Ivey Publishing

Fundamentals of Operations Management

Davis, M., Aquilano, N., Chase R., Balakrishnan, J.,1/e (Canada, McGraw-Hill Ryerson, 2005)
Prepared By Manpreet Hora, Ph.D. Candidate (Production & Operations Management)
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Introduction to Operations Management

Larry Menor, Ken Mark

Product Number: 9B01D004
Publication Date: 2/2/2001
Revision Date: 12/17/2009
Length: 19 pages

Blinds To Go (BTG), a Montreal-headquartered producer of made-to-order window coverings, had made the decision to enter the Florida market by opening eight retail stores. As a result of this decision, the senior vice-president (SVP) of operations for BTG was faced with the dilemma of deciding if and when an assembly plant should be built to support these and future Florida retail stores. The most recent plant, built in Lakewood, New Jersey, had experienced operational problems during its startup, resulting in the eventual replacement of most of the supervisory staff and a significant portion of the plant employees. This led to additional start-up costs and customer service problems. Faced with this expansion into Florida, the SVP set about devising an operating plan that would achieve the goals of the Florida expansion without the growing pains of past efforts. As the stores were to be opened in six months, a plan would have to be finalized soon.

Teaching Note: 8B01D04 (14 pages)
Industry: Manufacturing
Issues: Service Operations; Operations Management; Action Planning and Implementation; System Design
Difficulty: 4 - Undergraduate/MBA

Chapter 2:
Operations Strategy: Defining How Firms Compete

John S. Haywood-Farmer, Larry Menor, John MacDonald

Product Number: 9B00D021
Publication Date: 12/7/2000
Revision Date: 1/8/2010
Length: 14 pages

Fell-Fab Products is a manufacturer of interior coverings for airlines, bus companies and passenger rail services. A secondary business for the company is the manufacture of other sewn and welded textiles such as mail bags, tents, etc. One of Fell-Fab Products' important airline customers asked the company if it was interested in diversifying into service by taking on a contract to manage all aspects of the interior coverings business. The president of Fell-Fab Products must assess the differences between service management and manufacturing, decide whether Fell-Fab is capable of doing a good job at service and determine whether the business makes economic sense for the company. This case and the accompanying Fell-Fab Products (B) case (product 9B00D022) explore some of the implications of manufacturers diversifying into services.

Teaching Note: 8B00D21 (12 pages)
Industry: Manufacturing
Issues: Strategic Change; Manufacturing Strategy; Growth Strategy; Outsourcing
Difficulty: 4 - Undergraduate/MBA

John S. Haywood-Farmer, Larry Menor, John MacDonald

Product Number: 9B00D022
Publication Date: 12/7/2000
Revision Date: 1/8/2010
Length: 2 pages

Shortly after Fell-Fab Products went through the decision-making process of whether to move into service management in addition to manufacturing, it learned that European Airlines, one of its major European customers, would no longer purchase products directly from Fell-Fab Products. Instead, European Airlines instructed Fell-Fab Products to sell to Aircraft Interior Refurbishment. The president of Fell-Fab wondered how this information would affect his decision. This supplement to Fell-Fab Products (A) (9B00D021) raises the possibility of a strategic alliance.

Teaching Note: 8B00D21 (12 pages)
Industry: Manufacturing
Issues: Growth Strategy; Manufacturing Strategy; Outsourcing; Strategic Alliances
Difficulty: 4 - Undergraduate/MBA

P. Fraser Johnson, Robert Klassen, Manish Kumar

Product Number: 9B03D012
Publication Date: 11/28/2003
Revision Date: 3/16/2005
Length: 23 pages

In March 2002, the general manager of Mathura Refinery had to respond to new national legislation that mandated the production of new cleaner-burning fuels. While these fuels would reduce vehicular emissions in the country, there was the possibility of increased local emissions from the refinery from the new processes used to produce these fuels. Effluent and oily sludge emissions also demanded management attention. The general manager recognized that Mathura Refinery had unique constraints because of it close proximity to the Taj Mahal. Any future expansion of the refinery's capacity would be contingent on its ability to reduce sulfur dioxide emissions and address public expectations.

