Lead, Project Management: Jeff Holcomb Lumina Datamatics Project Manager: Alison Kalil Interior Designer: Lumina Datamatics Senior Manufacturing Controller, Global Editions: Cover Designer: Lumina Datamatics Trudy Kimber Cover Art: © welcomia/Shutterstock Operations Specialist: Carol Melville Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson Education Limited 2016 The rights of Lee J. Krajewski, Manoj K. Malhotra, and Larry P. Ritzman to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Authorized adaptation from the United States edition, entitled Operations Management: Processes and Supply Chains, 11th Edition, ISBN 978-0-13-387213-2 by Lee J. Krajewski, Manoj K. Malhotra, and Larry P. Ritzman, published by Pearson Education © 2016. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library 10 9 8 7 6 5 4 3 2 1 ISBN 10: 1-292-09386-2 ISBN 13: 978-1-292-09386-4 Typeset in Utopia Std by Lumina Datamatics Printed and bound by Courier Kendallville in The United States of America A01_KRAJ2132_11_SE_FM.indd 2 06/13/15 12:35 PM Dedicated with love to our families. ■ Judie Krajewski Christine and Gary; Gabrielle Selena and Jeff; Alex Lori and Dan; Aubrey, Madeline, Amelia, and Marianna Carrie and Jon; Jordanne, Alaina, and Bradley Virginia and Jerry Virginia and Larry ■ Maya Malhotra Vivek, Pooja, and Neha Santosh and Ramesh Malhotra Indra and Prem Malhotra; Neeti, Neil, and Niam Ardeshna; Deeksha Malhotra Sadhana Malhotra Leela and Mukund Dabholkar Aruna and Harsha Dabholkar; Aditee Mangala and Pradeep Gandhi; Priya and Medha ■ Barbara Ritzman Karen and Matt; Kristin and Alayna Todd; Cody, Cole, Taylor, and Clayton Kathryn and Paul Mildred and Ray A01_KRAJ2132_11_SE_FM.indd 3 06/13/15 12:35 PM This page intentionally left blank A01_KRAJ2132_11_SE_FM.indd 4 06/13/15 12:35 PM About the Authors Lee J. Krajewski is Professor Emeritus at The Ohio State University and Professor Emeritus at the University of Notre Dame. While at The Ohio State University, he received the University Alumni Distinguished Teaching Award and the College of Business Outstanding Faculty Research Award. He initiated the Center for Excellence in Manufacturing Management and served as its director for four years. At the University of Notre Dame, he held the William and Cassie Daley Chair in Management. In addition, he received the National President’s Award and the National Award of Merit of the American Production and Inventory Control Society. He served as president of the Decision Sciences Institute and was elected a Fellow of the Decision Sciences Institute in 1988. He received the Distinguished Service Award in 2003. Lee received his PhD from the University of Wisconsin. Over the years, he has designed and taught courses at both graduate and undergraduate levels on topics such as operations strategy, introduction to operations management, operations design, project management, and manufacturing planning and control systems. Lee served as the editor of Decision Sciences, was the founding editor of the Journal of Operations Management, and has served on several editorial boards. Widely published himself, Lee has contributed numerous articles to such journals as Decision Sciences, Journal of Operations Management, Manage- ment Science, Production and Operations Management, International Journal of Production Research, Harvard Business Review, and Interfaces, to name just a few. He has received five best-paper awards. Lee’s areas of specialization include operations strategy, manufacturing planning and control systems, supply chain management, and master production scheduling. Manoj K. Malhotra is the Jeff B. Bates Professor in the Darla Moore School of Business and has served as the chairman of the Management Science Department at the University of South Carolina (USC), C olumbia, since 2000. He is also the founding director of the Center for Global Supply Chain and Process Management (GSCPM), which has been in operation since 2005. He earned an engineering undergraduate degree from the Indian Institute of Technology (IIT), Kanpur, India, in 1983, and a PhD in operations management from The Ohio State University in 1990. He is a Fel- low of the Decision Sciences Institute (DSI) and the American Production and Inventory Management Society (APICS). Manoj has c onducted semi- nars and consulted with firms such as Avaya, Continental, Cummins Turbo Technologies, John Deere, Metso Paper, Palmetto Health, Sonoco, Prysmian, Verizon, Walmart, and Westinghouse-Toshiba among others. Apart from teaching operations