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OPERATIONS MANAGEMENT

F i f t h E d i t i o n

Jay Heizer Jesse H. Jones Professor of Business Administration Texas Lutheran University

Barry Render Charles Harwood Professor of Operations Management Crummer Graduate School of Business Rollins College

I Prentice Hall i 1

I Upper Saddle River, New Jersey 07458

Aß OUT THE AUTHORS vi

FOREWORD BY PHILIP E. CROSBY ix

PREFACE xxi

1. Operations and Productivity 1 Global Company Profile: Whirlpool 2

What Is Operations Management? 4

The Heritage of Operations Management 4

Why Study OM? 6

What Operations Managers Do 7

How This Book Is Organized 8 Organizing to Produce Goods and Services 8 Where Are the OM Jobs? 10 Exciting New Trends in Operations Management 11 Operations in the Service Sector 12

Differences between Goods

and Services 12

Growth of Services 14

Service Pay 16

The Productivity Challenge 16

Productivity Measurement 17

Productivity Variables 19

Productivity and the Service Sector 22

The Challenge of Social Responsibility 23

Summary 24 • Key Terms 24 • Solved Problems 24 • Discussion Questions 25 • Critical Thinking Exercise 26 • Problems 26 Case Study: National Air Express 28 • Bibliography 29 • Internet Resources 29

2. Operations Strategy for Competitive Advantage 31 Global Company Profile: Komatsu 32

Identifying Missions and Strategies 34

Mission 34

Strategy 36 Achieving Competitive Advantage Through Operations 36

Competing on Differentiation 36

Competing on Cost 37

Competing on Response 37

Ten Decisions of OM 39

Issues in Operations Strategy 42

Research 42

Preconditions 43

Dynamics 43 Strategy Development and Implementation 44

Identify Critical Success Factors 45 Build and Staffthe Organization 47 Summary 47 • Key Terms 47 • Solved Problem 48 • Discussion Questions 48 • Critical Thinking Exercise 48 • Problems 49 • Case Study: Minit-Lube, Inc. 49 • Case Study: Global Strategy at Motorola 50 • Video Case 1: Strategy at Regal Marine 51 • Internet Case Study 51 • Bibliography 51 • Internet Resources 52

3. Operations in a Global Environment 53

Global Company Profile: Boeing 54

Defining Global Operations 57

Globalization ofProduction 59

Why Global Operations Are Important 59

xii C O N T E N T S

Achieving Global Operations 62 Global Product Design 62

Global Process Design and Technology 63

Global Facility Location Analysis 63

Impact ofCulture and Ethics 66

Global Issues in Service Operations 67

Managing Global Service Operations 68 Summary 68 • Key Terms 69 * Using POMfor Windows for Location Analysis 69 • Using Excel OM to Solve Location Problems 69 • Discussion Questions 70 • Critical Thinking Exercise 71 • Problems 71 • Case Study: Ford and Mazda Share the Driver's Seat 73 • Bibliography 74 • Internet Resources 74

PART TWO DESIGNING OPERATIONS

4. Managing Quality 75

Global Company Profile: Motorola 76 Quality and Strategy 78 Defining Quality 79

Other Implications of Quality 80

International Quality Standards 80

Japan's Industrial Standard 80

Europe'slSO 9000 Standard 81

Environmental Management Standard 82

U.S. Standards 82

Total Quality Management 82

Continuous Improvement 83

Employee Empowerment 83

Benchmarking 84

Just-in-Time (JIT) 85

Knowledge ofTQM Tools 86

Tools ofTQM 86

Quality Function Deployment (QFD) 86

Taguchi Technique 89

Pareto Charts 90

Process Charts 91

Cause-and-Effect Diagram 92

Statistical Process Control (SPC) 92

The Role of Inspection 93

When and Where to Inspect 95

Source Inspection 96

Service Industry Inspection 96

Inspection of Attributes vs. Variables 96

Total Quality Management in Services 97

Summary 99 • Key Terms 99 • Discussion Questions 100 • Critical Thinking Exercise 100 • Problems 100 • Case Study: Westover Electrical, Inc. 102 • Case Study: Quality Cleaners 104 • Video Case 2: Quality at the Ritz-Carlton Hotel Company 105 * Internet Case Study 106 • Bibliography 106 • Internet Resources 106

