On any given day, Celebrity Cruises, Inc. has tens of thousands of passengers at sea on more than a dozen spectacular ships, spanning 7 continents and 75 countries. With this level of capital investment along with the responsibility for the happiness and safety of so many passengers, excellence in operations is required. To make it all work, the 10 operations management decisions must be executed flawlessly. From product design (which encompasses the ship’s layout, the food, and 300 destinations), to scheduling, supply chain, inventory, personnel, maintenance, and the processes that hold them together, OM is critical. Cruise lines require precise scheduling of ships, with down to-the-minute docking and departure times. In addition to ship and port scheduling, some 2,000 plus crew members must be scheduled. And there are many schedule variations. Entertainers may arrive and leave at each port, while officers may have a schedule of 10 weeks on and 10 weeks off. Other crew members have on board commitments varying from 4 to 9 months. With $400 million invested in a ship and more than 5,000 lives involved in a cruise, detailed processes to ensure maintenance and reliability are vital. The modern ship is a technological marvel with hundreds of electronic monitors operating 24/7 to track everything from ship speed and location, to sea depth, to shipboard power demand and cabin temperature. Celebrity’s ship layout, destinations, and routing are adjusted to meet seasonal demands and the expectations of its premium market segment. With destinations from Alaska to Europe to Asia, crews are recruited worldwide, with as many as 70 nationalities represented. Instilling a quality culture requires an aggressive quality service orientation and, of course, meticulous cleanliness and attention to detail. Processes for food preparation, laundry, quality, and maintenance are complete and detailed. A cruise ship, as a moving city, requires a comprehensive and precise supply chain that replenishes everything from food to fuel to soap and water. Land-based buyers support Celebrity’s annual food and beverage purchases that exceed $110 million. Included in these expenditures are weekly shipments of 6 to 10 containers from the Miami headquarters destined for ships in European ports. An on board staff organizes inventories to support this massive operation. The logistics effort includes hedging the weekly use of 24,000 gallons of fuel per ship with purchases 6 years into the future. Reliable global supply chains have been developed that deliver the required inventory on a tight time frame. These crucial shipboard systems typically represent the best of operations management. Such is the case at Celebrity Cruises. Discussion Questions 1. Describe how the 10 OM decisions are implemented at Celebrity Cruises, Inc. 2. Identify how the 10 OM decisions at Celebrity Cruises differ from those decisions at a manufacturing firm. 3. Identify how the 10 OM decisions at Celebrity Cruises differ from those decisions at a retail store. 4. How are hotel operations on a ship different from those at a land-based hotel?
> The first vending machine that William Kane, Inc., assembled took 80 labor-hours. Estimate how long the fourth machine will require for each of the following learning rates: a) 95% b) 87% c) 72%
> Susan Sherer, an IRS auditor, took 45 minutes to process her first tax return. The IRS uses an 85% learning curve. How long will the: a) 2nd return take? b) 4th return take? c) 8th return take?
> An equipment manufacturer wants to decide on the location of a new facility. Currently, the company has a plant in Egypt and a plant in Turkey. The company is deciding where to build a new plant—Morocco or United Arab Emirates. Use the
> The Donna Mosier Clothing Group owns factories in three towns (W, Y, and Z), which distribute to three retail dress shops in three other cities (A, B, and C). The following table summarizes factory availabilities, projected store demands, and unit shippi
> Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion- dollar company, headquartered in Dallas, now has 41 products
> In Solved Problem C.1, Williams Auto Top Carriers proposed opening a new plant in either New Orleans or Houston. Management found that the total system cost (of production plus distribution) would be $20,000 for the New Orleans site. What would be the to
> A commercial bakery in Dubai has three production lines that supply baked goods to four stores. The cost of shipment from each production line to each store (in AED per 1,000 pieces) is shown in the table below. How many units should be shipped from each
> The following table is the result of one or more iterations. a) Complete the next iteration using the stepping-stone method. b) Calculate the “total cost” incurred if your results were to be accepted as the final solut
> Consider the transportation table below. The solution displayed was obtained by performing some iterations of the transportation method on this problem. What is the current cost of the plan that would be obtained by performing one more iteration of the s
> Refer to the table that follows. a) Use the northwest-corner method to find an initial feasible solution. What must you do before beginning the solution steps? b) Use the intuitive lowest-cost approach to find an initial feasible solution. Is this approa
> Consider the transportation table at right. Unit costs for each shipping route are in dollars. What is the total cost of the basic feasible solution that the intuitive lowest-cost method would find for this problem?
