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ISOM2700 Operations Management Spring 2015

Department of Information Systems, Business Statistics and Operations Management

COURSE: ISOM2700 Operations Management (3-0-0:3)

Production and service operations viewed from the strategic, tactical and operational levels: capacity planning, process selection, impact of technology, location and layout, material and resource requirements, scheduling and quality control. Exclusion: ISOM2720 and IELM4100

Spring 2015 L1: Tuesday, Thursday 10:30 – 11:50 a.m., Room 4620 L2: Tuesday, Thursday 01:30 – 02:50 p.m., Room 3008

INSTRUCTOR: Prof. Ronald Lau (rlau@ust.hk) Office: LSK-4081 Phone: 2358-8348

Office hours: Tuesday, Thursday 03:00 – 06:00 p.m.

TEACHING Penny Chu (imcpl@ust.hk) ASSISTANT: Office: LSK-4062 Phone: 2358-5728 TEXTS: For reference only:

1. Jacobs and Chase, Operations and Supply Management, The Core, McGraw-Hill, 2012.

2. Slack et.al, Operations and Process Management, Prentice Hall, 2014.

GRADING Final course grade will be determined by the following criteria and POLICY: point distribution:

Participation 20 Group case assignments 10 Group project 10 Midterm exam 30 Final exam 30

Total 100

Exam: The midterm covers only modules 1 and 2 while the final exam covers only modules 3 and 4. The exam consists of 60 multiple choice questions and lasts 2 hours each. No makeup will be given for the midterm exam. If you miss the midterm exam for a valid reason approved by the instructor, you will have to take a 3-hour, comprehensive final exam instead. Participation: Your participation points are primarily determined by:

Attending class and completing in-class activities (max 1 point per week)

Completing online graded quizzes and/or participating actively in online discussions (max 1 point per week)

Attending OM seminars or events (additional 1 bonus point each, max 2 bonus points for the term, watch for the announcement)

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To ensure that you show your effort evenly, the maximum participation will be 2 points (excluding bonus points) per week and 20 points for the entire term. Points earned (for online discussion) during the weekend or holiday will be counted within the same week. A week is defined using the HKUST calendar, from Sunday to Saturday. After the drop/add period, we will assign you into a group of five students to work on the case assignments and the class project. Case Assignments: For the case assignments, each group member should study the case individually and then get together to discuss it and complete a one to two pages case write-ups. All members will then elect a group representative to submit the case write-up (about 1-2 pages in length, with names of all participating members) before the case is discussed in class. To ensure all group members contribute evenly to the completion of the case write-up, please let us know in your submission if there is any issue about the contribution of individual members. See the sample peer evaluation form below for reference.

Project: The purpose of the class project is to help deepen your understanding of any OM concepts or practices of your choice. The basic format of the project is to produce a short video presentation (about 3 minutes) and a short paper (about 2-3 pages in length) to elaborate any concepts you learn in this class or other relevant topics in OM. The group representative will need to submit the video by May 10, 2015. Late submission of the project will not be accepted. More guidance for the project will be provided after the mid-term exam. To ensure all group members contribute evenly to the completion of the group project, an intra-group evaluation will be carried out on the request of the group majority. Otherwise, we assume each team

Name of Evaluator: ____________________________________

Instructions: Write the names of each member in your group, including yourself (for reference only), in the boxes in the first column. Using the key that follows, circle the number that represents your opinion on your and other group member's performance on each item.

Scale: 3=Outstanding 2=More than satisfactory 1=Satisfactory 0=Less than satisfactory

Group Members (Listed by name)

Worked cooperatively to complete assignments

Attended and participated in meetings

Supported and respected other members' efforts and opinions

Prepared adequately for meetings

Made substantial contributions to group's understandings - shared ideas, resources, information

0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3

0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3

0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3

0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3

0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3 0 1 2 3

Additional Comments:

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member contribute about equally in completing the project. See the sample evaluation form for details.

COURSE GRADE In determining the final course grade, your instructor will consider the DISTRIBUTION: grade distribution of all ISOM 2700 classes taught by other instructors and the recommended grade distribution at HKUST, i.e.,

A 10% - 20% B 25% - 40% C 35% - 45% D 5% - 10% F 0% - 5%

INTENDED This course is designed in such a way that, after completing it, you will LEARNING be able to: OUTCOMES:

1. Describe the design and delivery of product/service in different organizations, and evaluate the systems for measurement and improvement of operations. [1,4]

2. Identify and select crucial variables and measurements in decision modeling. [1]

3. Identify and describe operations management as one of the core business functions. [3]

4. Integrate operations management with other business functions to support a coherent corporate strategy. [3]

5. Determine how operation management decisions impact other business functions. [3]

6. Identify a wide range of contemporary and pervasive global business issues, as well as cultural and technology advancement that impact the management of operations. [4, 6]

7. Apply a range of appropriate quantitative and qualitative methods and tools to solve business problems in which the management of operations is a critical issue. [4,7]

8. Discuss the role of operations management in sustainability and social responsibility. [8]

The numbers at the end of each learning goal correspond to those learning goals and objectives for the BBA-OM Program. For details, please visit the BBA-OM web site at http://ihome.ust.hk/~bbaom/.