Supplement 4: Statistical Process Control 107

Statistical Process Control (SPC) 108 Control Charts for Variables 110

The Central Limit Theorem 111

Setting Mean Chart Limits (x-Charts) 113

Setting Range Chart Limits (R-Charts) 115

Using Mean and Range Charts 115

Control Charts for Attributes 117

Process Capability 121

Acceptance Sampling 123

Operating Characteristic Curve 123 Average Outgoing Quality 125 Summary 126 • Key Terms 126 • Using POM for Windows 126 • Using Excel OM for SPC 127 • Solved Problems 128 * Discussion Questions 130 • Problems 130 • Data Base Application 133 • Case Study: Bayfield Mud Company 135 • Case Study: SPC at the Gazette 136 • Internet Case Study 137 • Bibliography 137 • Internet Resources 138

5. Forecasting 139

Global Company Profile: Tupperware Corporation 140 What Is Forecasting? 142

Forecasting Time Horizons 142

The Influence of Product Life Cycle 143

Types of Forecasts 143 The Strategie Importance of Forecasting 143

Human Resources 144

Capacity 144

Supply-Chain Management 144

C O N T E N T S X l l l

Seven Steps in the Forecasting System 144 Forecasting Approaches 145

Overview of Qualitative Methods 145

Overview of Quantitative Methods 146

Time-Series Forecasting 147

Decomposition of a Time Series 147

Naive Approach 148

Moving Averages 148

Exponential Smoothing 151

Exponential Smoothing with Trend Adjustment 155

Trend Projections 158

Seasonal Variations in Data 161 Causal Forecasting Methods: Regression and Correlation Analysis 163

Using Regression Analysis to Forecast 163

Standard Error ofthe Estimate 165

Correlation Coefficients

for Regression Lines 167

Multiple-Regression Analysis 168

Monitoring and Controlling Forecasts 170 Adaptive Smoothing 172

Focus Forecasting 172

The Computer' s Role in Forecasting 172

Forecasting in the Service Sector 172

Summary 173 • Key Terms 174 • Using POM for Windows in Forecasting 174 • Using Excel Spreadsheets in Forecasting 174 • Solved Problems 177 - Discussion Questions 179 • Critical Thinking Exercise 179 • Problems 179 • Data Base Application 187 • Case Study: North-South Airline 188 • Case Study: Akron Zoological Park 189 * Internet Case Study 189 • Bibliography 190 • Internet Resources 190

6. Design of Goods and Services 191

Global Company Profile: Regal Marine 192 Goods and Services Selection 194

Product Strätegy Options 194

Generation ofNew Product Opportunities 195

Product Life Cycles 196

Life Cycle and Strafe gy 198

Environmental^ Friendly Products 199

Product Development 200 Product Development System 200

Organizing for Product Development 201

Manufacturability and Value Engineering 202 Issues for Product Development 203

Robust Design 204

Time-Based Competition 204

Modular Design 204

Computer-Aided Design (CAD) 205

Value Analysis 206

Product-by-Value Analysis 206 Defining the Product 207

Make-or-Buy Decisions 209

Group Technology 209 Documents for Production 210 Service Design 211

Documents for Services 213 Application of Decision Trees to Product Design 215 Transition to Production 217

Summary 217 • Key Terms 217 • Solved Problems 218 • Discussion Questions 218 • Critical Thinking Exercise 218 • Problems 218 • Case Study: De Mar's Product Strategy 221 • Case Study: GE's Rotary Compressor 222 • Video Case 3: Product Design at Regal Marine 223 • Bibliography 224 • Internet Resources 224

7. Process Strategy and Capacity Planning 225

Global Company Profile: Nucor 226

Three Process Strategies 228 Process Focus 229

Repetitive Focus 230

Product Focus 232

Comparison of Process Choices 233

Process Analysis and Design 235

Flow Diagrams 236

Process Charts 236

Time-Function Mapping 237

Work-Flow Analysis 237

Process Reengineering 239

Moving toward Lean Production 239

Service Process Strategy 241 Service-Sector Considerations 241

Customer Interaction and Process Strategy 242

xiv C O N T E N T S

More Opportunities to Improve Service Processes 243

Selection of Equipment and Technology 244 Environmental Issues 245 Capacity 246

Defining Capacity 246

Forecasting Capacity Requirements 247

Applying Decision Trees

to Capacity Decisions 249

Managing Demand 250

Break-Even Analysis 251 Single-Product Case 254

Multiproduct Case 255

Strategy-Driven Investments 257 Investment, Variable Cost, and Cash Flow 257

Net Present Value 258

Summary 261 • Key Terms 261 • Using Excel OMfor Break-Even Analysis 262 • Solved Problems 263 • Discussion Questions 263 • Critical Thinking Exercise 264 • Problems 264 • Case Study: Matthew Yachts, Inc. 268 • Video Case 4: Process Strätegy at Wheeled Coach 269 • Bibliography 270 • Internet Resources 270