> The following table presents cost, capacity, and demand data for a transportation problem in Jinfeng Yue’s furniture company. Set up the appropriate transportation table and find the initial solution using the northwest-corner rule.
> For the following Gregory Bier Corp. data, find the starting solution and initial cost using the northwest-corner method. What must you do to balance this problem?
> A juice manufacturer produces juice at plants in Cairo, Alexandria, and Aswan. These are sent to regional distributors in Giza, Tanta, and Sohag. The shipping costs vary, and the company would like to find the least-cost way to meet the demands at each o
> Using the data from Problem C.10 and the unit production costs listed in the following table, show which locations yield the lowest cost.
> Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm’s primary retail outlets are located within a 400-mil
> Randa’s Bakery, Egypt, is considering adding a fourth plant to its three existing facilities in 6th of October, 10th of Ramadan, and Obour. Both Giza and Mokatam are being considered. Evaluating only the transportation costs per unit as
> Find an initial solution to the following transportation problem. a) Use the northwest-corner method. What is its total cost? b) Use the intuitive lowest-cost approach. What is its total cost? c) Using the stepping-stone method, find the optimal solution
> Zhu Manufacturing is considering the introduction of a family of new products. Long-term demand for the product group is somewhat predictable, so the manufacturer must be concerned with the risk of choosing a process that is inappropriate. Faye Zhu is VP
> Leah Johnson, director of Urgent Care of Brookline, wants to increase capacity to provide low-cost flu shots but must decide whether to do so by hiring another full-time nurse or by using part-time nurses. The following table shows the expected costs of
> The following payoff table provides profits based on various possible decision alternatives and various levels of demand at Robert Klassan’s print shop: The probability of low demand is 0.4, whereas the probability of high demand is 0.6
> The Adam Smith Trading Company wants to increase its markets and conduct business in more countries. It has done a pre-study about costs for opening new offices and approximate yearly profits (all numbers in thousands euro). The following table summarize
> Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.4 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and A
> A large hypermarket based in Kuwait is considering different plans for expansion. The management has identified three possible alternatives: build two new stores, build one new store, or do nothing. The expected payoff will depend on future demand which
> Chris Suit is an administrator for Lowell Hospital. She is trying to determine whether to build a large wing on the existing hospital, a small wing, or no wing at all. If the population of Lowell continues to grow, a large wing could return $150,000 to t
> Bakery Products is considering the introduction of a new line of pastries. In order to produce the new line, the bakery is considering either a major or a minor renovation of its current plant. Bill Wicker, head of operations, has developed the following
> Arnold Palmer Hospital, one of the nation’s top hospitals dedicated to serving women and children, is a large business with more than 2,000 employees working in a 431-bed facility totalling 676,000 square feet in Orlando, Florida. Like many other hospita
> Andrew Thomas, a sandwich vendor at Hard Rock Cafe’s annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd): The probabilities associated with the sta
> In the TV show and game “Who Wants to be a Millionaire?” the participants get four choices for each question and the questions get tougher and tougher the longer a participant stays in the game. A participant can decid
> The Machine Shop is a retailer of tools for carpenters. Their top selling product is a revolutionary saw, which sells for €999. However, they are short on cash and try to hold the storage as short as possible. A customer interested in the saw buys with a
> A construction company wants to decide on whether to bid for a new project or not. If the company decides to bid, there is a KWD 10,000 cost associated with preparing the preliminary proposal. The probability that the company will be shortlisted for the
> The pharmaceutical company Neuronome is in late clinical phase of a new cancer treatment. However, their competitor Immunoneuron is also in the late clinical phase of a pharmaceutical for the same treatment. They have to make a decision about increasing
> A large investment firm wants to decide on how to invest one million dollars. The board is considering three options: invest in stocks, invest in T-Bills, or do nothing. There are two possibilities for the market: favourable and unfavourable. The CEO has
