Statistical Quality

IEOR4000: Production Management Lecture 1 Lecture Plan 1. Syllabus 2. Motivation 3. History of Production and Operations Management 4. Recent trends in Production and Operation Management 5. Types of Manufacturing Operations 6. Strategy and Hierarchical Planning 7. Inventory Systems

Professor Guillermo Gallego September 3, 2002

1

Syllabus

Production Management Guillermo Gallego S.W.Mudd 324, Thursdays 2:30-3:30pm (212) 854-2935 ggallego@ieor.columbia.edu Celik Sabri sc2190@columbia.edu TBA Silver, E. Pike, D. and Peterson, R. Inventory Management and Production Planning and Scheduling Third Edition, Wiley 1998. References: Nahmias, S. Production and Operations Analysis, Third Edition, Irwin, 1997. Pinedo, M. Scheduling, Theory, Algorithms and Systems, Prentice Hall, 1995.Evaluation: Assignments 20 % In-class closed-book 1.25 hour midterm 35%. In-class closed-book three hour final 45%. Software Requirements Around the middle of the semester we will deal with aggregate production planning, and for this topic we will need to solve linear programs. We will also study forecasting and inventory management under uncertainty. A recent version of Excel should be enough tosolve most of the problems assigned in class. Some exercises may require the use of Crystal Ball or @Risk. These are add-ins to Excel. Crystal Ball is available at the IEOR lab. Level of the course: The course requires a working knowledge of calculus, probability and statistics, and linear programming.

Course: Instructor: Office & Hours: Telephone: Email Teaching Assistant: Email Office & Hours: TextBook:

2

Motivation

Operations is concerned with the transformation of inputs into goods and services. Operations is a primary business function along with marketing and finance, which plays a vital role in achieving a company’s strategic plans. Operations typically involve the greatest portion of the company’s employees and is responsible for a large portion of the firm’s capital assets. Theoperation function

IEOR4000: Production Management

page 2

Professor Guillermo Gallego

is performed by the group of people who are responsible for producing the goods or providing the services that the business offers to the public. These activities include plant management, product development, process engineering, facility layout, production and capacity planning, quality control,inventory control, product distribution, etc. An effective management of the operation function should provide desirable products in the appropriate quantities, at the appropriate times, of the required quality and at a reasonable cost. Advances in information system, telecommunications, and the liberalization of trade has heightened global competition. Companies are seeking new insights intocustomer needs, developing new products, and improving old ones. Many are working to target smaller-volume niche markets. Companies are downsizing to reduce levels of bureaucracy, reorganizing and empowering employees and teams of employees to pursue new levels of performance. U.S. firms have responded to international competition by working to improve both their operating efficiencies and the quality oftheir goods and services. With this renewed emphasis on operations, it has become increasingly important that students have an understanding of operations management’s significance to the success of the companies where they will work. Companies must work to improve the “value ratio,” i.e., the desirability of a good or service to the customer divided by the cost of the good or service. This ratio canbe improved by improving the company’s performance in regards to these measures: 1. Cost 2. Quality (meet the needs for which products or services are intended) 3. Flexibility (quick response to customer needs: volume, new product, and product mix) 4. Delivery (standard goods must be readily available, others should have low leadtimes. Speed and reliability)

3

History of Operations...