Supplement 7: State-of-the-Art Technology in Operations 271

Design Technology 272

Computer-Aided Design (CAD) 273

Standard for the Exchange ofProduct Data

(STEP) 273

Computer-Aided Manufacturing (CAM) 274

Virtual Reality Technology 274

Production Technology 275 Numerical Control 275

Process Control 275

Vision Systems 276

Robots 276

Automated Storage and Retrieval System

(ASRS) 277

Automated Guided Vehicle (AGV) 278

Flexible Manufacturing System (FMS) 278

Computer-Integrated Manufacturing (CIM) 279

Technology in Services 280 Information Sciences in Operations 281

Transaction Processing 281

Management Information System (MIS) 282

The Internet 282 Artificial Intelligence 283

Managing Technology in a Global Environment 284

Summary 286 • Key Terms 286 « Discussion Questions 286 • Problems 287 • Case Study: Rochester Manufacturing Corporation 287 • Bibliography 288 • Internet Resources 288

8. Location Strategies 289

Global Company Profile: Federal Express 290 The Strategie Importance of Location 292 Factors That Affect Location Decisions 293

Labor Productivity 294

Exchange Rates 296

Costs 296

Attitudes 296

Proximity to Markets 297

Proximity to Suppliers 297 Methods of Evaluating Location Alternatives 298

The Factor-Rating Method 298

Locational Break-Even Analysis 300

Center-of-Gravity Method 301

Transportation Model 303

Service Location Strategy 304

How Hotel Chains Select Sites 305

The Telemarketing and Internet Industries 306

Geographie Information Systems 306

Summary 307 • Key Terms 308 • Using POM for Windows 308 • Using Excel OM to Solve Location Problems 308 • Solved Problems 309 • Discussion Questions 311 • Critical Thinking Exercise 311 • Problems 312 • Data Base Application 315 • Case Study: Southern Recreational Vehicle Company 317 • Internet Case Study 318 • Bibliography 318 • Internet Resources 318

9. Layout Strategy 319

Global Company Profile: Pittsburgh International Airport 320 The Strategie Importance of Layout Decisions 322

C O N T E N T S XV

Types of Layout 322 Fixed-Position Layout 323 Process-Oriented Layout 325

Expert Systems in Layout 331

Work Cells 331

The Focused Work Center

and the Focused Factory 333

Office Layout 334 Retail Layout 336 Warehousing and Storage Layouts 337

Cross-Docking 338

Random Stocking 338

Customizing 339

Repetitive and Product-Oriented Layout 339 Assembly-Line Balancing 341

Summary 345 • Key Terms 345 • Using POM for Windows for Layout Design 346 • Solved Problems 348 « Discussion Questions 351 • Critical Thinking Exercise 352 • Problems 352 • Data Base Application 358 « Case Study: Des Moines National Bank 358 • Case Study: State Automobile License Renewals 360 • Video Case 5: Facility Layout at Wheeled Coach 361 • Internet Case Studies 362 • Bibliography 362 • Internet Resources 362

10. Human Resources and Job Design 363

Global Company Profile: Lucent Technologies 364 Human Resource Strategy for Competitive Advantage 366

Constraints on Human Resource Strategy 366

Labor Planning 367

Employment-Stability Policies 367

Work Schedules 368

Job Classification and Work Rules 369

Job Design 369 Labor Specialization 369

Job Expansion 370

Psychological Components

of Job Design 371

Self-Directed Teams 372

Motivation and Incentive Systems 374

Ergonomics and Work Methods 375

The Visual Workplace 381

Labor Standards 383

Summary 383 • Key Terms 383 • Solved Problems 384 • Discussion Questions 386 • Critical Thinking Exercise 386 • Problems 386 • Case Study: The Fleet That Wanders 387 • Case Study: Lincoln Electric's Incentive Pay System 388 • Bibliography 389 • Internet Resources 389

