Ivey Publishing

Introduction to Operations Research

Hillier F., Lieberman G.,8/e (United States, McGraw Hill Irwin, 2007)
Prepared By Jorge Colazo, Ph.D. Candidate (Operations Management)
Chapter and Title Chapter Matches: Case Information
Chapter 1 & 2:
Introduction / Overview of the Operations Research Modeling Approach

LULULEMON ATHLETICA: PRIMED FOR GROWTH
Eric Morse, Ken Mark, Patrick A. Walsh

Product Number: 9B06M092
Publication Date: 10/25/2006
Revision Date: 9/23/2009
Length: 15 pages

The chairman and chief product designer of lululemon athletica is preparing to address an audience at an investor's conference. He describes lululemon's great success from 1998 to 2006 and analyses the growth opportunities it faces. This case helps students understand the concept of competitive advantage in relation to the functional and emotion marketing drivers. In addition, it underlines the importance of preserving brand equity and prioritizing strategic growth options.

Teaching Note: 8B06M92 (7 pages)
Industry: Manufacturing
Issues: Decision Theory; Decision Trees; Decision Support Systems; Decision Analysis
Difficulty: 4 - Undergraduate/MBA



BENCHMARKING AT ULJANIK SHIPYARD
David M. Currie, Giorgio Sinkovic

Product Number: 9B05D011
Publication Date: 4/26/2005
Revision Date: 9/28/2009
Length: 5 pages

A junior executive is given the task of calculating a benchmark common in the ship building industry - cost per compensated gross ton. Although raw data is available for its components, the executive must formulate relationships between the data to determine the benchmark. The case is designed to provide: 1) an introduction to the construction and use of benchmarks in quality management; 2) practice in conceptualizing a problem and designing a basic spreadsheet model to solve the problem. The modeling procedure uses an influence diagram as the basis for constructing the spreadsheet model, this spreadsheet model is available, product 7B05D011.

Teaching Note: 8B05D11 (9 pages)
Industry: Transportation and Warehousing
Issues: Quality Management; Spread Sheet Application; Models
Difficulty: 4 - Undergraduate/MBA



DAIKIN INDUSTRIES
Chris J. Piper, Tetsu Imigi

Product Number: 9B04D018
Publication Date: 8/10/2004
Revision Date: 10/9/2009
Length: 9 pages

The president of Daikin Industries Residential Air Conditioning Shiga Factory was confronted by the prospects of an unseasonably cold summer, at a time when the Shiga Factory had large quantities of its products in inventory in anticipation of strong summer sales. The president was concerned not only about pending losses in the current year, but also about the factory's long-term survival. Unprofitability was unacceptable and Daikin was caught in a stagnant market in which it was increasingly difficult to build share by product differentiation. The Shiga Factory had been forced to use large inventories to cope with uncertain demand and a long and unwieldy supply chain. The president must decide whether to reduce the number of models, build a lower-cost factory outside Japan, or exit the business. He must also determine if there are any other options.

Teaching Note: 8B04D18 (23 pages)
Industry: Manufacturing
Issues: Supply Chain Management; Inventory; Operations Strategy; Lead Time
Difficulty: 4 - Undergraduate/MBA


Chapter 3:
Introduction to Linear Programming

MARS INCORPORATED: ONLINE PROCUREMENT
Peter C. Bell

Product Number: 9B05E004
Publication Date: 1/31/2005
Revision Date: 9/28/2009
Length: 5 pages

Mars Inc., one of the world's largest privately owned businesses, purchased over $4 billion of materials annually, and was aware that many major firms were achieving savings of around five per cent through the use of online procurement auctions. The vice-president for Business Solutions at Mars wondered whether an online auction could be designed that would meet the special needs of the Mars company while enabling Mars to achieve the savings necessary to allow the company to prosper and grow in its highly competitive markets.

Teaching Note: 8B05E04 (7 pages)
Industry: Manufacturing
Issues: Supplier Relations; Purchasing; E-Commerce; Linear Programming
Difficulty: 4 - Undergraduate/MBA



PRODUCTION PLANNING AT VIKTOR LENAC SHIPYARD
David M. Currie, Giorgio Sinkovic

Product Number: 9B04D019
Publication Date: 11/23/2004
Revision Date: 5/18/2017
Length: 6 pages

An executive wonders if it is possible to increase profits by changing the mix of products at a shipyard. The yard currently operates below the breakeven point, so must achieve profitability or default on loan payments.

