NYU Stern School of Business

Undergraduate College


Spring 2011

Instructor Details

Armony, Mor


212 998 0291


KMC 8-62

This syllabus for C60.0001.003 is a draft.


Course Meetings

TR, 9:30am to 10:45am

Tisch T-201

Final Exam -  TBA



Course Description and Learning Goals

This course serves as an introduction to Operations Management. The coverage of the discipline is very selective: We concentrate on a small number of powerful themes that have emerged recently as the central building blocks of world-class operations. We also present a sample of operations management tools and techniques that have been proved extremely useful over the years. The topics are equally relevant in the manufacturing and service sectors.


Course Pre-Requisites



Course Outline


Session # + Date






Operating Systems

Benihana of Tokyo

Case assignment #1: Benihana


Personal information form


Process Analysis

Kristen Cookies

Donner Company

Case assignment #2:

Kristen Cookies


Waiting Lines




Waiting Lines


First City National Bank



Linear Programming


Homework #1



Linear Programming


Quality Management Introduction 6-sigma




Statistical Process Control

Cost of Quality

South Tree Electronics


Case assignment #3: South Tree Electronics


Introduction to Inventory



Inventory management under uncertainty

Xenon Drives case


Case assignment #4:

Xenon drives case


Newsvendor model


Supply Chain Management

L.L. Bean



Case assignment #5:

L. L. Bean


The Beer Game

Supply Chain Management




Project Management


Allied Distributing




The Goal

Final Review


Complete reading The Goal

Homework #2


Final Exam is due




Session 1:

DATE TBA, Introduction to Operations and Process Design


·         The Goal: Start reading(Read up to page 264 before DATE TBA)

·         Case: Benihana of Tokyo, W. Sasser and J. Klug, Harvard Business School (1998). Read, analyze, and be prepared to discuss the Benihana of Tokyo case. Use the following study questions as an aid in analyzing the case.

a) Describe Benihana as an operating system. (Draw a process flow diagram.)

b) How does the operating system support the Benihana concept?

c) Which parameters of the operating system influence the throughput of a Benihana Restaurant?

d) How does the cost structure of a Benihana restaurant compare with that of a typical American restaurant? How does Benihana get its competitive advantage?

Case Assignment #1: (Due at the Beginning of Class)

Answer questions c) and d) and submit at the beginning of class. Justify your answers.

·         Readings: TBD

Session 2:

DATE TBA, Design of Operating Processes


Ø  Design of Goods and Services

     Process Flow Analysis

Ø  Flow Diagram

Ø  Capacity, Throughput Time, Cycle Time

Ø  Gantt Chart

Ø  Bottleneck

Ø  Factors that Affect Throughput and the Bottleneck

o   Order Size

o   Resources (Labor, Supplies)

o   Set-up Time

·         Readings:

o   Read the note “Analysis of an Operation” from the course website.

o   TBD

·         Case: Kristen’s Cookie Company, Roger Bohn, Harvard Business School (1990). Read, analyze, and be prepared to discuss the Kristen's Cookie Company case, utilizing the six key questions at the end as guides.

Case Assignment #2: (Due at the Beginning of Class)

Identify all possible bottleneck operations in Kristen’s process. Explain.

·         Case:Use the EXCEL spreadsheets Donner.xls and Donner1.xls to analyze and understand the relationships among the number of orders (set-ups) in a month, order size and capacity.  The spreadsheets can be found on the course website.

Please bring laptops.

Session 3:

DATE TBA,The Effects of Uncertainty–Waiting Lines & Queueing Theory


Ø  Characteristics of a Waiting-Line System

–        Arrival, Waiting Line, Service Characteristics

–        Measuring the Queue’s Performance

–        Queuing Costs

Ø  Psychology of Queues

·         Readings:

o   Read Queueing Management and Models, Columbia Business School (available on Blackboard)

o   TBD

·         Case:Read, analyze, and be prepared to discussFirst City National Bank case. The following study questions will help:

a)      Considering the date supplied for arrival and service times, how would you calculate an average arrival rate and service rate?

b)      As Mr. Craig, what characteristics of this queueing system would you be most interested in observing?

c)      What is the best number of tellers to use?

Session 4:

DATE TBA, Waiting Lines and Simulation


·         Readings:

o   TBD

Session 5:

DATE TBA, Optimal Resource Allocation


·         Readings:

o   Read Introduction to Linear Programming (available on Blackboard)

o   TBD

Submit Homework #1

Session 6:

DATE TBA,Optimal Resource Allocation


·         Linear Programming

Ø  Models and Applications

Ø  Sensitivity Analysis and Shadow Prices

Quality Management

Ø  Quality – Its Definition and Basis for Competition

Ø  Six-sigma quality



Please bring laptops.

Session 7:

DATE TBA,Quality Management


Ø  Quality Analysis, Measurement and Improvement

Ø  Continuous improvement & Six Sigma

Ø  Control Charts

Ø  Cost of Quality

·         Readings:

o   Read Construction and Using Process Control Charts, Harvard Business School.

o   TBD


·         Case: Read, analyze and be prepared to discuss the quality control issues in the South Tree Electronics case.  In analyzing South Tree's quality control problem the following study questions may help:

–        Indicate on the process diagram, all current inspection points and note the accumulated cost and yield of each operation and test in the process.