> Abdulla wants to decide on the best route to take for work from two possible routes: A and B. The time taken to work on each route depends on the traffic. If Abdulla takes route A, it will take him 25 minutes if the traffic is moderate and 45 minutes if
> A car manufacturer supplies brake pads from two main suppliers. Historical quality information indicates that for Supplier 1, there is a 65% probability that a given lot would contain 3% defects, 25% portability that a given lot would contain 2% defects,
> Ahmed Saif is the manager of a large agriculture firm that owns 100,000 acres in the new valley project of Toshka in the Western desert of Egypt. He now needs to decide on which one of three crops to grow during the upcoming summer season. Ahmed has obta
> Al-Andalus retail store in Saudi Arabia wants to decide on whether to build a large or a small store in the city of Dammam. The expected net present value of the return per month of the decision will depend on the future demand, which is expected to be e
> Like most other manufacturers, Regal Marine finds that it must spend a huge portion of its revenue on purchases. Regal has also found that the better its suppliers understand its end users, the better are both the supplier’s product and Regal’s final pro
> Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian’s problem is to decide how large his station should be. The annual retu
> Given the following conditional value table, determine the appropriate decision assuming that each state of nature has an equal likelihood of occurring:
> The following payoff table provides profits based on various possible decision alternatives and various levels of demand: The probability of low demand is 0.4, whereas the probability of medium and high demand is each 0.3. a) What is the highest possible
> Given the following conditional value table, determine the appropriate decision under uncertainty using a) maximax b) maximin c) equally likely
> The city of Belgrade, Serbia, is contemplating building a second airport to relieve congestion at the main airport and is considering two potential sites, X and Y. Hard Rock Hotels would like to purchase land to build a hotel at the new airport. The valu
> The organizing company of the famous rapper Sean Paul’s concert in Dubai has decided to print shirts to be sold in the event. The company decision is to either print 5,000, 10,000, or 20,000 shirts. The expected profit from selling the
> Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that
> A news vendor wants to decide on the number of magazines to order for the next day. Based on his experience, he believes that demand for the magazine would range from 400–900 based on the following probability distribution table: Each m
> Consider the following decision table, which Joe Blackburn has developed for Vanderbilt Enterprises: Which decision alternative maximizes the expected value of the payoff?
> Given the following conditional value table, determine the appropriate decision under uncertainty using: a) Maximax b) Maximin c) Equally likely
> Darden Restaurants, owner of popular brands such as Olive Garden and LongHorn Steakhouse, requires unique supply chains to serve more than 300 million meals annually. Darden’s strategy is operations excellence, and Senior VP Jim Lawrence’s task is to ens
> A medical control system has three components in series with individual reliabilities (R1, R2, R3) as shown: What is the reliability of the system?
> Merrill Kim Sharp has a system composed of three components in parallel. The components have the following reliabilities: R1 = 0.90, R2 = 0.95, R3 = 0.85 What is the reliability of the system?
> What is the overall reliability that bank loans will be processed accurately if each of the five clerks shown in the chart has the reliability shown? Hint: The three paths are done in parallel, followed by an additional independent step.
> What is the reliability of the following parallel production process? R1 = 0.95, R2 = 0.90, R3 = 0.98.
> A manufacturer of disk drives for notebook computers wants an MTBF of at least 50,000 hours. Recent test results for 10 units were one failure at 10,000 hours, another at 25,000 hours, and two more at 45,000 hours. The remaining units were still running
> Robert Klassen Manufacturing, a medical equipment manufacturer, subjected 100 heart pacemakers to 5,000 hours of testing. Halfway through the testing, 5 pacemakers failed. What was the failure rate in terms of the following? a) Percentage of failures? b)
> A new aircraft control system is being designed that must be 98% reliable. This system consists of three components in series. If all three of the components are to have the same level of reliability, what level of reliability is required?
