COURSE OBJECTIVES
This course contains the theories and applications of operations management. It
UNIVERSITI SAINS MALAYSIA
THE BACHELOR OF MANAGEMENT DEGREE
Semester II, 2010/2011 Academic Session
COURSE OUTLINE
ATW 223 – OPERATIONS MANAGEMENT
Lecturer: Mr. Soh Keng Lin
Office: Room 244, School of Management, Building E43
Telephone: 04-6533888 ext 2317
Email: klsoh@usm.my
Lecture
Venue: DK “S”
Day/Time: Tuesdays, 9am - 11am
Consultation hours by appointments: Posted outside my office door
Rev1
comprises strategies, tactics and operations of management of the transformation
processes and the delivery of goods and services. Therefore, this course considers
operations management problems and provides qualitative and quantitative solutions to
improve efficiency and effectiveness.
Course topics include an introduction to operations management, global competition,
quality management, project management, forecasting, product design, process design,
capacity decisions, location and layout decisions, work study and learning curves,
supply chain management, materials management, production planning and scheduling,
maintenance, linear programming and decision trees.
COURSE EVALUATION
Coursework
Online tutorial exercises* 5%
Mid Semester Exams and Quizzes ** 20%
Assignment - Project 15%
Final Examination (Comprehensive) 60%
Total 100%
*If there are no online tutorial exercises, the 5% will be re-allocated to mid
semester exams and quizzes. You will be duly informed if marks are given for
completing online tutorial exercises on the first meeting.
** On the spot quizzes may be given.
Grades and marks as per University rules.
ATTENDANCE
USM attendance and barring rules apply. You are requested to be punctual for all
classes. Please let me know via email or SMS if you are unable to attend classes or
30.12.2010 tutorials. Do not forget to type your name and class before you [SEND] email or SMS
to me.
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PREFERRED TEXTBOOK
Heizer, Jay, and Barry Render. Principles of Operations Management. 10th Edition.
Upper Saddle River, New Jersey: Prentice-Hall, Inc. 2011.
IT IS A VIOLATION OF COPYRIGHT LAWS TO MAKE PHOTOCOPIES.
OTHER REFERENCE MATERIALS
Arnold, J.R. Tony, and Stephen N. Chapman. Introduction to Materials
Management. 5th Edition. Upper Saddle River, New Jersey: Prentice Hall, Inc.,
2004
Jacobs, F. Roberts, Richard B. Chase, and Nicholas J. Aquilano. Operations
Management For Competitive Advantage 12th Edition. Boston: McGraw-Hill,
2009.
Burt, David N., Donald W. Dobler, and Stephen L. Starling. World Class Supply Chain
: The Key to Supply Chain Management. 7th Edition, McGraw-Hill, NY., 2003.
Coyle, John J., Edward J. Bardi, and C. John Langley Jr. The Management of Business
Logistics. A Supply Chain Perspective. 7th Edition. Mason, Ohio: South-Western. 2003.
Dewan Bahasa dan Pustaka. Istilah Pentadbiran Perniagaan Bahasa Inggeris-
Bahasa Malaysia. DBP, 1992
Evans, James R. and David a. Collier. Operations Management. An Integrated
Goods and services Approach. Mason, Ohio: Thomson Corporation, 2007
Fawcett, Stanley E., Lisa M. Ellram, and Jeffrey A. Ogden. Supply Chain
Management: From Vision to Implementation. Upper Saddle River, New Jersey:
Pearson Education, Inc., 2007.
Fitzsimmons, James A., and Mona J. Fitzsimmons. Service Management. Operations,
Strategy, Information Technology. 6th Edition. Boston: McGraw-Hill, 2008.
Finch, Byron J. Operations Now – Supply Chain Profitability and Performance. . 3rd
