NYU Stern School of Business

Undergraduate College

OPMG-UB.0001.005 (C60.0001): COMPETITIVE ADVANTAGE FROM OPERATIONS

Fall 2011

Instructor Details

Josh Reed

jreed@stern.nyu.edu

Mon 10-12 and Wed 12-2

8-79 KMC

 

Teaching Fellow: Joachim Over

jho234@stern.nyu.edu

Mon 12-1 and Tues 12-1

LC-27

 

Course Meetings

TR, 3:30pm to 4:45pm

Tisch T-LC21


 

Final Exam: Dec. 22, 4:00-5:50 pm

Schedule exceptions
    Class will not meet on:
    Class will meet on:

 

Course Description and Learning Goals

This syllabus is tentative and subject to change.

This course is designed to give students a better understanding of how firms can gain competitive advantage from their operations function. Typically this requires the firm to achieve, at a minimum cost, quality, and ecological parity; responsiveness and adaptability to customer needs and desires; rapid time to market; process technology leadership; and sufficient and responsive capacity. A problem-solving framework is developed that enables students to undertake managerial and technical analysis that should result in the desired comparative advantage. Both service and manufacturing case examples are utilized.

HOMEWORK

You will be assigned homework on a class by class basis for each topic. The homework assignments are due on the dates (sessions) indicated. Assignments are to be handed-in at the beginning of class. Keep a copy of all homework submitted for reference during class.

Homeworks will be graded on a scale out of 10 and will not be accepted late. They must be prepared individually in order to receive credit. Please write clearly or word process your homework.

 

HOW TO PREPARE FOR CLASS DISCUSSIONS

Please read the cases carefully. Use the study questions supplied in the syllabus as a guide. Be prepared to be called-upon to present the facts of the case, or carryout the analysis indicated by the study questions.

 

Course Pre-Requisites

No prerequisites.

 

Course Outline

The final exam is on Dec 22, from 4:00-5:50 pm. Please mark this in your calendars now.

This syllabus is tentative and subject to change.

MODULE 1: Introduction to Operating Systems: Process Design and Analysis

Sept 6    SESSION    1:   INTRODUCTION – OPERATIONS AS A SOURCE OF COMPETITIVE ADVANTAGE

  1. Recommended reading : The Goal by E.M. Goldratt
  2. Introduction to Operations Management – Course Introduction and Overview

Sept 8   SESSION   2:   PROCESS DESIGN

  1. Read Chapter 1 in Heizer and Render (H&R)
  2. Read Analysis of an Operation
  3. Read, analyze, and be prepared to discuss the Benihana of Tokyo case, available on XanEdu. Also, available on (pages 95-111) (91-108) the Casebook.  Use the following study questions as an aid in analyzing the case.

(a) Describe Benihana as an operating system. (Draw a process flow diagram.) List the relevant inputs, process, and output elements in three columns.

(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?

(e) What is the proper relationship between the number of tables in the dining room and number of seats in the bar? Assume they want the average customer to stay 18 minutes in the bar.

  1. Homework #1: Answer questions (a) and (e) and submit at the beginning of next class, Sept.13.

 

Sep 13 SESSION   3:  OPERATING SYSTEMS – TYPES OF OPERATING PROCESSES

  1. Read Chapter 7, pages 249-259 (253-266) in H&R.
  2. Read Terms Used In Operations Management (p.1-4 in Casebook) (1-4)
  3.  Discussion questions 2,4,9,11,12,13, and 14 in H&R (p 274) (281)
  4. Homework #1 is due.

Sep 15 SESSION   4:  PROCESS ANALYSIS (1)

  1. Read Chapter 5, pages 158-168 (162-172) and 174-176 (178-180) in H&R
  2. Read Chapter 7, pages 259-271 (266-279) in H&R
  3. Read, analyze and be prepared to discuss the Kristen's Cookie Company case (p. 113-115 in Casebook) (109-112) utilizing the six key questions at the end as guides.  In particular prepare question 4 below.
  4. What are the cycle time, throughput time, and capacity of each operation and the whole production system?
  5. Homework #2:  PIck up a copy of Homework #2 which is due on September 22.

Sep 20  SESSION   5: PROCESS ANALYSIS (2)

  1. Read the Donner Company case, which is available on XanEdu.  Also, available on  (pages 117-130 in Casebook) (113-126). Use the EXCEL spreadsheets discussed in class (Donner.xls and Donner1.xls) to analyze and understand the relationships between number of orders (set-ups) in a month, order size, and capacity
  2. Describe Donner as an operating process. To simplify this task, consider only the flow of the most important output.
  3. Assume Donner has to process 60 orders in a certain month. What is the capacity (in terms of the number of boards) of each operation and of the entire system?
  4. What factors influence the capacity of the entire system? What is the current utilization of the machines?
  5. What was the efficiency of Donner?
  6. What are the causes of the major problems described at the end of the case? How would you propose to resolve them?