Teaching Note: 8B04D19 (6 pages)
Industry: Manufacturing
Issues: linear programming; spreadsheet application, strategy
Difficulty: 4 - Undergraduate/MBA



MACPHERSON REFRIGERATION LIMITED
John S. Haywood-Farmer, Bill Rankin

Product Number: 9A93D021
Publication Date: 10/2/1993
Revision Date: 9/9/2009
Length: 7 pages

Linda Metzler, newly-appointed production planning manager, is drafting an aggregate production plan for the company's refrigerators, freezers and air conditioners for the next year. She has considered three plans. Students are asked to devise better plans and to evaluate the quantitative and qualitative factors favouring them. Ultimately, the use of linear programming to construct aggregate plans will be introduced.

Teaching Note: 8A93D21 (13 pages)
Industry: Manufacturing
Issues: Aggregate Planning; Linear Programming; Tradeoff Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 4, 5,:
Solving Linear Programming Problems: The Simplex Method / The Theory of Simplex Method / Duality Theory and Sensitivity Analysis / Other Algorithms for Linear Programming

TALLINK: CONNECTING ESTONIA TO FINLAND, SWEDEN AND RUSSIA
Peter C. Bell, Jordan Mitchell

Product Number: 9B05E016
Publication Date: 10/28/2005
Revision Date: 9/30/2009
Length: 9 pages

The chairman of Tallink - a ferry and cargo service running between Estonia, Finland and Sweden - is considering purchasing a new ferry and redeploying older ferries among different routes. One of the proposed new routes is from Tallinn, Estonia through Helsinki, Finland to St. Petersburg in Russia. The chairman needs to decide whether or not he should buy the new ferry and the optimal use of his fleet.

Teaching Note: 8B05E16 (10 pages)
Industry: Transportation and Warehousing
Issues: Resource Allocation; Fleet Management; Linear Programming; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA



ACUSHNET CANADA INC.: THE BONDED WAREHOUSE INITIATIVE
Gregory S. Zaric, Ian Friedman

Product Number: 9B05E012
Publication Date: 9/22/2005
Revision Date: 9/30/2009
Length: 3 pages

Acushnet Canada Inc. is considering using Canada Customs Bonded Warehouses to store golf shoes, gloves, outerwear and club heads inventory purchased from overseas suppliers. ACI often has to procure inventory four to six months before they needs it in order to ensure they will be able to meet customer requirements during the busy season. The critical managerial issue is considering the tradeoff between the cash flow savings (through duty postponement) and the need to meet the demand schedule, while taking into account storage limitations imposed by the private facility and their storage costs. This case can be used as an introduction to linear programming as well as an introduction to the concept of bonded warehouses.

Teaching Note: 8B05E12 (5 pages)
Industry: Wholesale Trade
Issues: Inventory Planning/Control; Linear Programming; Spread Sheet Application; Procurement
Difficulty: 4 - Undergraduate/MBA



VYTEC CORPORATION: BALANCING SILO DEMAND
Peter C. Bell, James Van Brenk

Product Number: 9B03E010
Publication Date: 5/28/2003
Revision Date: 10/19/2009
Length: 4 pages

Vytec Corporation is a subsidiary of Owens Corning, and manufactures extruded vinyl residential siding. In order to maximize the quantity and quality of the product, the operations analyst had to decide how best to use the available silos and extruder. He must determine the best way to configure the extruders to their respective material silos in order to ensure that each silo faced a similar demand for material. An Excel spreadsheet containing data and solver solutions is available (product 5B03E10).