Teaching Note: 8B03D12 (11 pages)
Industry: Manufacturing
Issues: Environment; Pollution; Manufacturing Strategy; Government Regulation
Difficulty: 4 - Undergraduate/MBA

Chapter 3:
New Product and Service Development and Process Selection

Larry Menor, Jacob Cho

Product Number: 9B03D007
Publication Date: 9/25/2003
Revision Date: 10/19/2009
Length: 6 pages

The owners of Country Paws Boarding Inc., a large boarding facility for dogs, customarily took every opportunity to get to know each dog's likes, dislikes, behaviors and tendencies in order to minimize separation trauma. This required ongoing dialog with each dog owner and observation of each canine. The owners were always eager to chat with those boarding their dogs at Country Paws in the hope of identifying potential new services and improving existing offerings. In response to dog owner expectations for canine socialization and recreation, new offering being considered was the community playground. They must determine how this offering would fit with their current line of services and what other services were worth considering.

Teaching Note: 8B03D07 (8 pages)
Industry: Other Services
Issues: Small Business; Product Design/Development; Process Design/Change; Services
Difficulty: 4 - Undergraduate/MBA

James A. Erskine, Michael LeBoldus

Product Number: 9B03D004
Publication Date: 5/28/2003
Revision Date: 10/19/2009
Length: 9 pages

Foster Technologies Inc. is a wholly owned research and development subsidiary of LB Foster that focuses on wheel counter research and development for traffic control and the railway industry. The failed test of the railway wheel counting prototype was jeopardizing the company's promised delivery of the devices to a customer by the end of the month. With the company's and the vice-president of operations reputations at stake, he must decide what the next move is: Can his team resolve the problems with the prototype? Should he ask to have the chief design engineer removed or should he resign?

Teaching Note: 8B03D04 (4 pages)
Industry: Manufacturing
Issues: Research and Development; New Products; Interpersonal Relations; Technological Change
Difficulty: 4 - Undergraduate/MBA

Chapter 4:
Project Management

Carol Prahinski, Thomas K. Yeung

Product Number: 9B05D014
Publication Date: 10/13/2005
Revision Date: 9/28/2009
Length: 7 pages

The senior manager of the Multiple Sclerosis Society of Canada, Ontario Division is working on the next fundraising event, the bicycle tour. She must plan the routing activities, while also concerned about cyclists' safety and enjoyment while participating in the event. Students will apply project management tools such as PERT/CPM diagrams and critical path while recognizing and managing for uncertainty in task duration times.

Teaching Note: 8B05D14 (15 pages)
Industry: Social Advocacy Organizations
Issues: Critical Path; Uncertainty; Project Management; Planning
Difficulty: 4 - Undergraduate/MBA

James A. Erskine, Duncan G. Copeland, Bradley Dixon

Product Number: 9A91E009
Publication Date: 1/1/1991
Revision Date: 6/18/2003
Length: 26 pages

A hospital financial systems implementation project has run into some difficulties. The decision maker must analyze the complex situation and develop an attainable action plan for the remainder of the project. The case explores various facets of Information Systems project management, focusing on the human factors that are important in any project management situation.

Teaching Note: 8A91E09 (9 pages)
Industry: Health Care Services
Issues: Information Systems; Health Administration; Project Management; Computer System Implementation
Difficulty: 4 - Undergraduate/MBA

Chapter 5:
Process Measurement and Analysis

Michiel R. Leenders, Robert Klassen, Natasha Ebanks

Product Number: 9B02D011
Publication Date: 9/20/2002
Revision Date: 11/9/2009
Length: 12 pages

ING Direct Canada is a retail banking operation and a subsidiary of one of the top global providers of integrated financial services, ING Group of the Netherlands. ING Direct Canada needs to meet the operational demands of a growing client base, while maintaining its current staffing levels, physical space and commitment to same-day processing of accounts. The senior vice-president of operations must implement procedures to cope with the immediate challenges of the company's growth, as well as develop a long-term strategy. Options to consider included new technology, increased efficiencies, or relaxing the same day processing requirements.

Teaching Note: 8B02D11 (15 pages)
Industry: Finance and Insurance
Issues: Process Analysis; Process Design/Change; Service Operations; Scheduling
Difficulty: 4 - Undergraduate/MBA

Chapter 6:
Quality Management

Carol Prahinski

Product Number: 9B02D020
Publication Date: 1/10/2003
Revision Date: 11/30/2009
Length: 4 pages

Unifine Richardson is a food manufacturer with 110 employees. The company's sole supplier of honey announced that effective immediately it was no longer able to supply Chinese honey. The Canadian Food Inspection Agency had rejected the importation of Chinese honey due to recently found traces of an antibiotic chemical. China had provided 20 per cent of the world's honey supply. Faced with escalating prices, issues with customers' preferences and possible product recalls, the purchasing manager must determine the company's next step. International sourcing, supply disruptions, supply chain management and quality issues must be considered.