 

MODULE 2:  Optimal Resource Allocation

Sep 22   SESSION    6: THE BASIC LINEAR PROGRAMMING (LP) PROBLEM

  1. Read Quantitative Module B: Linear Programming in H&R (pages 689-704) (705-720). You may do the first reading for a quick overview.
  2. Read (more carefully) pages 689-697 (705-712), again.
  3. Attempt Problem B.10 on page 709 (727).
  4. Be sure you get the handout with the three LP problems.
  5. Homework #2 is due.

Sep 27 SESSION  7: SOLUTION TECHNIQUES: GRAPHICAL METHOD AND ENUMERATING THE CORNER POINTS

  1. Read pages 697-704 in Quantitative Module B (H&R).
  2. Homework #3: Solve problems B.2 and B.3 on page 709 (726) using (a) Graphical and (b) Enumerating the Corner Points methods. Due on October 4.

Sep 29 SESSION   8:    LP SOLUTION (LINDO OR EXCEL INTERPRETATION)

  1. Solve problems 1-3 on the LP formulatin hand-out Sheet using EXCEL method.
  2. Solve Problem B.2 and B.3 on page 709 (726), using this method.
  3. Interpretation of the results.

Oct 4    SESSION   9: USING THE LP MODEL  AND MIDTERM REVIEW

  1. Read pages 697-704 (712-720) in Quantitative Module B (H&R).
  2. Read, analyze, and be prepared to discuss the Otto Development Corporation case which will be posted on Blackboard. Also, available on (pages 81-83 in Casebook) (79-81).
  3. Review of all the material before the midterm
  4. Homework #3 is due.

Oct 6 SESSION    10:   Midterm  Exam  I  

 

MODULE 3: Time Based Competition

Oct 13     SESSION 11: TIME BASED COMPETITION

  1. Read Chapter 3 in H&R (p. 55-81) (55-80). Attempt the discussion questions at the end of the chapter.
  2. Draw the networks for the projects described in the FCN/Securities Demo (A) exercise, which will be posted on Blackboard. Also, available on (p. 30 in Casebook) (30).
  3. Homework #4:  Pick up a copy of Homework #4, which is due on October 20.

Oct 18     SESSION   12: PROJECT MANAGEMENT

  1. Read, analyze and be prepared to discuss the other four project management network cases avaiable on Blackboard or in the Casebook: FCN (B), FCN (C) (p.31-32 in Casebook) (31-32), Specialty Contractors, and Aerospace Components (p. 37-39 in Casebook) (35-37).

 

MODULE 4: Managing Quality as a Strategic Issue

Oct 20   SESSION    13:    QUALITY – ITS DEFINITION AND BASIS FOR COMPETITION

  1. Preview of the next half of the course.
  2. Read Chapter 6 in H&R (p. 187-209) (191-212)
  3. Homework #4 is due.

Oct 25   SESSION    14:    QUALITY ANALYSIS, MEASUREMENT AND IMPROVEMENT

  1. Read the Ford-Firestone case (p. 41-72 in Casebook) (39-70) and be prepared to discuss.
  2. Homework #5Prepare and submita Fishbone Diagram of the tread-separation / SUV rollover. Due at the beginning of class today.

Oct 27 SESSION 15: STATISTICAL PROCESS CONTROL

  1. Read the Supplement to Chapter 6 in H&R (p. 217-236) (221-240).
  2. Homework #6: Pick up a copy of Homework 6, it is due on November 3.

Nov 1    SESSION    16: QUALITY IMPROVEMENT

  1. Read, analyze and be prepared to discuss the quality control issues in the South Tree Electronics case available on Blackboard or (p. 73-79 in Casebook) (71-78).
  2. In analyzing South Tree's quality control problem the following study questions may help:
  3. Indicate on the process diagram, all current inspection points and note the accumulated cost and yield of each operation and test in the process.
  4. How many circuits must you start with to achieve the desired output level?
  5. At what yield rate would you be indifferent between continuing and discontinuing the first inspection in the process?

Nov 3   SESSION 17:   Midterm  Review 

  1. Homework #6 is due.

Nov 8   SESSION 18:    Midterm Exam  II  

 

MODULE 5: Inventory Concepts and Models

Nov 10  SESSION 19: INVENTORY / LOGISTICS

  1. Read Chapter 12 in H&R (p. 465-487 in H&R) (481-501).

Nov 15  SESSION 20: THE ROLE OF INVENTORY - THE TRADITIONAL VIEW

  1. Read, analyze and be prepared to discuss the Blanchard Company case available on XanEdu or (p. 131-141 in Casebook) (127-138). Use the following study guide questions:
  2. Determine which costs should be included to perform EOQ/ELS calculations.
  3. What are the assumptions of EOQ/ELS model that Blanchard has?
  4. Briefly describe the inventory system designed by Bob and Elliot.
  5. Evaluate this system by identifying the major advantages and disadvantages.
  6. What is Blanchard's shortage costs for its products?
  7. Homework #7: Pick up a copy of Homework #7. It is due on December 1.

Nov 17 SESSION 21: INVENTORY MANAGEMENT UNDER UNCERTAINTY

  1. Read Chapter 12 in H&R (p. 487-494 in H&R) (502-506).
  2. Read the Chapter 16 in H&R on Just-in-Time systems (p. 619-639 in H&R) (639-659)
  3. Read, analyze and be prepared to discuss the L.L. Bean Inc. case. available on XanEdu or (pages 143-147 in Casebook) (139-143)

 

Nov 22 SESSION 22: THE EFFECTS OF UNCERTAINTY - WAITING LINES

  1. Read Quantitative Module D in H&R on Waiting Lines and Queuing Theory (p. 739-754 in H&R) (753-766).
  2. Prepare the sixteen discussion questions at the end of Module D in H&R (p. 758) (775)

Nov 29 SESSION 23: INVENTORY IN ACTION: THE BEER GAME  ROOM: KMC 5-50 (Barr-Kawamura Commons)

MODULE 6: Time-to-Market & Responsiveness

 

Dec 1 SESSION 24: SUPPLY CHAIN MANAGEMENT

  1. Debrief of the Beer Game
  2. Read Chapter 11 and the Supplement to Chapter 11 in H&R (p. 449-459) (431-455)
  3. Homework #7 is due

Dec 6 SESSION 25: QUEUING THEORY IN ACTION

Read, analyze, and be prepared to discuss the First City National Bank case (p.85-91 in Casebook) (83-88). The following study questions will help:

  1. Considering the data supplied for arrival and service times, how would you calculate an average arrival rate and service rate?
  2. As Mr. Craig, what characteristics of this queuing system would you be most interested in observing?
  3. What is the best number of tellers to use?
  4. Calculate the waiting time for a customer (time spent in the queue before service) and determine which of the two line configurations you would recommend? Support your result with the appropriate quantitative queuing analysis.
  5. Homework #8: Pick up a copy of Homework #8. It is due on December 13.

Dec 8 SESSION   26: AN INTRODUCTION TO SIMULATION

  1. Read Quantitative Module F in H&R on simulation (p. 785-796 in H&R) (795-805)
  2. Discussion questions 1,2,4,5,7,10,11,12 and 13 H&R (p. 796) (810)
  3. Prepare problem F.1 H&R (p. 800)  (810).

Dec 13    SESSION 27: USE OF SIMULATION AS A PROBLEM SOLVING TOOL  FOR OPERATING SYSTEMS

  1. Consider the First City National Bank case again, available on Blackboard or (p.85-91 in Casebook) (83-88). By hand, simulate and submit 25 arrivals (track them through the bank) using the inter-arrival time distribution and service time distribution given in the case, with three tellers, for each of the two line arrangements. Identify assumptions that are necessary?
  2. Consider the First City National Bank case again. What are the advantages of using simulation to study this operation? What are the limitations?
  3. Which alternative arrangement of teller lines should Mr. Craig select based on the simulations?
  4. Homework #8 is due.

Dec 15   SESSION    28: REVIEW OF COURSE MATERIAL

Dec 22  FINAL EXAM - 4:00-5:50 pm

 

Required Course Materials

 

CUSTOM TEXT:      COMPETITIVE ADVANTAGE FROM OPERATIONS, Pearson Custom Publishing; 2006.

COMPUTER SOFTWARE: NYU Software Packages,  EXCEL

HARVARD CASES (Avaialbe on XanEdu):

  • BENIHANA OF TOKYO
  • KRISTEN'S COOKIE CO.
  • DONNER COMPANY
  • BLANCHARD IMPORTING AND DISTRIBUTING COMPANY, INC.
  • L.L. BEAN, INC.

OTHER MATERIAL (Available on Blackboard)

  • TERMS USED IN OPERATIONS MANAGEMENT
  • ANALYSIS OF OPERATIONS
  • FCN SECURITIES DEMO (A), (B) AND (C)
  • NETWORK CASES
  • FORD-FIRESTONE CASE
  • WAITING LINE MANAGEMENT  TABLE
  • FIRST CITY NATIONAL BANK
  • SOUTH TREE ELECTRONICS
  • XENON

RECOMMENDED READING

THE GOAL, Third Edition (Buy in Bookstore), Eliyahu M. Goldratt and Jeff  Cox, North River Press, Inc. 2004.

 

Assessment Components

To be completed before publishing.

 

Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.

 

Grading

Class Participation, Attendance, Quizzes     10% 

Homework                                                    15%

Mid-Term Examination I                                25%

Mid-Term Examination II                               25%

Mid-Term Examination III                              25%

A note about grading:

At NYU Stern we seek to teach challenging courses that allow students to demonstrate differential mastery of the subject matter. Assigning grades that reward excellence and reflect differences in performance is important to ensuring the integrity of our curriculum.

In core courses, our faculty have adopted a standard of rigor for teaching where:

Note that while we use these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well each of you actually performs in this course.

Please see www.stern.nyu.edu/undergraduate/grading for “Teaching and Grading at the NYU Stern Undergraduate College” for more information.

 

Re-Grading

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

 

Participation

In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:

 

Assignments

 

Classroom Norms

 

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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