Teaching Note: 8B03E10 (5 pages)
Industry: Manufacturing
Issues: Linear Programming; Spread Sheet Application; Operations Analysis; Resource Allocation
Difficulty: 4 - Undergraduate/MBA



VYTEC CORPORATION: WAREHOUSE LAYOUT PLANNING
Peter C. Bell, James Van Brenk

Product Number: 9B03E013
Publication Date: 5/28/2003
Revision Date: 10/19/2009
Length: 4 pages

Vytec Corporation is a subsidiary of Owens Corning and is a leading manufacturer of vinyl siding. The operations analyst wanted to determine if there was a more efficient way to organize the company's warehouse. After finding some high demand products being stored a long distance from the shipping dock, his first reaction was to move the product closer to the shipping area, reducing the time and distance required to retrieve the product for shipping. Doing so, however, would displace another product that should also be near the docks. Further research into the problem revealed many other issues. Two files are available - the case data file, product 7B03E013 and the solver model 5B03E13.

Teaching Note: 8B03E13 (13 pages)
Industry: Manufacturing
Issues: Resource Allocation; Linear Programming; Spread Sheet Application; Operations Analysis
Difficulty: 4 - Undergraduate/MBA


Chapter 8:
The Transportation and Assignment Problems

NOTE ON THE CANADIAN TRANSPORTATION INDUSTRY
P. Fraser Johnson

Product Number: 9B06D003
Publication Date: 1/13/2006
Revision Date: 2/21/2012
Length: 15 pages

The principle objective of this note is to provide a Canadian perspective on transportation. The first section of the note deals with Canada's transportation network, providing an overview of the transportation services sector and the economic importance of transportation. The second section describes the characteristics of each of the six main modes of transportation: air, rail, truck, marine, pipeline and intermodal. The third section addresses the key challenges facing the transportation sector, including environmental and safety issues. The final section examines the role of government in Canada's transportation sector, including government policy.

Issues: Government Regulation; Supply Chain Management; Transportation; Logistics
Difficulty: 4 - Undergraduate/MBA



GROCERY GATEWAY: CUSTOMER DELIVERY OPERATIONS
P. Fraser Johnson

Product Number: 9B02D003
Publication Date: 3/28/2002
Revision Date: 1/17/2006
Length: 7 pages

As Canada's largest direct online grocer, Grocery Gateway provided home delivery to approximately 125,000 customers in the Greater Toronto area, which covered a territory of approximately 3,200 square kilometres. Grocery Gateway's management staff was concerned that the company had been met only 67 per cent of its target of making four deliveries per hour. Consequently, the vice-president of industrial engineering and operations had been asked to make some recommendations aimed at improving delivery operations. These recommendations would be presented at Grocery Gateway's next weekly management meeting. There are a number of options that were worth considering. The vice-president's job was to pinpoint those options and assess how each one might affect the company's existing operation. The final choice would have to reflect and maintain Grocery Gateway's focus on low cost and high service.

Teaching Note: 8B02D03 (8 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Transportation; Distribution; E-Business; Logistics
Difficulty: 4 - Undergraduate/MBA


Chapter 9:
Network Optimization Models

PROGISTIX-SOLUTIONS INC. - THE CRITICAL PARTS NETWORK
P. Fraser Johnson, Alison Woodcock

Product Number: 9B05D002
Publication Date: 1/28/2005
Revision Date: 9/28/2009
Length: 8 pages

The president and chief executive officer of Progistix-Solutions Inc. has asked an analyst to prepare an annual review of the Xerox Critical Parts Network for presentation to management in two weeks. The president expected the analyst to review the performance of the network and establish an improvement plan for the coming year, supported by specific goals and objectives. Although Xerox and Progistix had been satisfied with their relationship, after five years, both parties were interested in exploring ways to improve the network, particularly as competitors adopted similar approaches. In preparation for the meeting, the analyst wanted to explore opportunities in three specific areas. First, identify opportunities to improve depot operations. Second, he believed that opportunities existed to make additional improvements in the area of inventory management and he wondered how and where Progistix could work together with Xerox on such an initiative. Third, was to improve system-wide inventory turn performance by re-examining the cut-off point for filling the technicians' trunks with inventory. This case provides an opportunity for students to analyse a rapid-response supply chain and make recommendations for improvements. Class discussion can include issues related to supply chain partnerships, outsourcing, inventory management and demand forecasting. Data provided in the case allow students to develop implementation plans and set specific performance targets.

