Matching Supply with Demand: An Introduction to Operations Management

Professor Cachon is the Fred R. Sullivan Professor of Operations, Information, and Decisons at The Wharton School of the University of Pennsylvania, where he teaches a variety of undergraduate, MBA, executive, and Ph.D. courses in operations management. His research focuses on operations strategy, and in particular, on how operations are used to gain competitive advantage. His administrative responsibilities have included Chair of the Operations, Information and Decisions Department, Vice Dean of Strategic Initiatives for the Wharton School, and President of the Manufacturing and Service Operations Society. He has been named an INFORMS Fellow and a Distinguished Fellow of the Manufacturing and Service Operations Society. His articles have appeared in Harvard Business Review, Management Science, Marketing Science, Manufacturing & Service Operations Management, and Operations Research. He is the former editor-in-chief of Manufacturing & Service Operations Management, and Management Science. He has consulted with a wide range of companies, including 4R Systems, Ahold, Americold, Campbell Soup, Gulfstream Aerospace, IBM, Medtronic, and O'Neill. Before joining The Wharton School in July 2000, Professor Cachon was on the faculty at the Fuqua School of Business, Duke University. He received a Ph.D. from The Wharton School in 1995. He is an avid proponent of bicycle commuting (and other environmentally friendly modes of transportation). Along with his wife and four children he enjoys hiking, scuba diving and photography. Professor Terwiesch is the Andrew M. Heller Professor at the Wharton School of the University of Pennsylvania. He also is a professor in Wharton's Operations and Information Management Department as well as a Senior Fellow at the Leonard Davis Institute for Health Economics. His research on operations management, research and development, and innovation management appears in many of the leading academic journals, including Management Science, Operations Research, Marketing Science, and Organization Science. He has received numerous teaching awards for his courses in Wharton's MBA and executive education programs. Professor Terwiesch has researched with and consulted for various organizations, including a project on concurrent engineering for BMW, supply chain management for Intel and Medtronic, and product customization for Dell. Most of his current work relates to health care and innovation management. In the health care arena, some of Professor Terwiesch's recent projects include the analysis of capacity allocation for cardiac surgery procedures at the University of California-San Francisco and at Penn Medicine, the impact of emergency room crowding on hospital capacity and revenues (also at Penn Medicine), and the usage of intensive care beds in the Children's Hospital of Philadelphia. In the innovation area, recent projects include the management of the clinical development portfolio at Merck, the development of open innovation systems, and the design of patient-centered care processes in the Veterans Administration hospital system. Professor Terwiesch's latest book, Innovation Tournaments, outlines a novel, process-based approach to innovation management. The book was featured by BusinessWeek, the Financial Times, and the Sloan Management Review.

1. Introduction
2. The Process View of the Organization
3. Understanding the Supply Process: Evaluating Process Capacity
4. Estimating and Reducing Labor Costs
5. Batching and Other Flow Interruptions: Setup Times and the Economic Order Quantity Model
6. The Link between Operations and Finance
7. Quality and Statistical Process Control
8. Lean Operations and the Toyota Production System
9. Variablity and Its Impact on Process Performance: Waiting Time Problems
10. The Impact of Variability on Process Performance: Throughput Losses
11. Scheduling to Prioritize Demand
12. Project Management
13. Forecasting
14. Betting on Uncertain Demand: The Newsvendor Model
15. Assemble-to-Order, Make-to-Order, and Quick Response with Reactive Capacity
16. Service Levels and Lead Times in Supply Chains: The Order-up-to Inventory Model
17. Risk-Pooling Strategies to Reduce and Hedge Uncertainty
18. Revenue Management with Capacity Controls
19. Supply Chain with Capacity Coordination

APPENDIXES
1. Statistics Tutorial
2. Tables
3. Evaluation of the Loss Function
4. Equations and Approximations
5. Solutions to Selected Practice Problems