Edition, McGraw-Hill, NY., 2008.
Gaither, Norman, and Greg Frazier. Operations Management. 9th Edition. Cincinati,
Ohio: South-Western. 2003.
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Gido, Jack, and James P. Clements. Effective Project Management Ohio:
Southwestern. 2006.
Johnston, Robert, and Graham Clark. Service Operations Management. Improving
Service Delivery. 3rd edition. Harlow, England: FT Prentice Hall, 2008.
Knod, Edward M. and Richard J. Schonberger. Operations Managment. Meeting
Customers’ Demands. Seventh edition. New York. McGraw-Hill. 2001
Krajewski, Lee J., Larry P. Ritzman, and Manoj K. Malhotra. Operations Management
– Processes and Supply Chain 9th Edition. Upper Saddle River, New Jersey: Prentice-
Hall, Inc. 2010.
Meredith, R. Jack, and Samuel J. Mantel. Project Management : A Managerila
Approach. 7th Edition. New York: John Wiley & Sons, Inc., 2010
Montgomery, Douglas C. Introduction to Statistical Quality Control. 6h Edition. New
York: John Wiley & Sons, Inc., 2009.
Russell, Roberta S., and Bernard W. Taylor III. Operations Management – Along the
Supply Chain. 6th Edition. New York: John Wiley & Sons, Inc., 2009.
SIRIM. Malaysian Standard ISO 9001: 2000. Quality management system -
Requirements.
Slack, Nigel, Stuart Chambers, and Robert Johnston. Operations Management 4th
Edition. Harlow, England: Prentice Hall – Financial Times. 2004.
Soh, Keng Lin, Noorliza Karia, Suhaiza Hanim, Shukri Abdullah. Ishak Ismail. Edisi
kedua. Pengurusan Operasi. Kuala Lumpur: Prentice-Hall Inc.
Sower, Victor E., Michael J. Savoie, and Stephen Renick An Introduction to
Quality Management and Engineering. Upper Saddle River, New Jersey: Prentice-
Hall, Inc., 1999.
Sower, Victor E., Jaideep Motwani, and Michael J. Savoie. Classic Readings in
Operations Management. Fort Worth: The Dryden Press, 1995.
Star, Martin K. Foundations of Production and Operations Management. Mason,
Ohio: Thomson Corporation, 2007
Stevenson, William J. Operations Management. 10th edition. Boston: McGraw-Hill 1 Continue
– Irwin, 2009 Chapter 2 – The global environment and
operations strategy
Summers, Donna C.S. Quality Management. Creating and Sustaining Organizational When you complete this chapter you should be
Effectiveness. 2nd Edition. Upper Saddle River, New Jersey: Prentice-Hall, Inc. 2009. able to:
1. Define mission and strategy
2. Identify and explain three strategic
SCHEDULE of COURSE CONTENTS approaches to competitive advantage
3. Identify and define the 10 decisions of
WEEK CHAPTERS, TOPICS AND LEARNING OUTCOMES operations management
NUMBER 4. Understand the significant key success
factors and core competencies
1 Chapter 1 – Introduction to operations
5. Identify and explain four global
management
operations strategy options
When you complete this chapter you should be 6. consider ethics in decision making
able to: 7. consider sustainability in decision
1. Define operations management making
2. Explain the distinction between goods and
services The materials in Chapter 1 and 2 are relatively
3. Explain the difference between production easy to understand. As more time is taken up to
and productivity explain course outline and little left to
4. Compute single-factor productivity complete the explanation of Chapters 1 and 2,
5. Compute multifactor productivity kindly read up the chapters. You may ask
6. Identify the critical variables in questions of Chapters 1 and 2 in the next class
enhancing productivity lecture.