Teaching Note: 8B05D02 (9 pages)
Industry: Manufacturing
Issues: Supply Chain Management; Logistics; Inventory Planning/Control; Outsourcing
Difficulty: 4 - Undergraduate/MBA



CANADIAN PHARMACEUTICAL DISTRIBUTION NETWORK
P. Fraser Johnson

Product Number: 9B01D014
Publication Date: 3/28/2002
Length: 4 pages

With revenues of over US$1 billion, UPS Logistics Group was a wholly owned subsidiary of United Parcel Service, which offered a full range of supply chain services in North America, Europe, Asia and Latin America. UPS Logistics was responsible for distribution in Eastern Canada for the Canadian Pharmaceutical Distribution Network, an association of pharmaceutical manufacturers that jointly distribute products to hospital pharmacies. Members of this association are unhappy with the current performance of the supply chain, and have asked UPS Logistics' general manager for operations to establish a set of key performance indicators for the network's distribution operations. The general manager must determine how the logistics would be measured before setting specific improvement targets.

Teaching Note: 8B01D14 (14 pages)
Industry: Health Care Services
Issues: Performance Measurement; Outsourcing; Logistics; Distribution
Difficulty: 4 - Undergraduate/MBA


Chapter 10 & :
Dynamic Programming & Integer Programming

FOUR STAR MOTORSPORTS
Peter C. Bell, Ilana Rosenshein

Product Number: 9B03E006
Publication Date: 4/2/2003
Revision Date: 10/19/2009
Length: 3 pages

Four Star Motorsports is a family owned and operated garage specializing in rally cars and the sale of rally tires. In the winter, the business would have sales on tires if there was excess inventory, however, the owner was recently made aware of new pricing concepts through associates. The owner must investigate various pricing options during the upcoming selling season to increase revenue and to develop a plan that will allow adjustments for customers who are unhappy with the new pricing policy or an excess of tire inventory.

Teaching Note: 8B03E06 (7 pages)
Industry: Retail Trade
Issues: Demand Analysis; Pricing; Regression Analysis; Uncertainty
Difficulty: 4 - Undergraduate/MBA



CRAGGIER NATIONAL PARK
Chris K. Anderson, Benjamin Marcus

Product Number: 9B03E001
Publication Date: 2/27/2003
Revision Date: 10/19/2009
Length: 4 pages

Craggier National Park is a typical game reserve located in South Africa. The game reserve's management is trying to determine the optimal mix of animal species to stock a game reserve. Jointly they are trying to determine the mix of hunting packages to promote to potential clients.

Teaching Note: 8B03E01 (7 pages)
Industry: Accommodation & Food Services
Issues: Integer Programming; Optimization; Revenue Management
Difficulty: 5 - MBA/Postgraduate


Chapter 12, 1:
Nonlinear Programming / Metaheuristics / Game Theory
Chapter 15:
Decision Analysis

GUEST-TEK INTERACTIVE ENTERTAINMENT: INTERNATIONAL SALES
Laurie Milton, Nigel Goodwin

Product Number: 9B06M067
Publication Date: 7/27/2006
Revision Date: 9/21/2009
Length: 17 pages

The chief executive officer of Calgary-based Guest-Tek Interactive Entertainment Ltd., a leading provider of high-speed Internet access to the hotel industry, must consider whether and how his company should grow its business overseas. Ninety-seven per cent of Guest-Tek's fiscal year 2003 revenue was derived from North American hotels - a market he knew would eventually become saturated. Guest-Tek had listed publicly in January 2004. Both internal and external investors now demanded results. Other geographic markets held the promise of new growth and competitors were already pursuing those opportunities.

Teaching Note: 8B06M67 (9 pages)
Industry: Information, Media & Telecommunications
Issues: International Marketing; Industry Globalization; Telecommunication Technology; Decision Analysis
Difficulty: 4 - Undergraduate/MBA



RELIABILITY LIFE DATA ANALYSIS FOR DECISION MAKING
Peter C. Bell, Sang-Won Kim

Product Number: 9B06E011
Publication Date: 6/21/2006
Revision Date: 9/17/2009
Length: 5 pages

A research institute has a concern with the reliability requirements of a military vehicle. Reliability is the probability that a system will accomplish its designated mission in a satisfactory manner or in more specific terms, the probability that it will perform in a satisfactory manner for a given period when used under specified operating conditions. Reliability of a weapon system is often expressed in terms of mean time between failure (MTBF). Two military vehicles were tested to obtain reliability life data for reliability evaluation. The objective of this case is to introduce reliability concept, MTBF, life data analysis and objective procedure for a decision making.