Teaching Note: 8B02D20 (13 pages)
Industry: Manufacturing
Issues: Imports; Quality; Supplier Relations; Purchasing
Difficulty: 4 - Undergraduate/MBA

P. Fraser Johnson, Mark Sheppard

Product Number: 9B00D016
Publication Date: 10/20/2000
Revision Date: 10/18/2002
Length: 20 pages

Blue Mountain Resorts had been driving its business with a service quality program for several years, which the vice-president of human resources was responsible for coordinating. With a new ski season underway, and the critical Christmas season approaching, he wanted to continue progress of the program by introducing a new set of initiatives. He had recently gathered together a team of Blue Mountain Resort managers, from a variety of different areas in the company, to identify opportunities to improve service quality. The group provided three proposals that he felt warranted consideration. At the upcoming executive team meeting, he would be expected to set the priorities for the coming year and recommend what action, if any, should be taken for each. He had to decide which programs made the most sense for immediate action and which ones required additional study and analysis. Each of the proposals affected different parts of the organization, so he also needed to be concerned about who else in the company should be involved in further evaluation and implementation.

Teaching Note: 8B00D16 (14 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Continuous Improvement; Cost/Benefit Analysis; Service Operations; Service Quality
Difficulty: 4 - Undergraduate/MBA

Chapter 7:
Facility Decisions: Location and Capacity

John S. Haywood-Farmer, Andrew Fletcher

Product Number: 9A96D005
Publication Date: 6/28/1996
Revision Date: 2/9/2010
Length: 11 pages

The president has to decide where to relocate his water park manufacturing company's production facility. Not only has the company apparently outgrown its current site, but residents near it have complained about unpleasant odors. The company has investigated three potential sites which students have to evaluate both financially as well as from a strategic point of view: should the company own or rent its facility? Should the manufacturing facility be located near customers, suppliers (including labor), or the company's head office?

Teaching Note: 8A96D05 (7 pages)
Industry: Manufacturing
Issues: Plant Location; Site Selection; Expansion; Corporate Strategy
Difficulty: 4 - Undergraduate/MBA

Chris J. Piper, Albert R. Wood

Product Number: 9A91D004
Publication Date: 1/1/1991
Revision Date: 7/21/2000
Length: 10 pages

A large, open pit, iron ore mine is plagued with crusher delays. The case describes the situation, provides relevant capacities and costs, and gives statistical data on the frequency and duration of crusher stoppages. The manager has to choose between holding trucks idle during crusher delays, reassigning the truck-shovel teams to waste removal, or to dump ore at an ore stockpile.

Teaching Note: 8A91D04 (8 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Capacity Analysis; Bottlenecks; Mining; Natural Resources
Difficulty: 4 - Undergraduate/MBA

Robert Klassen, Paul W. Beamish, Jim Barker

Product Number: 9A97D010
Publication Date: 8/28/1997
Revision Date: 2/3/2010
Length: 16 pages

International Decorative Glass (IDG) is a small manufacturer of glass panels which are inserted into exterior steel doors. While their primary market is in the U.S., most of IDG's manufacturing is done in China through a joint venture arrangement. In response to rapidly growing customer demand, the vice president of operations, is considering the expansion of either their Chinese or Canadian manufacturing operations. Alternatively, he has been approached by a supplier to form a new joint venture manufacturing operation in Vietnam. Financial, political and infrastructural considerations must be weighed, in addition to any signal that would be sent to their current Chinese partners.

Teaching Note: 8A97D10 (14 pages)
Industry: Retail Trade
Issues: China; International Business; Manufacturing Strategy; Manufacturing Capacity; Joint Ventures
Difficulty: 4 - Undergraduate/MBA

Chapter 8:
Facility Decisions: Layouts

John S. Haywood-Farmer, Alex Antoniou

Product Number: 9B04D006
Publication Date: 6/24/2004
Revision Date: 10/9/2009
Length: 17 pages

Canadian Tire is a large automotive parts, sports and leisure, and home improvement retail store chain. With the rise in the number of large retail outlets, the company needed to look at ways to maintain and increase sales. Continuous improvements were made to store design and in-store operations. The vice-president of store planning and merchandising was evaluating checkout configurations. He needed to make his decision soon to avoid delaying the construction of four new test stores. He has three options; continue using the current tandem system, add self check-outs or switch to a single line configuration. He must analyze the three options to determine the benefits and trade-offs of each.

Teaching Note: 8B04D06 (7 pages)
Industry: Retail Trade
Issues: Process Design/Change; Service Operations; Store Layout; Retailing
Difficulty: 4 - Undergraduate/MBA

Chapter 9:

James A. Erskine, Michiel R. Leenders, Chris J. Piper

Product Number: 9B04D017
Publication Date: 9/20/2004
Revision Date: 10/9/2009
Length: 6 pages

The purchasing manager was wondering how many bottles he should purchase in the coming year. Last year, the market had levelled off and sales predictions were difficult. On the one hand he wanted to be sure sufficient bottles were available to supply this year's sales levels, yet he also wanted to minimize year-end inventories as covered storage space for empty bottles was tight and a bottle change-over seemed possible in the next two years.

Teaching Note: 8B04D17 (12 pages)
Industry: Manufacturing
Issues: Inventory; Forecasting
Difficulty: 4 - Undergraduate/MBA

Carol Prahinski

Product Number: 9B04D020
Publication Date: 9/12/2004
Revision Date: 10/9/2009
Length: 2 pages

Necanko Inc. is a large international food manufacturer. A buyer-scheduler for the company must forecast sales demand to determine production planning, inventory management and distribution for the year. Sales were normally predictable and stable, but the company has just come back from a three month layoff due to slow sales and they are now experiencing a sales increase three times greater than usual. The buyer-scheduler is uncertain why the sales are spiking and must decide what action to take.

Teaching Note: 8B04D20 (9 pages)
Industry: Manufacturing
Issues: Production Scheduling; Bullwhip Effect; Uncertainty; Marketing Channels
Difficulty: 4 - Undergraduate/MBA

Chapter 10:
Waiting Line Management

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 11:

John S. Haywood-Farmer

Product Number: 9A95D008
Publication Date: 5/4/1995
Revision Date: 6/5/2012
Length: 5 pages

In the mid-1990s McLeod Motors rationalized a number of motor end shields to reduce manufacturing costs, improve service, and reduce inventories. However, inventories have apparently risen. Students must identify why McLeod has inventory, how large the inventory might have been before the rationalization, how large they might be now, why they are so large, and what could be done to reduce inventory levels. The case can be used in conjunction with a discussion on inventory function.

Teaching Note: 8A95D08 (11 pages)
Industry: Manufacturing
Issues: Inventory; Scheduling; Materials Management; Inventory Planning/Control
Difficulty: 4 - Undergraduate/MBA

Michiel R. Leenders

Product Number: 9A94D001
Publication Date: 3/29/1994
Revision Date: 10/19/2017
Length: 7 pages

This business game allows participants to make 12 scheduling decisions under conditions of demand uncertainty. It is played with groups of 3-5 participants and does not require a computer.

Teaching Note: 8A94D01 (12 pages)
Industry: Manufacturing
Issues: Decision Theory; Inventory; Scheduling; Shortages
Difficulty: 4 - Undergraduate/MBA

Chapter 12:
Supply Chain Management

Larry Menor, Ramasastry Chandrasekhar

Product Number: 9B04D011
Publication Date: 5/14/2004
Revision Date: 10/9/2009
Length: 19 pages

The president of the Nutan Mumbai Tiffin Box Suppliers Charity Trust had just returned to his office after meeting with Britain's Prince Charles, who was on an official visit to Mumbai. The Trust was the managing organization of the dabbawallah meal delivery network. The dabbawallah's service was cited internationally by management scholars and industry executives as an exemplar in supply chain and service management. The service had acquired a reputation for its delivery reliability in Mumbai. International interest in the dabbawallahs was largely due to a 1998 article published by Forbes. However, many observers now expressed concerns over the future viability of the dabbawallahs' service given the difficulty in duplicating its delivery network elsewhere, the emergence of other lunch competitors in Mumbai, and an array of environmental changes affecting both its customers and the workforce. The case allows a discussion of service and supply chain management issues related to operational excellence.