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2 Chapter 4 – Forecasting demand
When you complete this chapter you should be
able to:
1. Understand the three time horizons and
which models apply for each use
2. Explain when to use each of the four
qualitative models
3. Apply the naive, moving average,
exponential smoothing, and trend methods
4. Compute three measures of forecast
accuracy
5. Develop seasonal indexes
6. Conduct a regression and correlation
analysis
7. Use a tracking signal
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3 Chapter 5 Product design
When you complete this chapter you should be
able to:
1. Define product life cycle
2. Describe a product development system
3. Build a house of quality
4. Describe how time-based competition is
implemented
5. Describe how products and services are
defined by operations management
6. Describe the documents needed for
production
7. Describe customer participation in the
design and production of services
8. Apply decision trees to product issues
9. Module B
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3 Continue
Chapter 6 – Quality management and
international standards
When you complete this chapter you should be
able to:
1. Define quality and TQM
2. Describe the ISO international quality
standards
3. Explain Six Sigma
4. Explain how benchmarking is used
5. Explain quality robust products and
Taguchi concepts
6. Use the seven tools of TQM
Chapter 6s – Statistical process control
When you complete this chapter you should be
able to:
1. Explain the use of a control chart
2. Explain the role of the central limit
theorem in SPC
3. Build x-charts and R-charts
4. List the five steps involved in building
control charts
5. Build p-charts and c-charts
6. Explain process capability and compute Cp
and Cpk
7. Explain acceptance sampling
8. Compute the AOQ
5 Chapter 7 – Process design
When you complete this chapter you should be
able to:
1. Describe four production processes
2. Compute crossover points for different
processes
3. Use the tools of process analysis
4. Describe customer interaction in process
design
5. Identify recent advances in production
technology
6. Discuss the 4 Rs of sustainability
Chapter 7s – Capacity planning
When you complete this chapter you should be
able to:
1. Define capacity
2. Determine design capacity, effective
capacity, and utilization
3. Perform bottleneck analysis
4. Compute break-even analysis
5. Determine the expected monetary value of
a capacity decision
6. Compute net present value
6 Mid semester break
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7 Chapter 8 – Location decisions
When you complete this chapter you should be
able to:
1. Identify and explain seven major factors
that effect location decisions
2. Compute labor productivity
3. Apply the factor-rating method
4. Complete a locational break-even analysis
graphically and mathematically
5. Use the center-of-gravity method
6. Understand the differences between
service and industrial-sector location
strategies
7. Module C
8 Chapter 9 – Layout decisions
When you complete this chapter you should be
able to:
1. Discuss important issues in office layout
2. Define the objectives of retail layout
3. Discuss modern warehouse management and
terms such as ASRS, cross-docking, and
random stocking
4. Identify when fixed-position layouts are
appropriate
5. Explain how to achieve a good process-
oriented facility layout
6. Define work cell and the requirements of
a work cell
7. Define product-oriented layout
8. Explain how to balance production flow in
a repetitive or product-oriented facility
9 Chapter 10 Design and work measurement
When you complete this chapter you should be
able to:
1. Describe labor planning policies
2. Identify the major issues in job design
3. Identify major ergonomic and work
environment issues
4. Use the tools of methods analysis
5. Identify four ways of establishing labor
standards
6. Compute the normal and standard times in
a time study
7. Find the proper sample size for a time
study
8. Module E
Chapter 11 – Managing the supply chain
When you complete this chapter you should be
able to:
1. Explain the strategic importance of the
supply chain
2. Identify six supply-chain strategies
3. Explain issues and opportunities in the
supply chain
4. Describe the steps in vendor selection
5. Explain major issues in logistics
management
6. Compute percent of assets committed to
inventory and inventory turnover
Chapter 11S – Outsourcing as a supply-chain
strategy
When you complete this chapter you should be
able to:
1. Explain how core competencies relate to
outsourcing
2. Describe the risks of outsourcing
3. Use factor rating to evaluate both
country and provider outsourcers
4. List the advantages and disadvantages of
outsourcing
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10 MID-SEMESTER EXAM
Please bring along a scientific calculator
11 Chapter 12 – Managing inventory
When you complete this chapter you should be
able to:
1. Conduct an ABC analysis
2. Explain and use cycle counting
3. Explain and use the EOQ model for
independent inventory demand
4. Compute a reorder point and safety stock
5. Apply the production order quantity model
6. Explain and use the quantity discount
model
Understand service levels and probabilistic
inventory models
Chapter 13 – Aggregate scheduling
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When you complete this chapter you should be
able to:
1. Define aggregate planning
2. Identify optional strategies for
developing an aggregate plan
3. Prepare a graphical aggregate plan
4. Solve an aggregate plan via the
transportation method of linear
programming
5. Understand and solve a yield management
problem
13 Submission of assignment 14 Chapter 15 – Scheduling for the short term
Chapter 14 – Material requirements planning When you complete this chapter you should be
(MRP) able to:
1. Explain the relationship between short-
When you complete this chapter you should be term scheduling, capacity planning,
able to: aggregate planning, and a master schedule
1. Develop a product structure 2. Draw Gantt loading and scheduling charts
2. Build a gross requirements plan 3. Apply the assignment method for loading
3. Build a net requirements plan jobs
4. Determine lot sizes for lot-for-lot, EOQ, 4. Name and describe each of the priority
and PPB sequencing rules
5. Describe MRP II 5. Use Johnson’s rule
6. Describe closed-loop MRP 6. Define finite capacity scheduling
7. Describe ERP 7. Use the cyclical scheduling technique