Supplement 10: Work Measurement 391

Labor Standards and Work Measurement 392

Historical Experience 393 Time Studies 393

Predetermined Time Standards 398 Work Sampling 400

Summary 403 • Key Terms 403 • Solved Problems 403 • Discussion Questions 406 * Problems 406 • Case Study: Telephone Operator Standards at AT&T 411 • Bibliography 412 • Internet Resources 412

PART THREE MANAGING OPERATIONS

11. Supply-Chain Management 413 Global Company Profile: Volkswagen 414 The Strategie Importance of the Supply Chain 416

Global Supply-Chain Issues 417

Purchasing 418 Manufacturing Environments 419

Service Environments 419

Make-or-Buy Decisions 419

Supply-Chain Strategies 420

Many Suppliers 420

Few Suppliers 421

Vertical Integration 422

Keiretsu Networks 423

Virtual Companies 423

Vendor Selection 425

Vendor Evaluation 425

Vendor Development 426

Negotiations 426

xvi C O N T E N T S

Managing the Supply Chain 427 Materials Management 429

Distribution Systems 430

Benchmarking Supply-Chain Management 431 Summary 431 • Key Terms 432 » Discussion Questions 432 • Critical Thinking Exercise 432 • Problems 432 • Case Study: Factory Enterprises, Inc. 433 • Case Study: Thomas Manufacturing Company 434 * Video Case 6: Supply Chain Management at Regal Marine 435 • Internet Case Studies 436 • Bibliography 436 • Internet Resources 436

12. Inventory Management 437

Global Company Profile: Harley-Davidson 438 Functions of Inventory 440

Types of Inventory 440

Inventory Management 441

ABC Analysis 441

Record Accuracy 443

Cycle Counting 444

Control of Service Inventories 444

Inventory Models 446

Independent versus Dependent Demand 446

Holding, Ordering, and Setup Costs 446 Inventory Models for Independent Demand 447

The Basic Economic Order Quantity (EOQ) Model 447

Minimizing Costs 447

Reorder Points 453 Production Order Quantity Model 454 Quantity Discount Models 457

Probabilistic Models with Constant Lead Time 460 Fixed-Period Systems 464

Summary 465 • Key Terms 466 • Using POM for Windows to Solve Inventory Problems 466 • Using Excel OMfor Inventory 466 • Solved Problems 469 * Discussion Questions 471 • Critical Thinking Exercise 471 • Problems 471 • Case Study: Sturdivant Sound Systems 476 • Case Study: LaPlace Power and Light 476 • Video Case 7: Inventory Control at Wheeled Coach 477 • Internet Case Studies 477 ' Bibliography 478 • Internet Resources 478

Supplement 12: Just-in-Time Systems 479 Just-in-Time Philosophy 480 Suppliers481

Goals ofJIT Partnerships 483

Concerns of Suppliers 484

JIT Layout 485 Distance Reduction 485

Increased Flexibility 486

Impact on Employees 486

Reduced Space and Inventory 486

Inventory 486

Reduce Variability 487

Reduce Inventory 487

Reduce Lot Sizes 488

Reduce Setup Costs 489

Scheduling 490

Level Material-Use Schedules 490

Kanban 490

Quality 493

Employee Empowerment 493 JIT in Services 494

Summary 495 • Key Terms 495 • Solved Problems 495 • Discussion Questions 496 • Problems 496 • Case Study: Electronic Systems, Inc. 498 • Bibliography 499 • Internet Resources 499

13. Aggregate Scheduling 501

Global Company Profile: Anheuser-Busch 502 The Planning Process 504 The Nature of Aggregate Scheduling 505 Aggregate Planning Strategies 507

Capacity Options 508

Demand Options 509

Mixing Options to Develop a Plan 510

Methods for Aggregate Scheduling 511

Graphical and Charting Methods 511

Mathematical Approaches to Planning 516

Comparison of Aggregate

Planning Methods 518

Aggregate Scheduling in Services 518 Restaurants 519

Miscellaneous Services 520

C O N T E N T S X V I I

National Chains ofSmall Service Firms 520

Airline Industry 520

Hospitals 521

Summary 522 • Key Terms 522 • Using POM for Windows for Aggregate Planning 522 • Using Excel OM for Aggregate Planning 523 • Solved Problems 525 • Discussion Questions 527 • Critical Thinking Exercise 527 • Problems 527 • Data Base Application 532 • Case Study: Southwestern State College 532 • Internet Case Study 533 • Bibliography 534 • Internet Resources 534

