Operations Management (33:623:386)

Fall 2007

All class policies are subject to change at instructor's discretion.

Quick Overview

Course Content

The core of this course is a mathematical way of approaching planning and decision-making problems arising in business and related areas.

This "mindset" is called Management Science (MS) or Operations Research (OR). Basically, the MS/OR approach involves forming (imperfect) mathematical models of business situations, analyzing these models, and then deciding on some "optimal" course of action. A key concept in this approach is to separate the analysis of a decision problem into two steps. The first step is mathematical modeling, and the second is the solution of the resulting abstract model. In this class, we will solve the problems with Excel.

There are two key ideas in applying MS/OR: the first is modeling decision making and planning as a mathematical optimization problem with variables, an objective function, and constraints. The second is to model uncertainty using the tools of probability theory. We will spend the first cc. 15 classes exploring the first idea, and the last cc. 10 classes exploring the second. We will cover a relatively small set of subtopics in each case, but try to explore them in depth, so you get a better feeling for the modeling process. Note that optimization and stochastic models can be combined much more closely than we attempt in this course, but that is a more advanced topic (called stochastic programming).

MS/OR is most helpful in situations where quantitative information is plentiful and there are relatively few intangible or psychological considerations, making it easier to produce accurate mathematical models. It is also particularly beneficial when the decision or planning situation is complex, making it hard for managers to simply "eyeball" the decision or "fly by the seat of their pants." Such situations arise most often at the operational level of the management hierarchy, and progressively less often at the higher levels (tactical and strategic). Hence the application to operations management. "Operations management" courses at some other schools may deal more with qualitative generalities of managing business operations; this course basically focuses on the quantitative tools needed for such management.

General Information

• Attendance: I do not take formal attendance, and attendance has no direct effect on your grade. However, I do informally monitor attendance, and most students find regular attendance essential to performing well in the class. Questions are strongly encouraged during class, and also during office hours.
• Exams: There will be two in-class midterm exams and a final. All exams will be closed book, but you can bring a one-page handwritten "cheat sheet". The final will be cumulative, covering all topics in the course.
• Homework: I am planning to give about 10 homework assignments. Typically, homework assignments will be due in class on Wednesday, the week after they were handed out. There is zero credit for late homework. I will drop your lowest two assignment scores when computing your overall homework performance, with late or missing assignments counting as a score of zero. Most homework problems will involve some computer work, but you have to submit all results on paper.
• Collaboration and cheating: You are allowed to seek or give help to (or collaborate with) other students on homework assignments. However, you must clearly indicate the assistance you received (e.g., ‘I got a hint for Problem 2 from J. Smith’, or ‘J. Smith and I worked together on Problem 3’). No collaboration of any kind is permitted on midterms and exams.
• Computer lab: All software needed for this course (Microsoft Excel, and the Solver and Yasai add-ins) are installed in the computer lab in the Levin building basement.
• Using non-lab computers: You may use the Levin computer lab, other university clusters, or your own computers. If the Solver does not appear on the "Tools" menu in Excel, you may have to go to "Add-ins..." and check the box marked "Solver". If Solver is not installed on your computer, you can install it from the Microsoft Office CD-ROM. On computers outside the lab, you will probably have to download the YASAI add-in from its website, and install it.
• Textbooks: There is only one text, a course pack called "Operations Management" from University Publishing Solutions. Your options for obtaining this text are:
• Buy a new edition from the Livingston bookstore.
• Buy a used Spring 2005 or Spring 2006 edition.
• Obtain a used Spring 2004 edition, but be aware of the differences between the two editions.
• Bringing books to class: Bring the course pack to all classes, except exams.

Grading

No letter grades are assigned to individual assignments or exams, only numeric scores from 0 to 100. Your course grade will be based on your aggregate score, combining your scores on all written class work with the following weights:

• 20% Homeworks (excluding your two worst scores)
• 20% First midterm
• 20% Second midterm
• 40% Final

If your final is higher than your lower midterm, then the final counts 50%, and the lower midterm only 10%.

The cutoffs for the final letter grades do not come in predetermined places, but will not be higher than 90 for A and 75 for C.

Projected Syllabus

For 10 classes, we will study a variety of applications of something called linear programming. We will spend 5 classes on a related topic called (mixed) integer programming. Finally, we will spend 10 classes on elementary probability modeling, using simulation as our main analytical tool. There are two in-class exams, and the last class of the semester will be a review session for the final exam.