management, supply chain management, and global business i ssues at USC, Manoj has also taught at the Terry School of Business, University of Georgia; Wirtschaftsuniversität Wien in Austria; and the Graduate School of Management at Macquarie University, A ustralia. His research has thematically focused on the deployment of flexible resources in manufacturing and service firms, operations and supply chain strategy, and on the interface between operations management and other functional areas of business. His work on these and related issues has been published in the leading refereed journals of the field such as Decision Sciences, European Journal of Operational Research, Interfaces, Journal of Operations Management, and Production and Operations Management. Manoj has been recognized for his pedagogical and scholarly contributions through several teaching and discipline-wide research awards. He is the recipient of the Michael J. Mungo Outstanding Graduate Teaching Award in 2006, the Carolina Trustee Professor Award in 2014, and the Breakthrough Leadership in Research Award in 2014 from the University of South Carolina. He is active in professional organizations such as Decision Sciences Institute (DSI) and P roduction and Operations Management Society (POMS), and has served as the program chair for international con- ferences at both DSI and POMS. He also serves on the editorial boards of top-tier journals in the field. 5 A01_KRAJ2132_11_SE_FM.indd 5 06/13/15 12:35 PM 6 ABOUT THE AUTHORS Larry P. Ritzman is Professor Emeritus at The Ohio State University and Professor Emeritus at Boston College. While at The Ohio State U niversity, he served as department chairman and received several awards for both teaching and research, including the Pace Setters’ Club Award for Out- standing Research. While at Boston College, he held the Thomas J. Gal- ligan, Jr. chair and received the Distinguished Service Award from the School of Management. He received his doctorate at Michigan State University, having had prior industrial experience at the Babcock and Wilcox Company. Over the years, he has been privileged to teach and learn more about operations management with numerous students at all levels—undergraduate, MBA, executive MBA, and doctorate. Particularly active in the Decision Sciences Institute, Larry has served as council coordinator, publications committee chair, track chair, vice president, board member, executive committee member, doctoral consortium coordinator, and president. He was elected a Fellow of the Decision Sciences Institute in 1987 and earned the Distinguished Service Award in 1996. He has received three best-paper awards. He has been a frequent reviewer, discussant, and ses- sion chair for several other professional organizations. Larry’s areas of particular expertise are service processes, operations strategy, production and inventory systems, forecasting, multistage manufacturing, and layout. An active researcher, Larry’s publications have appeared in such journals as Decision Sciences, Journal of Operations Management, Production and Operations Management, Harvard Business Review, and Management Science. He has served in various editorial capacities for several journals. A01_KRAJ2132_11_SE_FM.indd 6 06/13/15 12:35 PM Brief Contents 1 USING OPERATIONS TO CREATE VALUE 21 SUPPLEMENT A DECISION MAKING MODELS 49 PART 1 Process Management 69 2 PROCESS STRATEGY AND ANALYSIS 69 3 MANAGING QUALITY 115 4 PLANNING CAPACITY 155 SUPPLEMENT B WAITING LINE MODELS 179 5 MANAGING PROCESS CONSTRAINTS 197 6 DESIGNING LEAN SYSTEMS 227 7 MANAGING EFFECTIVE PROJECTS 257 PART 2 Customer Demand Management 295 8 FORECASTING DEMAND 295 9 MANAGING INVENTORIES 337 SUPPLEMENT C SPECIAL INVENTORY MODELS 379 10 PLANNING AND SCHEDULING OPERATIONS 393 SUPPLEMENT D LINEAR PROGRAMMING MODELS 429 11 EFFICIENT RESOURCE PLANNING 457 PART 3 Supply Chain Management 503 12 DESIGNING EFFECTIVE SUPPLY CHAINS 503 13 SUPPLY CHAINS AND LOGISTICS 531 14 INTEGRATING THE SUPPLY CHAIN 563 15 MANAGING SUPPLY CHAIN SUSTAINABILITY 597 Appendix Normal Distribution 619 References 621 Glossary 629 Name Index 643 Subject Index 647 MYOMLAB SUPPLEMENTS Supplement E SIMULATION E-1 Supplement F FINANCIAL ANALYSIS F-1 Supplement G ACCEPTANCE SAMPLING PLANS G-1 Supplement H MEASURING OUTPUT RATES H-1 Supplement I LEARNING CURVE ANALYSIS I-1 Supplement J OPERATIONS SCHEDULING J-1 Supplement K LAYOUT K-1 7 A01_KRAJ2132_11_SE_FM.indd 7 06/13/15 12:35 PM This page intentionally left blank A01_KRAJ2132_11_SE_FM.indd 8 06/13/15 12:35 PM