14. Material Requirements Planning (MRP) 535

Global Company Profile: Collins Industries 536 Dependent Inventory Model Requirements 538

Master Production Schedule 539

Bills of Material 541

Accurate Inventory Records 544

Purchase Orders Outstanding 545

Lead Times for Each Component 545

MRP Structure 545 MRP Management 550

MRP Dynamics 550

MRP and JIT 550

Lot-Sizing Techniques 551 Extensions of MRP 555

Closed-Loop MRP 555

Capacity Planning 556

Material Requirements Planning II

(MRP II) 557

Enterprise Resource Planning (ERP) 558

MRP in Services 560 Distribution Resource Planning (DRP) 561

DRP Structure 562

Allocation 562

Summary 562 • Key Terms 563 • Using POM for Windows to Solve MRP Problems 563 • Solved Problems 565 • Discussion Questions 568 ' Critical Thinking Exercise 568 • Problems 568 • Data Base Application 573 • Case Study: Service, Inc. 574 • Case Study: Ruch Manufacturing 574 • Video Case 8: MRP at Wheeled Coach 575 • Bibliography 576 • Internet Resources 576

15. Short-Term Scheduling 577 Global Company Profile: Delta Airlines 578 The Strategie Importance of Short Term Scheduling 580 Scheduling Issues 580

Forward and Backward Scheduling 582

Scheduling Criteria 582

Scheduling Process-Focused Work Centers 583 Loading Jobs in Work Centers 584

Input-Output Control 584

Gantt Charts 585

Assignment Method 587

Sequencing Jobs in Work Centers 590

Priority Rulesfor Dispatching Jobs 590

Critical Ratio 594

Sequencing N Jobs on Two Machines:

Johnson s Rule 594 Limitations of Rule-Based Dispatching Systems 596 Finite Scheduling 596 Theory of Constraints 597

Bottleneck Work Centers 598 Repetitive Manufacturing 599 Scheduling for Services 601

Scheduling Nurses with Cyclical Scheduling 602

Summary 603 • Key Terms 604 • Using POM for Windows to Solve Scheduling Problems 604 • Using Excel OM for Short-Term Scheduling 605 • Solved Problems 607 • Discussion Questions 611 • Critical Thinking Exercise 611 • Problems 611 • Data Base Application 616 • Case Study: Old Oregon Wood Store 617 • Bibliography 619 • Internet Resources 619

16. Project Management 621

Global Company Profile: Bechtel 622 The Strategie Importance of Project Management 624 Project Planning 625

The Project Manager 625

Work Breakdown Structure 626

Project Scheduling 627 Project Controlling 629

xviii C O N T E N T S

Project Management Techniques: PERT and CPM 629

The Framework ofPERT and CPM 629

Activities, Events, and Networks 630

Dummy Activities and Events 632

PERT and Activity Time Estimates 633

Critical Path Analysis 634

The Probability of Project Completion 638

Case Study ofPERT: Schwäre Foundry 639

Cost-Time Trade-Offs and Project Crashing 643

Applying Project Scheduling to Service Firnis 645 A Critique of PERT and CPM 646

Summary 647 • Key Terms 648 • Using POMfor Windows for Project Scheduling 648 ' Solved Problems 648 • Discussion Questions 652 • Critical Thinking Exercise 653 • Problems 653 • Data Base Application 659 • Case Study: Shale Oil Company 660 • Internet Case Studies 661 • Bibliography 661 • Internet Resources 662

17. Maintenance and Reliability 663

Global Company Profile: NASA 664 The Strategie Importance of Maintenance and Reliability 666 Reliability 667

Improving Individual Components 667

Providing Redundancy 670

Maintenance 671 Implementing Preventive Maintenance 671

Increasing Repair Capabilities 675

Total Productive Maintenance 675 Techniques for Establishing Maintenance Policies 676

Summary 676 • Key Terms 677 • Using POMfor Windows to Solve Reliability Problems 677 • Solved Problems 677 • Discussion Questions 678 • Critical Thinking Exercise 678 • Problems 679 • Case Study: Worldwide Chemical Company 681 • Internet Case Studies 682 • Bibliography 682 • Internet Resources 682

PART FOUR QUANTITATIVE MODULES

A. Decision-Making Tools 683

The Decision Process in Operations 684 Fundamentals of Decision Making 685 Decision Tables 686