Teaching Note: 8B06E11 (6 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Decision Making; Life Data Analysis and Estimation; Reliability
Difficulty: 4 - Undergraduate/MBA



BRILUX: THE FOT-320 DECISION
Peter C. Bell

Product Number: 9B04E018
Publication Date: 5/14/2004
Revision Date: 10/9/2009
Length: 4 pages

BriLux develops early-stage high-speed data networking equipment. In recent month, BriLux customers have hinted that combining ARTRAN, the company's flagship optical data service platform, with a new fiber optic transportation product (tentatively referred to as FOT-320) would increase the market appeal of the company's portfolio. The research and development director must decide whether to support the development of this new product. Excel files are available upon request, products 7B04E018A, 7B04E018B and 7B04E018C.

Teaching Note: 8B04E18 (10 pages)
Industry: Manufacturing
Issues: Probability; Risk Analysis; Decision Analysis; Simulation
Difficulty: 4 - Undergraduate/MBA


Chapter 16:
Markov Chains
Chapter 17:
Queuing Theory

CAFÉ D. POWND
Victor Siu, Chris K. Anderson, Stephan Vachon

Product Number: 9B00D007
Publication Date: 5/2/2000
Revision Date: 1/8/2010
Length: 7 pages

An assistant manager of a university student residence is aware that there are capacity and service problems in the cafeteria. Long waits in line were common, and he hoped to propose some improvements to residence management, preferably ones with no major investments or disbursements involved.

Teaching Note: 8B00D07 (9 pages)
Industry: Accommodation & Food Services
Issues: Service Operations; Queuing Theory; Simulation
Difficulty: 4 - Undergraduate/MBA


Chapter 18:
Inventory Theory

WILKINS, A ZURN COMPANY: MATERIAL REQUIREMENTS PLANNING
Carol Prahinski, Eric Olsen

Product Number: 9B06D005
Publication Date: 4/11/2006
Revision Date: 9/16/2009
Length: 16 pages

The materials manager at the Wilkins plant in California is surprised to find out that an auditor's report recommends a second annual physical inventory count. He had concerns about the level of the inventory that was conducted, he knew changes were needed and must decide what alternatives to consider. Students are exposed to the difficulties of managing inventory as well as typical problems that occur in growing businesses. Students will diagram the bill of material, conduct a materials requirement planning explosion and determine appropriate levels of safety stock, and address concerns associated with the high level of inventory.

Teaching Note: 8B06D05 (14 pages)
Industry: Manufacturing
Issues: Inventory Planning/Control; Material Requirements Planning; Materials Management
Difficulty: 4 - Undergraduate/MBA



VBF TUBING (ABRIDGED)
Chris J. Piper, Robert Klassen

Product Number: 9A97D011
Publication Date: 8/28/1997
Revision Date: 2/3/2010
Length: 10 pages

VBF Tubing, a Dutch firm, is facing increased demand for its products, high inventory levels, and expensive setup costs. In light of these problems, the logistics manager must decide how to respond to a proposal that longer production runs be scheduled. The production, cost and market data supplied permit the students to explore the necessity and implications of changing production batch sizes on these competing priorities. In particular, the application of the traditional Economic Order Quantity can be assessed based on other facility-wide operating practices.

Teaching Note: 8A97D11 (9 pages)
Industry: Manufacturing
Issues: Inventory Planning/Control; Economic Order Quantity; Just-in-Time; Operations Management
Difficulty: 4 - Undergraduate/MBA



NOTE ON MATERIAL REQUIREMENTS PLANNING
Chris J. Piper

Product Number: 9A87D014
Publication Date: 1/1/1987
Revision Date: 6/4/2003
Length: 8 pages

The note on material requirements planning (MRP) explains MRP at an introductory level, indicates some of the essential ingredients for success, and suggests the implications for MRP adoptors who are unable to provide them.