–        How many circuits must you start with to achieve the desired output level?

–        At what yield rate would you be indifferent between continuing and discontinuing the first inspection in the process?


Case Assignment #3: (Due at the Beginning of Class)

With respect to South Tree Electronics calculate the cost of a good unit.

Session 8:

DATE TBA, Introduction to Inventory Management


Ø  Importance of Inventory

Ø  Inventory Measures

Ø  Economic Order Quantity (EOQ)

Ø  EOQ under Uncertainty

·         Readings:

o   TBD

·         Case: Xenon Drives. Read, analyze and be prepared to discuss the Xenon Drives case.


Case Assignment #4: (Due at the Beginning of Class)

Comment on Allen’s Claim: “I can’t see why it requires any more inventory to keep one month’s supply on hand in four branches than it did to keep a month’s supply on hand back at just the factory’s warehouse. A Month’s supply is a month’s supply no matter how you look at it.” 

Session 9:

DATE TBA,  Inventory Management Under Uncertainty


Ø  Newsvendor Model

Ø  Supply Chain Management

·         Readings:

o   TBD

·         Case:Read and be prepared to discuss the L.L. Bean, Inc case.


Case Assignment #5: (Due at the Beginning of Class)

With respect to the L.L. Bean case, please answer the following three questions:

1. How does L.L. Bean use past demand data and a specific item forecast to determine how many units of that item to stock?

2. What item costs and revenues are relevant to the decision of how many units of that item to stock?

3. How would you address Mark Fasold's concern that the number of items purchased usually exceeds the number forecast?

Session 10:

DATE TBA, Supply Chain Management


Ø  The Beer Game

Ø  Supply Chain Management

Ø  The Bullwhip Effect

Session 11:

DATE TBA, Project Management


Ø  Project Management


Ø  Crashing the project

·         Readings:

o   TBD

·         Case:In preparation for class, draw the network describing the projects in FCN/Securities Demo (A) and Allied Distributing exercises.

Read and be prepared to discuss FCN(B).

Session 12:

DATE TBA, The Goal and Final Review


·         The Goal: Read up to page 264

Discussion of “The Goal”

a.       How does production control work in Alex’s factory? More specifically, given a set of orders to be produced, what is the scheme by which work is released to the factory? What is the scheme by which work is prioritized at each process step?

b.      What steps did Alex take to improve performance (as measured by the goal) in his factory?

c.       What are the weaknesses in the message of The Goal?

Submit Homework #2


Required Course Materials

Cases and Readings:   Digital Course-pack (also, some cases will be distributed in class, and some can be downloaded from the course web site)

The Goal:  A Process of Ongoing Improvement”, third revised edition), by Eliyahu Goldratt and Jeff Cox, North River Press, Inc.

Computer Software:  Excel.

Custom Text:  A Pearson customized version with selected chapters from Operations Management; Heizer and Render; 10th Edition; Prentice Hall (2011)


Assessment Components


Class Attendance & Participation:         10%

Case Assignments:                              20%

Homework:                                          30%

Final exam:                                         40%



At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well you actually perform in this course.



The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.


Professional Responsibilities For This Course

Attendance and Participation: Attendance is required in all class sessions for full credit. Students are also expected to participate in class discussion and other in-class activities. The use of computers and communication devices is not allowed during class sessions (with the exception of a few class sessions, in which we will be specifically using laptops). If you would like to use your laptop for the purpose of note taking, please discuss with the instructor.

Case Assignments: There are 5 case assignments. These may be prepared in groups of up to 4 people. One copy per group per assignment needs to be submitted at the beginning of the class session. Page limit: 2 page, 11pt, double spaced.

Homework Assignments: In addition to case assignments, there will be 2 homework assignments. These need to be prepared individually. Students may discuss the problems with others, but writing the report should be done alone.

Final Exam: The final exam will be a take-home and will test you on all the material covered in the entire class. The exam is open books and open notes, and you will need a calculator.


I expect every student to be familiar with the Stern School of Business Honor Code. Some of the ways in which the code applies to this course are discussed below:

·         The honor code stipulates that no student will lie, cheat, copy or otherwise behave in an unfair manner to obtain academic advantage over other students.

·         As per the honor code, an individual’s name on a report should be included only if they have contributed to the analysis. If an individual has not contributed to the analysis in an intellectual manner, it is a violation of the honor code to include his or her name.

·         Furthermore, you may not refer to write-ups from classes offered in earlier semesters.

·         The premise of the honor code is that ideas should be attributed to their source. Therefore, please acknowledge the main source(s) of data, facts, and ideas (other than from the instructor or textbook) in all your written work and when you make a presentation. If you use material from a source other than the lecturer, TA, the textbooks or the lecture notes, you must acknowledge the source. For example, say, “I obtained this from the following website.”

·         You may discuss the homework with your classmates, TA or the Professor. However, you must write them down individually (excluding case assignments which are to be prepared in groups of up to 4 students). The discussion is limited to “how to solve” type of questions. Do not be concerned about getting a wrong answer in the case assignments. These will be graded based on effort. The two homework assignments will be graded based on effort and correctness.


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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