TEACHING The general teaching approach is lecturing, case discussions, as well APPROACH: as problem solving with demonstrations in the classroom. Lecture notes, additional reading materials, and learning resources are posted on the course web (https://canvas.ust.hk/courses/433). Students are expected to attend all classes and raise questions during lectures when necessary.

ACADEMIC Students at HKUST are expected to observe the Academic Honor INTEGRITY: Code at all times (see http://www.ust.hk/vpaao/integrity/ for more

information). Zero tolerance is shown to those who are caught cheating on any exam. Any act of cheating in this course will result in a XF grade for the course. This XF grade will stay with your record until graduation. If you receive another XF or X grade, you will be dismissed from the University.

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Module 1: Operations management involves four major groups of activities: (1) Directing

the overall strategy of the operation, (2) Designing the products, services, and processes, (3) Planning and controlling of the execution, and (4) Making the improvement sustainable. In this module, you will learn the strategic purpose of operations management in an organization and how this strategic purpose will influence the detailed design of both manufacturing and service operations. [Theme: Strategic Planning and Decisions]

February 3

Introduction Importance of operations in organizations Operations management: Why should you care?

February 5

Operations Strategy Strategic planning hierarchy Competitive dimensions, order qualifier vs order winner Operations frontier and tradeoffs

February 10, 12

Strategic Issues of Supply Chain Design Global supply chain and logistical issues, bullwhip effect Sourcing decision, vertical integration, and mass customization Supply chain architecture and process model Strategic Issues of Process Design Product attributes and process competencies Product-process matrix, different process designs Process choices, break even analysis Process performance metrics

February 17

Group Work Day Class attendance is required (1 participation point) Meet other members in the group Work on the Cathay Pacific (A) case Develop ideas for the group project

February 24, 26,

Resource Allocation Decisions Decision tree method with financial criteria Product mix decisions with the linear programming technique

Case Discussion Cathay Pacific

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Module 2: In this module, you will learn how to design and analyze the process flow and

related issues to achieve the effectiveness and efficiency of both manufacturing and service operations. [Theme: Managing business process flows]

March 3, 5

Process Flow Measures Key measures: Flow time, flow rate, inventory, takt time, inventory

turns, and utilization, etc. Little’s Law Linking operational to financial metrics

March 10, 12

Flow Time Analysis Process flow charts Flow time and critical paths Improving flow time efficiency

Applications Line balancing problems with the heuristics approach Project scheduling problems with the critical path method

March 17, 19

Flow Rate and Capacity Analysis Resource and effective capacity Bottleneck and throughput improvement Managing Waiting Lines Psychology of waiting Concepts and applications of waiting line models and simulation

Case Discussion Fat Angelo’s Italian Restaurant

Mid-term exam (for modules 1 and 2 only, 60 questions, 2 hours,

March 20, Friday, 7:30-9:30 pm)

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Module 3: In this module, you will learn how different decision models and optimization

tools can help you make a better decision in managing the demand, capacity, inventory, and resources. [Theme: Synchronizing Supply and Demand]

March 24

Group Work Day Class attendance is required (1 participation point) Finalize the group project idea Assign responsibility to each group member to complete the

project

March 26 March 31

Demand Management and Forecasting Approaches to demand forecasting Basic quantitative and time series forecasting models Forecasting errors

Case Discussion Chinese Pharmaceuticals

April 2 April 9

Inventory Management Inventory classification and cycle counting Basic inventory models: Order quantity and reorder point Assumptions and applications of basic inventory models

April 14, 16

Managing Supply for Short Life Cycle Products The newsvendor problem Revenue Management Incentives, reservation, overbooking, and dynamic pricing Case Discussion Arome Bakery

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Module 4: To ensure that any competitive advantage achieved is sustainable, an

organization must continue to develop and improve its operational effectiveness and capability over time. In this module, you will learn how the operations function plays the most important role in quality and process improvement as well as corporate social responsibility and sustainability. [Theme: Process improvement and quality management]