Chapter 16 – JIT., lean operations, and the

Toyota production systems
When you complete this chapter you should be
able to:
1. Define just-in-time, TPS, and lean
operations
2. Define the seven wastes and the 5 Ss
3. Explain JIT partnerships
4. Determine optimal setup time
5. Define kanban
6. Compute the required number of kanbans
7. Explain the principles of the Toyota
Production System

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 15 Chapter 3 – Managing projects techniques of operations management that are acquired during lectures, tutorial
When you complete this chapter you should be discussions, and from your experiences and observations, and selected readings.
able to:
1. Use a Gantt chart for scheduling Examples of industries:
2. Draw AOA and AON networks The following can be your choices. Relate your writings with operations
3. Complete forward and backward passes for management of goods (manufacturing) or services of industries such as aviation,
a project automotive, textiles, agriculture, insurance, banking, education, and construction.
4. Determine a critical path
5. Calculate the variance of activity times Examples of topics
6. Crash a project
Managing quality in a service organization
Chapter 17 – Maintenance and reliability Statistical process control using attribute and variable charts
decisions Layout of a fast food restaurant
When you complete this chapter you should be Product design for a new car
able to: Project management of the construction of a school
1. Describe how to improve system Forecasting for capacity decisions for a palm oil mill
reliability Production planning in a making biscuits
2. Determine system reliability Materials management for book production
3. Determine mean time between failure Supply chain management or logistics or warehousing.
(MTBF)
4. Distinguish between preventive and Contents
breakdown maintenance
5. Describe how to improve maintenance Write a report or proposal of your chosen topic containing elements of fiction,
6. Compare preventive and breakdown non-fiction, or semi-fiction. The assignment must contain applications and theories
maintenance costs of operations management. The assignment can be classified into one of the
7. Define autonomous maintenance following types.
Fiction – using your own imaginative constructs based on operations principles.
16 Self study week Non-fiction – real events. Pseudonyms can be used. Improvement proposals are
required.
17-19 USM Final Exams Semi fiction – real events with imaginative constructs. Improvement proposals are
encouraged.

ASSIGNMENT
Assignment Objective
This assignment will make you think of the issues and challenges faced by
producers of goods and services in relation to global and local competition.
Therefore this assignment will encourage you to use your knowledge and
A suggested format is as follows: Front cover, title page, acknowledgement, table
of contents, list of tables, list of figures, executive summary, introduction, your
selected operations management strategies or techniques and the proposals,
conclusions, reference page, and back cover. The executive summary should not
be more than two pages. Write the total number of words in the assignment at the
end of the Executive Summary.

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Required on the front cover are the following: PROFESSIONAL MAGAZINES

At the north-east write FICTION, NON-FICTION, or SEMI FICTION to indicate Asian Business
the type of contents. Business Week
Course name: Operations Management Forbes
Course code: ATW223/3 Harvard Business Review
Sem II, Year 2010/2011 Malaysian Business
Topic: Packaging
Lecturer: Mr. Soh Keng Lin Packaging Digest
Authors: Your group member names, matric number, and mobile numbers in an Plastic Technology
ascending alphabetical order. Quality Progress.

"Plagiarism" ACADEMIC JOURNALS

You are required to write all sources of your information on the REFERENCE
page. All references must contain page numbers. References may be stated at the You may visit the websites of the following journals to read related articles.
foot of the page, at the end of each chapter, or at the end of the report. You are
reminded that BIBLIOGRAPHY (which does not require page number of sources) Supply Chain Management Review
is not required in this report. The Journal of Business Forecasting
Production and Inventory Management Journal
A FAIL grade will be given when "plagiarism" is proven. The Journal of Management Studies
Journal of Operations Management
Prepare power points for presentation purposes and you may be called upon to do Total Quality Management and Business Excellence
so. Attach a CD (containing the assignment and power points) when you submit
your assignment. Notes.

The number of group members will be announced in class. You are to form your
own groups. Please see me during the start of the lectures if you cannot find a
group to join by week 2.

All assignments must be submitted on week 13 as per schedule. Late submissions

will not be accepted.

TEACHING AND LEARNING METHODOLOGY:

Lecture, readings, discussions, use of computer software, calculations, and video

(if available). You are reminded that lecture and tutorial hours are not sufficient to
discuss all chapters in the textbook. Therefore kindly read up on your own.