Decision Making under Risk 686

Expected Value ofPerfect

Information (EVPI) 688

Decision Trees 689 A More Complex Decision Tree 690

Summary 692 • Key Terms 693 • Using POM for Windows to Solve Decision Table and Tree Problems 693 • Using Excel OM for Decision Models 694 • Solved Problems 695 • Discussion Questions 696 • Problems 696 « Case Study: Nigel Smythe's Heart Bypass Operation 700 • Internet Case Studies 701 • Bibliography 701

B. Linear Programming 703

Requirements of a Linear Programming Problem 705

Formulating Linear Programming Problems 706

Shader Electronics Example 706

Graphical Solution to a Linear Programming Problem 707

Graphical Representation of Constraints 707

Iso-Profit Eine Solution Method 708

Corner-Point Solution Method 711

Sensitivity Analysis 713 Solving Minimization Problems 714 Linear Programming Applications 716

Production-Mix Example 717

Diet Problem Example 718

Production Scheduling Example 718

Labor Scheduling Example 720

The Simplex Method of LP 722

Summary 722 • Key Terms 723 • Using POM for Windows to Solve LP Problems 723 • Using Excel Spreadsheets to Solve LP

C O N T E N T S XIX

Problems 724 • Solved Problems 725 • Discussion Questions 728 • Problems 729 • Data Base Application 735 • Case Study: Golding Landscaping and Plauts, Inc. 736 • Internet Case Studies 737 • Bibliography 737

C. Transportation Models 739 Transportation Modeling 740

Developing an Initial Solution:

The Northwest-Corner Rule 742

The Stepping-Stone Method 743

Special Issues in Modeling 748

Demand Not Equal to Supply 748

Degeneracy 748

Summary 750 • Key Terms 750 • Using POM for Windows to Solve Transportation Problems 750 • Using Excel OM to Solve Transportation Problems 751 • Solved Problems 752 • Discussion Questions 755 • Problems 755 • Data Base Application 760 • Case Study: Andrew-Carter, Inc. 761 • Internet Case Studies 762 • Bibliography 762

D. Waiting-Line Models 763 Queuing Costs 765

Characteristics of a Waiting-Line System 765

Arrival Characteristics 766

Waiting-Line Characteristics 767

Service Facility Characteristics 767

Measuring the Queue''s Performance 770

The Variety of Queuing Models 770

Model A: Single-Channel Queuing Model with Poisson Arrivals and Exponential Service Times 771

Model B: Multiple-Channel Queuing Model 774

Model C: Constant Service Time Model 776

Model D: Limited Population Model 777

Other Queuing Approaches 780

Summary 781 • Key Terms 781 • Using POM for Windows for Queuing 782 • Using Excel OMfor Queuing 782 • Solved Problems 783 • Discussion Questions 786 • Problems 786 • Case Study: New England Castings 790 • Case Study: The Winter Park Hotel 792 • Internet Case Study 793 • Bibliography 793

E. Learning Curves 795 Learning Curves in Services and Manufacturing 797 Applying the Learning Curve 798

Arithmetic Approach 799

Logarithmic Approach 799

Learning-Curve Coefficient Approach 800

Strategie Implications of Learning Curves 802

Summary 803 • Key Term 803 • Using POM for Windows for Learning Curves 803 • Using Excel OMfor Learning Curves 804 • Solved Problems 805 • Discussion Questions 806 • Problems 806 • Case Study: SMT's Negotiation with IBM 809 • Bibliography 810

F. Simulation 811 Whatls Simulation? 813

Advantages and Disadvantages of Simulation 813

Monte Carlo Simulation 815

Simulation of a Queuing Problem 818

Simulation and Inventory Analysis 820

The Role of Computers in Simulation 823

Summary 824 • Key Terms 824 • Using POM for Windows for Simulation 825 • Simulation with Excel Spreadsheets 825 • Solved Problems 827 • Discussion Questions 828 • Problems 829 • Case Study: Alabama Airlines 836 • Internet Case Studies 837 • Bibliography 837

APPENDIX I Normal Curve Areas and How to Use the Normal Distribution A2 APPENDIX II Poisson Distribution Values A5 APPENDIX III Values of e~x for Use in the Poisson Distribution A7 APPENDIX IV Table of Random Numbers A8 APPENDIX V Using POM for Windows and Excel OM A9 APPENDIX VI Solutions to Even-Numbered Problems A10

Name Index II General Index 17