> Given the probabilities that follow for Ronny Richardson’s print shop, find the expected breakdown cost. The cost per breakdown is $10.
> The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,000
> David Hall, chief of the maintenance department at Mechanical Dynamics, has presented you with the following failure curve. What does it suggest?
> Everyone—managers and hourly employees alike—who goes to work for Hard Rock Cafe takes Rock 101, an initial 2-day training class. The Hard Rock value system is to bring a fun, healthy, nurturing environment into the Hard Rock Cafe culture. This initial c
> A testing process at Boeing Aircraft has 400 components in series. The average reliability of each component is 99.5%. Use Figure 17.2 to find the overall reliability of the whole testing process. Data from Figure 17.2:
> Each breakdown of a graphic plotter table at Airbus Industries costs $50. Find the expected daily breakdown cost, given the following data:
> What are the expected number of yearly breakdowns for the power generator at Orlando Utilities that has exhibited the following data over the past 20 years?
> You have a system composed of a serial connection of four components with the following reliabilities: What is the reliability of the system?
> The credit card issuing process at Atlanta Bank’s VISA program consists of 10 steps performed in series by different bank employees. The average reliability of each employee is 98%. Use Figure 17.2 in the text to help manager Yusen Xia
> A typical retail transaction consists of several smaller steps, which can be considered components subject to failure. A list of such components might include: Let the eight probabilities of success be .92, .94, .99, .99, .98, .97, .95, and .96. What is
> As VP for operations at Méndez-Piñero Engineering, you must decide which product design, A or B, has the higher reliability. B is designed with backup units for components R3 and R4. What is the reliability of each design?
> Rick Wing, salesperson for Wave Soldering Systems, Inc., has provided you with a proposal for improving the temperature control on your present machine. The machine uses a hot-air knife to cleanly remove excess solder from printed circuit boards; this is
> Elizabeth Irwin’s design team has proposed the following system with component reliabilities as indicated: What is the reliability of the system? Hint: The system functions if either R2 or R3 work.
> How much would reliability improve if the medical control system shown in Problem 17.9 changed to the redundant parallel system shown in Problem 17.10? Data from Problem 17.9: A medical control system has three components in series with individual relia
> With thousands of employees spread across nearly 100 locations in the United States, Mexico, and Canada, building a committed and cohesive workforce is a challenge. Yet Alaska Airlines is making it work. The company’s “people” focus states: “While airpla
> What is the reliability of the system shown?
> The Beta II computer’s electronic processing unit contains 50 components in series. The average reliability of each component is 99.0%. Using Figure 17.2, determine the overall reliability of the processing unit. Data from Figure 17.2:
> The distributor of lighting system mentioned in Problem 16.8 has decided to implement a Lean management program. As a result, the firm has signed a long-term contract with a supplier to place orders online, which will reduce ordering cost to LE 100 per o
> A distributor of lighting system in Egypt uses the EOQ model to manage its inventory from LED light bulbs. The annual demand for LED light bulbs is 200,000 units, holding cost is LE 12 per unit per year, and ordering cost from supplier is LE 2,000 per or
> Maggie Moylan Motorcycle Corp. uses kanbans to support its transmission assembly line. Determine the size of the kanban for the mainshaft assembly and the number of kanbans needed.
> Pauline Found Manufacturing, Inc., is moving to kanbans to support its telephone switching-board assembly lines. Determine the size of the kanban for subassemblies and the number of kanbans needed. Setup cost = $30 Annual holding cost = $120 per subassem
> Tej Dhakar’s company wants to establish kanbans to feed a newly established work cell. The following data have been provided. How many kanbans are needed?
> Al-Arabi Company in Egypt is a manufacturer of steel knobs. The manager decided to introduce the Kanban system to reduce inventory. Using the information in the table below, how many Kanbans are required?
> Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the following data to prepare for a reduced lot size. The firm uses a work year of 305 days. a) What is the setup cost, based on the desired lot size? b) What is the
> Given the following information about a product at Michael Gibson’s firm, what is the appropriate setup time? Annual demand = 39,000 units Daily demand = 150 units Daily production = 1,000 units Desired lot size = 150 units Holding cost per unit per year
> Fast & Fresh Pastry is a medium-sized company in Australia, specialized in baking and distributing pastries in high volumes. They serve gas stations, convenience stores, and cafeterias. Their products line includes cinnamon rolls, croissants, bear cl
> Flores Manufacturing, Inc., is moving to kanbans to support its electronic-board assembly lines. Determine the size of the kanban for subassemblies and the number of kanbans needed. Setup cost = $25 Annual holding cost = $200 per subassembly Daily produc
> Ferdows Electronics, Inc. (FEI), produces short runs of custom microwave radios for railroads and other industrial clients. You have been asked to reduce inventory by introducing a kanban system. After several hours of analysis, you develop the following
> How do the answers to Problems 16.8 and 16.9 provide insights about the implementation of JIT Lean Management Systems? Data from Problem 16.8: A distributor of lighting system in Egypt uses the EOQ model to manage its inventory from LED light bulbs. The
> Randas Commercial Bakery produces cupcakes to be sold in supermarkets in Egypt. The production line is available 12 hrs/day and is currently producing in large lots. The manager wants to reduce the production cycle to 4 hours. Given the data below, what
> Daniel Glaser, chairman of the College of San Antonio’s business department, needs to assign professors to courses next semester. As a criterion for judging who should teach each course, Professor Glaser reviews the past 2 yearsâ&
> Tigers Sports Club has to select four separate coed doubles teams to participate in an interclub table tennis tournament. The preselection results in the selection of a group of four men—Raul, Jack, Gray, and Ajay—and
> The Baton Rouge Police Department has five detective squads available for assignment to five open crime cases. The chief of detectives, Jose Noguera, wishes to assign the squads so that the total time to conclude the cases is minimized. The average numbe
> Jamison Day Consultants has been entrusted with the task of evaluating a business plan that has been divided into four sections—marketing, finance, operations, and human resources. Chris, Steve, Juana, and Rebecca form the evaluation te
> A sales manager for a large construction equipment company has offices in four Saudi Arabia cities. As part of the monthly assignment, the manager wants a salesman from each office to fly and meet buyers in four other cities. The table below shows the co
> The marketing manager of a pharmaceutical company in Saudi Arabia has four salesmen that can serve four different sales regions. Considering the capabilities of the salesmen, their knowledge of the different medical providers, and the nature of regions,
> When President Bob Collins began his career at Wheeled Coach, the world’s largest manufacturer of ambulances, there were only a handful of employees. Now the firm’s Florida plant has a workforce of 350. The physical plant has also expanded, with offices,
> Given the following demand for waiters and waitresses at S. Ghosh Bar and Grill, determine the minimum wait staff needed with a policy of 2 consecutive days off.
> Four employees are to be assigned to four different jobs. The time per job per employee in minutes is given in the table below. Find the optimal assignment of employees to jobs to minimize the total completion time.
> The table below shows the weekly demand for security officers at a small mall in Kuwait. Determine the minimum number of security officers needed with 2 consecutive days off.
> Drew Rosen Automation Company estimates the data entry and verifying times for four jobs as follows: In what order should the jobs be done if the company has one operator for each job? Illustrate the time-phased flow of this job sequence graphically.
> At the campus copy shop, six jobs have arrived in the order shown (A, B, C, D, E, and F) at the beginning of the day (today, which is a workday). All of the jobs are due at various times today. Your task is to evaluate four common sequencing rules. a) Se
> Courtney is a programmer receiving requests each week to analyze a large database. Five jobs were on her desk Monday morning, and she must decide in what order to write the code. Assume that all jobs arrived today (day 1 and hour 1) in the order shown be
> Kamauf Custom Glass, Inc., manufactures custom windows primarily for homes and churches. Small repair jobs may take a few hours, but larger jobs may take hundreds of hours. How to schedule the jobs is a continuing issue? The scheduler has decided to see
