Alaska Airlines is unique among the nine major U.S. carriers not only for its extensive flight coverage of remote towns throughout Alaska (it also covers the U.S., Hawaii, and Mexico from its primary hub in Seattle). It is also one of the smallest independent airlines, with 10,300 employees, including 3,000 flight attendants and 1,500 pilots. What makes it really unique, though, is its ability to build state-of-the-art processes, using the latest technology, that yield high customer satisfaction. Indeed, J. D. Power and Associates has ranked Alaska Airlines highest in North America for 7 years in a row for customer satisfaction. Alaska Airlines was the first to sell tickets via the Internet, first to offer Web check-in and print boarding passes online, and first with kiosk check-in. As Wayne Newton, Director of System Operation Control, states, “We are passionate about our processes. If it’s not measured, it’s not managed.” One of the processes Alaska is most proud of is its baggage handling system. Passengers can check in at kiosks, tag their own bags with bar code stickers, and deliver them to a customer service agent at the carousel, which carries the bags through the vast underground system that eventually delivers the bags to a baggage handler. En route, each bag passes through TSA automated screening and is manually opened or inspected if it appears suspicious. With the help of bar code readers, conveyer belts automatically sort and transfer bags to their location (called a “pier”) at the tarmac level. A baggage handler then loads the bags onto a cart and takes it to the plane for loading by the ramp team waiting inside the cargo hold. There are different procedures for “hot bags” (bags that have less than 30 minutes between transfer) and for “cold bags” (bags with over 60 minutes between plane transfers). Hot bags are delivered directly from one plane to another (called “tail-to-tail”). Cold bags are sent back into the normal conveyer system. The process continues on the destination side with Alaska’s unique guarantee that customer luggage will be delivered to the terminal’s carousel within 20 minutes of the plane’s arrival at the gate. If not, Alaska grants each passenger a 2,000 frequent-flier mile bonus! The airline’s use of technology includes bar code scanners to check in the bag when a passenger arrives, and again before it is placed on the cart to the plane. Similarly, on arrival, the time the passenger door opens are electronically noted and bags are again scanned as they are placed on the baggage carousel at the destination—tracking this metric means that the “time to carousel” (TTC) deadline is seldom missed. And the process almost guarantees that the lost bag rate approaches zero. On a recent day, only one out of 100 flights missed the TTC mark. The baggage process relies not just on technology, though. There are detailed, documented procedures to ensure that bags hit the 20-minute timeframe. Within 1 minute of the plane door opening at the gate, baggage handlers must begin the unloading. The first bag must be out of the plane within 3 minutes of parking the plane. This means the ground crew must be in the proper location—with their trucks and ramps in place and ready to go. Largely because of technology, flying on Alaska Airlines is remarkably reliable—even in the dead of an Alaska winter with only 2 hours of daylight, 50 mph winds, slippery runways, and low visibility. Alaska Airlines has had the industry’s best on-time performance, with 87% if its flights landing on time. Discussion Questions 1. Prepare a flowchart of the process a passenger’s bag follows from kiosk to destination carousel. Include the exception process for the TSA opening of selected bags. 2. What other processes can an airline examine? Why is each important? 3. How does the kiosk alter the check-in process? 4. What metrics (quantifiable measures) are needed to track baggage? 5. What is the role of bar code scanners in the baggage process?
> Develop two other plans for the Mexican roofing manufacturer described Solved Problem 13.1. a) For Plan 5, use constant workforce of eight workers for the first 3 months and ten workers for the last 3 months. Use subcontracting to meet the remainder of d
> The manufacturer of outdoor paints at Jebel Ali, Dubai, has collected the following information regarding the capacities (in units) and demand forecast for the next 9 months. Cost data are as follows: a) Develop a chase plan to meet the monthly demand us
> The production planning period for knobs at Al-Arabi Factory, Egypt, is 6 months. Cost data is as follows: For each of the next 6 months, capacity and demand data for knobs are as follows: Develop a production plan that minimizes costs using the transpor
> The production planning period for mobile boards at Sime Factory, Egypt, is 4 months. Cost data are as follows: For each of the next 4 months, capacity and demand data for boards are as follows: Develop a production plan that minimizes costs using the tr
> From its first Red Lobster in 1968, the chain has grown to 705 locations, with over $2.6 billion in U.S. sales annually. The casual dining market may be crowded, with competitors such as Chili’s, Ruby Tuesday, Applebee’
> Using the data in Problem 13.9, prepare the following two plans. Compare Plans C and D with Plans A and B and make a recommendation. ◆ Plan C – A chase plan. Assume the current workforce at 20 workers and productivity
> The table below provides information about the demand forecast and the number of working days for a tools manufacturing factory in Egypt. Construct a graph for the daily demand and the average daily demand forecast.
> The small boatyard White Kayaks built 156 epoxy kayaks last year. Each of these requires 12 kg of epoxy, purchased in 6-kg barrels at $170 each, with a freight cost of $18 per shipment plus $1/kg. The annual carrying cost is estimated to 20% of the value
> If D = 8,000 per month, S = $45 per order, and H = $2 per unit per month, a) What is the economic order quantity? b) How does your answer change if the holding cost doubles? c) What if the holding cost drops in half?
> William Beville’s computer training school, in Richmond, stocks workbooks with the following characteristics: Demand D = 19,500 units/year Ordering cost S = $25/order Holding cost H = $4/unit/year a) Calculate the EOQ for the workbooks. b) What are the
> Lynn Fish opened a new beauty-products retail store. There are numerous items in inventory, and Lynn knows that there are costs associated with inventory. However, because her time is limited, she cannot carefully evaluate the inventory policy for all pr
> The company organizing the famous rapper Sean Paul’s concert in Dubai has decided to print shirts to be sold at the event. The company has estimated that 20,000 attendees will attend the concert and, on an average, 40% of the attendees usually buy shirts
> Henrique Correa’s bakery prepares all its cakes between 4 a.m. and 6 a.m. so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $10 price. The cost of baking a cake is $6, and demand i
> Beqala.com is an online grocery store that sells large fresh shrimps to customers in the area of Cairo, Egypt. The cost per kilo of shrimp is E£150 and it is sold at E£280 per kilo. The remaining shrimps at the end of the day are sold to a local restaura
> Demand during lead time for one brand of TV is normally distributed with a mean of 36 TVs and a standard deviation of 15 TVs. What safety stock should be carried for Dennis Yu’s Appliance Outlet to provide a 90% service level? What is the appropriate reo
> In October 2018, the top management of Southern Recreational Vehicle Company of St. Louis, Missouri, announced its plans to relocate its manufacturing and assembly operations to a new plant in Ridgecrest, Mississippi. The firm, a major producer of pickup
> Barbara Flynn’s company has compiled the following data on a small set of products: Perform an ABC analysis on her data.
> The distributor of Sumitomo Tires in Egypt estimates the annual demand of tires for next year to be normally distributed with a mean of 100,000 tires and a standard deviation of 3,000 tires. The ordering cost is estimated to be E£ 20,000 per order and th
> Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also a variable and normal
> Metro hypermarket in Kuwait supplies juice boxes from a manufacturer in Saudi Arabia. Daily demand is almost constant at 100 boxes per day. The lead time for boxes delivery is normally distributed with a mean of 5 days and a standard deviation of 2 days.
> Chicago’s Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the lin
> Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set. (BB-1 stands for Body Beautiful Number 1.) The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantit
> A local hypermarket in Kuwait supplies juice boxes from a manufacturer in Saudi Arabia. The reorder point, without safety stock, is 800 boxes. The carrying cost is KWD 20 (Kuwaiti Dinar) per box per year, and the ordering cost is KWD 50 per box per year.
> Authentic Thai rattan chairs (shown in the photo) are delivered to Gary Schwartz’s chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $30 per unit per
> Based on available information, lead time demand for PC jump drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. a) What value of Z should be applied? b) How many drives should be
> Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would l
> Since opening day, Arnold Palmer Hospital has experienced an explosive growth in demand for its services. One of only six hospitals in the U.S. to specialize in health care for women and children, Arnold Palmer Hospital has cared for more than 1,500,000
> In its 48 years of existence, Hard Rock has grown from a modest London pub to a global power managing 163 restaurants, 23 hotels/ casinos, and live music venues. This puts Hard Rock firmly in the service industry—a sector that employs over 75% of the peo
> Huehn-Brown Products in St. Petersburg offers the following discount schedule for its 4-by-8-foot sheets of quality plywood. Home Sweet Home Company orders plywood from Huehn Brown. Home Sweet Home has an ordering cost of $45. Carrying cost is 20%, and a
> The South African company AFROS sells safety equipment from their central warehouse in Johannesburg. AFROS applies an annual counting of the inventories at approximately 55,000 articles. The supply manager is not satisfied with the record accuracy and ha
> Happy Pet, Inc., is a large pet store located in Long Beach Mall. Although the store specializes in dogs, it also sells fish, turtle, and bird supplies. The Ever Last Leader, a leather lead for dogs, costs Happy Pet $7 each. There is an annual demand for
> Given the following data on a hardware item stocked by Andreas Wieland’s paint store in Copenhagen, should the quantity discount be taken? • D = 2,000 units; S = $10; H = $1; P = $1 • Discount price = $.75 • Quantity needed to qualify for discount = 2,00
> Zhong Factory manufactures different types of computer motherboards in batches. The demand for one of its motherboards is 200 units/day, while Zhong has a capacity of up to 1,000 motherboards/day. The factory operates 250 days per year. The setup cost is
> Al-Tawheed Discount Store sells a certain type of office chair for E£400. The annual holding cost is E£40 per unit per year, annual demand is 900 chairs, and the order cost is E£800 per order. The lead time is 14 days. The store is open 360 days per year
> Rick Jerz is attempting to perform an inventory analysis on one of his most popular products. Annual demand for this product is 5,000 units; carrying cost is $50 per unit per year; order costs for his company typically run nearly $30 per order; and lead
> It takes approximately 2 weeks (14 days) for an order of steel bolts to arrive once the order has been placed. The demand for bolts is fairly constant; on the average, the manager, Michelle Wu, has observed that the hardware store sells 500 of these bolt
> Victor Pimentel uses 1,500 units per year of a certain subassembly that has an annual holding cost of $45 per unit. Each order placed costs Victor $150. He operates 300 days per year and has found that an order must be placed with his supplier 6 working
> If the economic order quantity = 300, annual demand = 8,000 units, and order costs = $45 per order, what is the holding cost for P. S. Ravi Metalworks?
> The Arnold Palmer Hospital (APH) in Orlando, Florida, is one of the busiest and most respected hospitals for the medical treatment of children and women in the U.S. Since its opening on golfing legend Arnold Palmer’s birthday September 10, 1989, more tha
> If D = 1,000 per year, S = $62.50 per order, and H = $.50 per unit per year, what is the economic order quantity for purchasing manager Soomin Park?
> Emarpy Appliance is a company that produces all kinds of major appliances. Bud Banis, the president of Emarpy, is concerned about the production policy for the company’s best-selling refrigerator. The annual demand has been about 8,000 units each year, a
> Jean-Marie Bourjolly’s restaurant has the following inventory items that it orders on a weekly basis: a) Which is the most expensive item, using annual dollar volume? b) Which are C items? c) What is the annual dollar volume for all 20
> The oar maker Collars produces high-quality oars shipped all over the world. The oars are equipped with bronze oarlocks when sold to customers. Those oarlocks are purchased from an external supplier. To simplify the administrative process and at the same
> Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 800 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price
> Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the accompanying table on the next page. Annual usage is 2,400 valves; order cost is $10 per order; and annual inventory hold
> M. P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 700 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table. Ordering cost i
> Rocky Mountain Tire Centre sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18
> The catering manager of La Vista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she need
> Meena Distributors has an annual demand for an airport metal detector of 1,400 units. The cost of a typical detector to Meena is $400. Carrying cost is estimated to be 20% of the unit cost, and the ordering cost is $25 per order. If Purushottama Meena, t
> Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 400 per month. The company’s supplier, Rich Blue Chip Manufacturing, In
> Union Furniture is a famous furniture store in Dubai. The company orders one of its bedroom models from Malaysia. The yearly demand for the bedroom is 200 units. The selling price is AED 5,000 per unit, the holding cost per unit is estimated at 25% of th
> Arthur Meiners is the production manager of WheelRite, a small producer of metal parts. Wheel Rite supplies CalTex, a larger assembly company, with 10,000 wheel bearings each year. This order has been stable for some time. Setup cost for Wheel-Rite is $4
> In this chapter, we have discussed a number of location decisions. Consider another: United Airlines announced its competition to select a town for a new billion-dollar aircraft-repair base. The bidding for the prize of 7,500 jobs paying at least $25 per
> For the sake of efficiency and lower costs, Premium Standard Farms of Princeton, Missouri, has turned pig production into a standardized product-focused process. Slaughterhouses have done this for a hundred years—but after the animal was dead. Doing it w
> A lawsuit a few years ago made headlines worldwide when a McDonald’s drive-through customer spilled a cup of scalding hot coffee on herself. Claiming the coffee was too hot to be safely consumed in a car, the badly burned 80-year-old woman won $2.9 milli
> John Sloan, president of Sloan Toy Company, Inc., in Oregon, has just reviewed the design of a new pull-toy locomotive for 1- to 3-year-olds. John’s design and marketing staff are very enthusiastic about the market for the product and the potential of fo
> We live in a society obsessed with test scores and maximum performance. Think of the SAT, ACT, GRE, GMAT, and LSAT. Though they take only a few hours, they are supposed to give schools and companies a snapshot of a student’s abiding talents. But these te
> Two examples of massively mismanaged projects are TAURUS and the “Big Dig.” The first, formally called the London Stock Exchange Automation Project, cost $575 million before it was finally abandoned. Although most IT projects have a reputation for cost o
> As a manufacturer of athletic shoes whose image—indeed performance—is widely regarded as socially responsible, you find your costs increasing. Traditionally, your athletic shoes have been made in Indonesia and China. Although the ease of doing business i
> Wheeled Coach, based in Winter Park, Florida, is the world’s largest manufacturer of ambulances. Working four 10-hour days each week, 350 employees make only custom-made ambulances; virtually every vehicle is unique. Wheeled Coach accommodates the market
> The American car battery industry boasts that its recycling rate now exceeds 95%, the highest rate for any commodity. However, with changes brought about by specialization and globalization, parts of the recycling system are moving offshore. This is part
> The space shuttle Columbia disintegrated over Texas on its 2003 return to Earth. The Challenger exploded shortly after launch in 1986. And the Apollo 1 spacecraft imploded in fire on the launch pad in 1967. In each case, the lives of all crew members wer
> In this Lean operations world, in an effort to lower handling costs, speed delivery, and reduce inventory, retailers are forcing their suppliers to do more and more in the way of preparing their merchandise for their cross-docking warehouses, shipment to
> Scheduling people to work second and third shifts (evening and “graveyard”) is a problem in almost every 24-hour company. Medical and ergonomic data indicate the body does not respond well to significant shifts in its natural circadian rhythm of sleep. T
> For many months your prospective ERP customer has been analyzing the hundreds of assumptions built into the $900,000 ERP software you are selling. So far, you have knocked yourself out to try to make this sale. If the sale goes through, you will reach yo
> Airline passengers today stand in numerous lines, are crowded into small seats on mostly full airplanes, and often spend time on taxiways because of air-traffic problems or lack of open gates. But what gripes travellers almost as much as these annoyances
> Wayne Hills Hospital in tiny Wayne, Nebraska, faces a problem common to large, urban hospitals as well as to small, remote ones like itself. That problem is deciding how much of each type of whole blood to keep in stock. Because blood is expensive and ha
> As a buyer for a discount retail chain, you find yourself caught in a maelstrom. Just last month, your chain began selling an economy-priced line of clothing endorsed by a famous movie star. To be price competitive, you have followed the rest of the indu
> Johnstown Foundry, Inc., with several major plants, is one of the largest makers of cast-iron water and sewer pipes in the U.S. In one of the nation’s most dangerous industries, Johnstown is perhaps one of the most unsafe, with 4 times the injury rate of
> Although buried by mass customization and a proliferation of new products of numerous sizes and variations, grocery chains continue to seek to maximize payoff from their layout. Their layout includes a marketable commodity—shelf space—and they charge for
> Rochester Manufacturing Corporation (RMC) is considering moving some of its production from traditional numerically controlled machines to a flexible manufacturing system (FMS). Its computer numerical control machines have been operating in a high-variet
> What is competitive advantage and what is the theory of comparative advantage?
> Identify and explain the four strategies that operations managers of international and multinational firms use to approach global opportunities.
> Suppose you need to forecast the amount of relief aid needed following an earthquake. Which type of forecast do you think is the most appropriate: qualitative or quantitative? Why? Is collaborative planning, forecasting, and replenishment (CPFR) applicab
> What are some career opportunities in the operations management discipline?
> Why must companies practice corporate social responsibility?
> Distinguish between effective capacity and actual output.
> What is efficiency?
> What is effective capacity?
> What are the techniques available to operations managers to deal with a bottleneck operation? Which of these does not decrease throughput time?
> Describe the five-step process that serves as the basis of the theory of constraints.
> Darden Restaurants, the $6.3 billion owner of such popular brands as Olive Garden, Seasons 52, and Bahama Breeze, serves more than 320 million meals annually in its 1,500 restaurants across the U.S. and Canada. Before any one of these meals is placed bef
> Explain how net present value is an appropriate tool for comparing investments.
> Under what conditions would a firm want its capacity to lag demand? to lead demand?
> Distinguish between design capacity and effective capacity.
> Why is a process termed “out of control” if it temporarily produces less defectives?
> When is the desired mean, , used in establishing the centreline of a control chart instead of x?
> Explain how a person using 2-sigma control charts will more easily find samples “out of bounds” than 3-sigma control charts. What are some possible consequences of this fact?
> List some possible causes of assignable variation.
> List five steps in developing and using x-charts and R-charts.
> Can the X-bar chart be used to see if the number of defectives in a production timeslot is randomly distributed? Explain.
> Define “in statistical control.”
> Frito-Lay, the multi-billion-dollar snack food giant, produces billions of pounds of product every year at its dozens of U.S. and Canadian plants. From the farming of potatoes—in Florida, North Carolina, and Michigan—to factory and to retail stores, the
> Is a capable process a perfect process? That is, does a capable process generate only output that meets specifications? Explain.
> In the ideal world, we would like our processes to have a high process capability. Discuss.
> What is the purpose of acceptance sampling?
> What is a P-chart used for?
> Discuss the managerial issues regarding the use of control charts.
> What is a run test, and when is it used?
> What are the acceptable quality level (AQL) and the lot tolerance percentage defective (LTPD)? How are they used?