Teaching Note: 8B04D11 (13 pages)
Industry: Other Services
Issues: Process Design/Change; System Design; Service Operations; Supply Chain Management
Difficulty: 4 - Undergraduate/MBA

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 13:
Just-in-Time Systems

Edward D. Arnheiter, John J. Cocco

Product Number: 9B02D019
Publication Date: 1/9/2003
Revision Date: 11/30/2009
Length: 33 pages

Loctite Corporation is a large industrial adhesives company. The company has implemented the five principles of lean management on its customer service operation. A recent merger of the customer engineering service operation with the dispensing equipment operation has the vice-president of technical service and application engineering looking at applying the lean principles on the equipment operations. The company initially considered equipment a secondary product line needed only to augment its service offering in the support of the core product, industrial adhesives. In addition, most of Loctite's equipment manufacturing activities were outsourced so suppliers played a key role in lean transformation. The vice-president must prepare a plan to implement the principles of lean management while meeting the goals set out by the president of the company.

Teaching Note: 8B02D19 (17 pages)
Industry: Manufacturing
Issues: Manufacturing Strategy; Inventory Planning/Control; Value Chain; Price Tension
Difficulty: 5 - MBA/Postgraduate

Chris J. Piper, Narendar Sumukadas

Product Number: 9A97D012
Publication Date: 12/3/1997
Revision Date: 2/3/2010
Length: 15 pages

The vice-president Operations of Spartan Plastics, is facing a trade-off. As an avid proponent of the Toyota production system, just in time manufacturing (JIT), ISO 9001, and continuous improvement, he has reduced setup times, batch sizes, and throughput times. On the other hand, the scrap rate has shot up. This case would be appropriate for use in a production and operations course, to introduce students to the concepts of JIT and world class manufacturing.

Teaching Note: 8A97D12 (6 pages)
Industry: Manufacturing
Issues: Quality Management; Continuous Improvement; Just-in-Time; Operations Management
Difficulty: 4 - Undergraduate/MBA

Chapter 14:
Operations Planning: Overview and Aggregate Plans

Mark B. Vandenbosch, David W. Large, Gavin Liddy

Product Number: 9A99D009
Publication Date: 8/23/1999
Revision Date: 1/14/2010
Length: 12 pages

The vice-president and general manager of Mitel's semiconductor division is faced with a rapidly growing market for the company's business communication chips, but has limited capacity at the semiconductor plant. There is little industry capacity to outsource production. He must determine how to pursue the growing market and how to secure additional capacity. Options include modifications to the current facility, construction of a new facility, or the acquisition of a plant from another company.

Teaching Note: 8A99D09 (19 pages)
Industry: Manufacturing
Issues: Capital Investment; Production Management/Control; Capacity Analysis
Difficulty: 4 - Undergraduate/MBA

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 15:
Inventory Systems for Independent Demand

Ken R. Bowlby, John S. Haywood-Farmer

Product Number: 9A94D014
Publication Date: 9/8/1994
Revision Date: 2/23/2010
Length: 4 pages

The assistant plant manager was trying to decide on production scheduling and inventory management policies for the new computer diskette plant. Students are presented with three demand forecasts of increasing complexity as variability between and within product lines emerges. The case is suitable for students to do an economic order quantity (EOQ) analysis and draft a production schedule.

Teaching Note: 8A94D14 (6 pages)
Industry: Manufacturing
Issues: Production Scheduling; Inventory Planning/Control; Forecasting; Economic Order Quantity
Difficulty: 4 - Undergraduate/MBA

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

Chapter 16:
Materials Planning for Dependent Demand

Chris J. Piper

Product Number: 9A82D006
Publication Date: 1/1/1982
Revision Date: 6/1/2001
Length: 4 pages

Martin Trailers Limited, which has grown rapidly, produces a line of camping trailers, which have a pronounced seasonal sales pattern. Details for the previous year's planning process, staffing levels, production outputs and costs are reviewed by the owner, with the objective of improving the management of materials in the year ahead. Sufficient information is available to perform a quantitative analysis of the aggregate planning decision and its relationship to material requirements planning.

Teaching Note: 8A82D06 (6 pages)
Industry: Manufacturing
Issues: Capacity Analysis; Material Requirements Planning; Materials Management; Purchasing
Difficulty: 4 - Undergraduate/MBA