Industry: Manufacturing
Issues: Production Scheduling; Material Requirements Planning; Inventory Planning/Control; Materials Management
Difficulty: 4 - Undergraduate/MBA


Chapter 19:
Markov Decision Processes
Chapter 20:
Simulation

BENCHMARKING AT ULJANIK SHIPYARD
David M. Currie, Giorgio Sinkovic

Product Number: 9B05D011
Publication Date: 4/26/2005
Revision Date: 9/28/2009
Length: 5 pages

A junior executive is given the task of calculating a benchmark common in the ship building industry - cost per compensated gross ton. Although raw data is available for its components, the executive must formulate relationships between the data to determine the benchmark. The case is designed to provide: 1) an introduction to the construction and use of benchmarks in quality management; 2) practice in conceptualizing a problem and designing a basic spreadsheet model to solve the problem. The modeling procedure uses an influence diagram as the basis for constructing the spreadsheet model, this spreadsheet model is available, product 7B05D011.

Teaching Note: 8B05D11 (9 pages)
Industry: Transportation and Warehousing
Issues: Quality Management; Spread Sheet Application; Models
Difficulty: 4 - Undergraduate/MBA



CPSIM2: THE CRITICAL PATH SIMULATOR (WINDOWS VERSION)
Chris J. Piper

Product Number: 9B06D002
Publication Date: 1/11/2006
Revision Date: 9/16/2009
Length: 6 pages

CPSim2 is a Critical Path Simulator that runs under MS Windows. Participants use the simulator to manage the construction of an automated factory - a fairly complex, 43-activity project that must be completed in 107 days if penalties are to be avoided. As project manager, students must make effective trade-offs between the costs incurred by crashing (speeding up) activities, and the financial penalties for late completion. Unforeseen delays and speedups occur during the project, which require timely response. Although these appear random, each user of the simulator is exposed to the same events during the project. This allows performances and strategies to be compared within a class and between classes. CPSim2 maintains a current display of the project's CPM network, as well as the critical path(s) and activity slacks. The time required to complete the exercise is controlled by CPSim2, and does not exceed 60 minutes. This product provides the student instructions on the running of the simulation; the software itself is distributed with a site license for an additional annual license fee (product 7B06D002) - contact Ivey Publishing for pricing and distribution information.

Teaching Note: 8B06D02 (14 pages)
Issues: Critical Path; Computer Assisted Cases; Simulation; Project Management
Difficulty: 4 - Undergraduate/MBA



SCHERING PLOUGH: REPLACING CLARITIN
Chris K. Anderson, Andre Mousseau

Product Number: 9B05E010
Publication Date: 7/15/2005
Revision Date: 9/30/2009
Length: 5 pages

Schering Plough is a large pharmaceutical company with over 22,000 employees worldwide, and over $6.8 billion in sales worldwide. The company is considering two options to replace its flagship drug, Claritin (an antihistamine), as Claritin's patent is soon to expire. One drug is targeted toward nasal congestion, the other towards asthma; however, each drug is at a different stage in the development process, one has greater market potential but was still in its early development stage, the other drug could be launched within the year but would appeal to a much smaller market. The company must decide which drug to pursue or whether to focus on both drugs or neither. The case allows students to do a traditional NPV analysis and decision analysis and the use of simulation.

Teaching Note: 8B05E10 (6 pages)
Industry: Manufacturing
Issues: Net Present Value Method; Real Options; Simulation; Decision Analysis
Difficulty: 4 - Undergraduate/MBA



NORMAL DISTRIBUTION AND THE NCAA TOURNAMENT
Chris K. Anderson, Gregory S. Zaric

Product Number: 9B04E020
Publication Date: 6/14/2005
Revision Date: 7/22/2014
Length: 5 pages

This case presents some information on the NCAA college basketball tournament and suggests a method for estimating the outcomes of games. The probability of winning is modeled as a normal distribution where the mean is based on a team's ratings. Students will be introduced to the normal distribution, sums of normal random variables and event simulations.

Teaching Note: 8B04E20 (4 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Probability; Sports; Simulation; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA