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Production and Operations Analysis

Seventh Edition

The Seventh Edition of *Production and Operations Analysis* builds a solid foundation for beginning students of production and operations management. Continuing a long tradition of excellence, Nahmias and Olsen bring decades of combined experience to craft the most clear and up-to-date resource available. The authors' thorough updates include incorporation of current technology that improves the effectiveness of production processes, additional qualitative sections, and new material on service operations management and servicization. Bolstered by copious examples and problems, each chapter stands alone, allowing instructors to tailor the material to their specific needs. The text is essential reading for learning how to better analyze and improve on all facets of operations.

"This is one of the best operations management textbooks I have read in the last 28 years of teaching the course. It covers exactly the topics I deliver in one semester. Also, it has the right level of mathematical rigor." — Zhiwei Zhu, *University of Louisiana, Lafayette*

"This is the best operations management textbook I have ever seen in my 26-year academic career. Among its strengths are mathematical rigor, comprehensive coverage of all important topics, snapshots, and historical notes. Best of all, the price is very, very reasonable!" — Ching-Chung Kuo, *University of North Texas*

"Nahmias & Olsen's textbook has served our program well. However, the cost became too high. The reduced-cost version is an excellent move." — Chen Zhou, *Georgia Institute of Technology*

**1. Strategy and Competition**

Manufacturing Matters / A Framework for Operations Strategy / Competing in the Global Marketplace / Strategic Initiatives: Reengineering the Business Process / Strategic Initiatives: Just-in-Time / Strategic Initiatives: Time-Based Competition / Strategic Initiatives: Competing on Quality / Strategic Initiatives: Servicization / Matching Process and Product Life Cycles / Learning and Experience Curves / Capacity Growth Planning: A Long-Term Strategic Problem / Summary

**2. Forecasting**

The Time Horizon in Forecasting / Characteristics of Forecasts / Subjective Forecasting Methods / Objective Forecasting Methods / Notation Conventions / Evaluating Forecasts / Methods for Forecasting Stationary Series / Trend-Based Methods / Methods for Seasonal Series / Box-Jenkins Models / Practical Considerations / Overview of Advanced Topics in Forecasting / Historical Notes and Additional Topics / Summary / Appendix 2-A: Forecast Errors for Moving Averages and Exponential Smoothing / Appendix 2-B: Derivation of the Equations for the Slope and Intercept for Regression Analysis / Appendix 2-C: Glossary of Notation for Chapter 2

**3. Sales and Operations Planning**

The S&OP Process / Key Performance Indicators / The Role of Uncertainty / Aggregate Planning of Capacity / Solving Aggregate Planning Problems / Disaggregating Plans / Sales and Operation Planning on a Global Scale / Historical Notes / Summary / Appendix 3-A: Glossary of Notation for Chapter 3

**Supplement 1: Linear Programming**

Introduction / A Prototype Linear Programming Problem / Statement of the General Problem / Solving Linear Programming Problems Graphically / The Simplex Method: An Overview / Solving Linear Programming Problems with Excel / Interpreting the Sensitivity Report / Recognizing Special Problems / The Application of Linear Programming to Production and Operations Analysis

**4. Inventory Control Subject to Known Demand**

Types of Inventories / Motivation for Holding Inventories / Characteristics of Inventory Systems / Relevant Costs / The EOQ Model / Extension to a Finite Production Rate / Quantity Discount Models / Resource-Constrained Multiple Product Systems / EOQ Models for Production Planning / Power-of-Two Policies / Historical Notes and Additional Topics / Summary / Appendix 4-A: Mathematical Derivations for Multiproduct Constrained EOQ Systems / Appendix 4-B: Glossary of Notation for Chapter 4

**5. Inventory Control Subject to Uncertain Demand**

The Nature of Randomness / Optimization Criterion / The Newsvendor Model / Lot Size-Reorder Point Systems / Service Levels in (*Q, R*) Systems / Additional Discussion of Periodic-Review Systems / Multiproduct Systems / Overview of Advanced Topics / Historical Notes and Additional Readings / Summary / Appendix 5-A: Notational Conventions and Probability Review / Appendix 5-B: Additional Results and Extensions for the Newsvendor Model / Appendix 5-C: Derivation of the Optimal (*Q, R*) Policy / Appendix 5-D: Probability Distributions for Inventory Management / Appendix 5-E: Glossary of Notation for Chapter 5

**6. Supply Chain Management**

Supply Chain Strategy / The Role of Information in the Supply Chain / The Transportation Problem / Generalizations of the Transportation Problem / More General Network Formulations / Determining Delivery Routes in Supply Chains / Risk Pooling / Designing Products for Supply Chain Efficiency / Multilevel Distribution Systems / Incentives in the Supply Chain / Global Supply Chain Management

**7. Service Operations Management**

Service Operations Strategy / Flow Systems / Modeling Unscheduled Arrivals / Queueing Systems / General Queueing Models / The Human Element in Service Systems / Call and Contact Centers / Revenue Management / Historical Notes and Additional Readings / Summary / Appendix 7-A: Simulation Implementation

**Supplement Two: Queueing Techniques**

Details of the Poisson Process and Exponential Distribution / Analysis of the M/M/I Queue / Further Results for M/M Queues / Infinite Server Results / Queueing Networks / Optimization of Queueing Systems

**8. Push and Pull Production Control Systems: MRP and JIT**

The Explosion Calculus / Alternative Lot-Sizing Schemes / Incorporating Lot-Sizing Algorithms into the Explosion Calculus / Lot Sizing with Capacity Constraints / Shortcomings of MRP / JIT Fundamentals / A Comparison of MRP and JIT / JIT or Lean Production? / Historical Notes / Summary / Appendix 8-A: Optimal Lot Sizing for Time-Varying Demand / Appendix 8-B: Glossary of Notation for Chapter 8

**9. Operations Scheduling**

Production Scheduling and the Hierarchy of Production Decisions / Important Characteristics of Job Shop Scheduling Problems / Job Shop Scheduling Terminology / A Comparison of Specific Sequencing Rules / Objectives in Job Shop Management: An Example / An Introduction to Sequencing Theory for a Single Machine / Sequencing Algorithms for Multiple Machines / Stochastic Scheduling: Static Analysis / Stochastic Scheduling: Dynamic Analysis / Assembly Line Balancing / Historical Notes / Summary

**10. Project Scheduling**

Representing a Project as a Network / Critical Path Analysis / Time Costing Methods / Solving Critical Path Problems with Linear Programming / Pert: Project Evaluation and Review Technique / Resource Considerations / Organizational Issues in Project Management / Historical Notes / Project Management Software for the PC / Summary / Appendix 10-A: Glossary of Notation for Chapter 10

**11. Facilities Layout and Location**

The Facilities Layout Problem / Patterns of Flow / Types of Layouts / A Prototype Layout Problem and the Assignment Model / More Advanced Mathematical Programming Formulations / Computerized Layout Techniques / Flexible Manufacturing Systems / Locating New Facilities / The Single-Facility Rectilinear Distance Location Problem / Euclidean Distance Problems / Other Location Models / Historical Notes / Summary / Appendix 11-A: Finding Centroids / Appendix 11-B: Computing Contour Lines

**12. Quality and Assurance**

Statistical Basis of Control Charts / Control Charts for Variables: The *X* and *R* Charts / Control Charts for Attributes: The *p* Chart / The *c* Chart / Classical Statistical Methods and Control Charts / Economic Design of *X* Charts / Overview of Acceptance Sampling / Notation / Single Sampling for Attributes / Double Sampling Plans for Attributes / Sequential Sampling Plans / Average Outgoing Quality / Total Quality Management / Designing Quality into the Product / Historical Notes / Summary / Appendix 12-A: Approximating Distributions / Appendix 12-B: Glossary of Notation for Chapter 12 on Quality and Assurance

**13. Reliability and Maintainability**

Reliability of a Single Component / Increasing and Decreasing Failure Rates / The Poisson Process in Reliability Modeling / Failures of Complex Equipment / Introduction to Maintenance Models / Deterministic Age Replacement Strategies / Planned Replacement under Uncertainty / Analysis of Warranty Policies / Software Reliability / Historical Notes / Summary / Appendix 13-A: Glossary of Notation on Reliability and Maintainability