April 21, 23

Quality Management Concepts of TQM, quality control, and six sigma Quality awards and standards

Statistical Quality Control Acceptance sampling plan Process control charts Capability index

April 28, 30

Process Improvement Quality and capability focus Process design and change focus System constraints and resource utilization focus Operational risk and compliance focus

Benchmarking for Improvement Balanced scorecard Data envelopment analysis (DEA)

May 5, 7

Lean Synchronization Basic elements and work practices of just in time Implementation issues of just in time system Sustainability Issues of Business Operations Roles of OM in social responsibility and sustainability issues

Case Discussion Trade Without Borders

Final exam (for modules 3 and 4 only, 60 questions, 2 hours,

except for those who need to take the 100-quesiton comprehensive exam for 3 hours, exact time and venue to be announced)

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Case Analysis Grade Sheet

Group: ____

Evaluation summary (20 points each for each criterion for a total of 100 points)

Scoring rubrics

Well exceed expectation (19-20)

Exceed expectation (17-18)

Meet expectation (12-16)

Below expectation (0-11)

Score

Identification of the main issues and/or problems

Identify and understand completely all the main issues and problems

Identify and understand most of the main issues and problems

Identify and understand some of the main issues and problems

Identify and understand only few of the main issues and problems

Analysis of the issues

Insightful and thorough analysis of all the issues

Thorough analysis of most of the issues

Superficial analysis of some of the issues

Incomplete analysis of the issues

Comments on effective solutions or business practices

Well identified, reasoned and appropriate comments or proposal on solutions to all issues

Appropriate, well thought-out comments on solutions or proposal for solutions to most issues

Superficial and/or inappropriate solutions to some of the issues

Little or no action suggested, and/or inappropriate solutions to the issues

Make use of additional research or course learning materials

Excellent research into the issues with clearly documented links

Good research and documented links

Limited research and documented links

Incomplete research and links

Use of language

Free of any grammatical or spelling error; good choice of words

A few grammatical or spelling errors; should have better choice of words

Some grammatical or spelling errors

Lots of grammatical or spelling errors

Total: Use the following ranges to reflect the overall performance. 96-100 (exceptional report writing and extremely effective); 90-95 (very good report writing and very effective); 80-89 (good and effective); 70-79 (acceptable and somewhat effective); 69 or below (weak and not effective).

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EVALUATION FORM FOR THE GROUP PROJECT’S VIDEO PRESENTATION Group: ____ Project title: ________________________________________________________ Evaluation criteria (max 20 points each criterion for a total of 100 points)

Subject matter: Interesting, relevant topic; well researched materials; clear purpose with a thoughtful conclusion

Contents: Main points are well organized and developed; informative and accurate content; have a clear focus; clear introduction and conclusions; insightful and practical implications

Visual effects: Visual aids / slides are creative; clear and easy to read and understand; enhance the effectiveness of the presentation; free of obvious misspellings or typos

Presentation skills: Professional; comfortable and confident; good verbal and non-verbal (if appear in person) communication; flow and pace is consistently appropriate; good command of language; appropriate voice volume and tone

Audience control: Enthusiastic; use the unexpected to full advantage; hold the audience’s attention throughout; finish within the allotted time (15 minutes); overall quality of video effects

Total: Use the following ranges to reflect the overall performance. 96-100 (exceptional presentation and extremely effective); 90-95 (very good presentation and very effective); 80-89 (good and effective); 70-79 (acceptable and somewhat effective); 69 or below (weak and not effective).

Assessment rubric

Exemplary Above expectation

Meet expectation

Below expectation

Not acceptable

Points 19-20 17-18 15-16 13-14 0-12

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EVALUATION FORM FOR THE GROUP PROJECT’S WRITTEN REPORT Group: ____ Project title: ________________________________________________________ Evaluation summary (max 10 points each criterion for a total of 100 points)

Choice of Topic Relevance, importance and timeliness

Originality

Use of Language Grammar and punctuation

Spelling and choice of word

Content Organization, flow, clarity, and completeness

Professionalism and effective writing style

Mastery of the subject, insights and new discovery

Research and quality of information

Proper citations, references, and documentation

Conclusion or implications

Significance and practicality

Total: Use the following ranges to reflect the overall performance. 95-100 (exceptional report writing and extremely effective); 88-94 (very good report writing and very effective); 80-87 (good and effective); 70-79 (acceptable and somewhat effective); 69 or below (weak and not effective).

Assessment rubric

Exemplary Above expectation

Meet expectation

Below expectation

Not acceptable

Points 10 9 7-8 5-6 0-4