Heizer om10 ch07

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Heizer om10 ch07

  1. 1. 7 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall7 Process Strategyand SustainabilityPowerPoint presentation to accompanyHeizer and RenderOperations Management, 10ePrinciples of Operations Management, 8ePowerPoint slides by Jeff Heyl
  2. 2. 7 - 2© 2011 Pearson Education, Inc. publishing as Prentice HallOutline Global Company Profile: Harley-Davidson Four Process Strategies Process Focus Repetitive Focus Product Focus Mass Customization Focus Comparison of Process Choices
  3. 3. 7 - 3© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Process Analysis and Design Flow Charts Time-Function Mapping Value-Stream Mapping Process Charts Service Blueprinting
  4. 4. 7 - 4© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Special Consideration for ServiceProcess Design Customer Interaction and ProcessDesign More Opportunities to ImproveService Processes Selection of Equipment andTechnology
  5. 5. 7 - 5© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Production Technology Machine Technology Automatic Identification Systems(AISs) and RFID Process Control Vision Systems Robots
  6. 6. 7 - 6© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Production Technology (cont.) Automated Storage and RetrievalSystems (ASRSs) Automated Guided Vehicles (AGVs) Flexible Manufacturing Systems(FMSs) Computer-Integrated Manufacturing(CIM)
  7. 7. 7 - 7© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Technology in Services Process Redesign Sustainability
  8. 8. 7 - 8© 2011 Pearson Education, Inc. publishing as Prentice HallLearning ObjectivesWhen you complete this chapter youshould be able to:1. Describe four production processes2. Compute crossover points fordifferent processes3. Use the tools of process analysis
  9. 9. 7 - 9© 2011 Pearson Education, Inc. publishing as Prentice HallLearning ObjectivesWhen you complete this chapter youshould be able to:4. Describe customer interaction inprocess design5. Identify recent advances inproduction technology6. Discuss the 4 Rs of sustainability
  10. 10. 7 - 10© 2011 Pearson Education, Inc. publishing as Prentice HallHarley-DavidsonRepetitive manufacturing works The leading U.S. motorcycle company Emphasizes quality and leanmanufacturing Materials as Needed system Many variations possible Tightly scheduled repetitiveproduction line
  11. 11. 7 - 11© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Flow DiagramTHE ASSEMBLY LINETESTING28 testsOil tank work cellShocks and forksHandlebarsFender work cellAir cleanersFluids and mufflersFuel tank work cellWheel work cellRoller testingIncoming partsFrom Milwaukeeon a JIT arrivalscheduleEngines andtransmissionsFrame tubebendingFrame-buildingwork cellsFramemachiningHot-paintframe paintingCrating
  12. 12. 7 - 12© 2011 Pearson Education, Inc. publishing as Prentice HallProcess StrategiesThe objective of a process strategy isto build a production process thatmeets customer requirements andproduct specifications within costand other managerial constraints
  13. 13. 7 - 13© 2011 Pearson Education, Inc. publishing as Prentice HallProcess, Volume, and VarietyProcess Focusprojects, job shops(machine, print,hospitals, restaurants)Arnold PalmerHospitalRepetitive(autos, motorcycles,home appliances)Harley-DavidsonProduct Focus(commercialbaked goods,steel, glass, beer)Frito-LayHigh Varietyone or fewunits per run,(allowscustomization)Changes inModulesmodest runs,standardizedmodulesChanges inAttributes(such as grade,quality, size,thickness, etc.)long runs onlyMass Customization(difficult to achieve,but huge rewards)Dell ComputerPoor Strategy(Both fixed andvariable costsare high)LowVolumeRepetitiveProcessHighVolumeVolumeFigure 7.1
  14. 14. 7 - 14© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Strategies How to produce a product orprovide a service that Meets or exceeds customerrequirements Meets cost and managerial goals Has long term effects on Efficiency and production flexibility Costs and quality
  15. 15. 7 - 15© 2011 Pearson Education, Inc. publishing as Prentice HallProcess StrategiesFour basic strategies1. Process focus2. Repetitive focus3. Product focus4. Mass customizationWithin these basic strategies there aremany ways they may be implemented
  16. 16. 7 - 16© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Focus Facilities are organized around specificactivities or processes General purpose equipment and skilledpersonnel High degree of product flexibility Typically high costs and low equipmentutilization Product flows may vary considerablymaking planning and scheduling achallenge
  17. 17. 7 - 17© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Focus Many inputs(surgeries, sick patients,baby deliveries, emergencies)Many different outputs(uniquely treated patients)Many departments andmany routingsFigure 7.2(a)(low volume, high variety,intermittent processes)Arnold Palmer Hospital
  18. 18. 7 - 18© 2011 Pearson Education, Inc. publishing as Prentice HallRepetitive Focus Facilities often organized asassembly lines Characterized by modules with partsand assemblies made previously Modules may be combined for manyoutput options Less flexibility than process-focusedfacilities but more efficient
  19. 19. 7 - 19© 2011 Pearson Education, Inc. publishing as Prentice HallRepetitiveFocusRaw materials andmodule inputsModules combined for manyOutput options(many combinations of motorcycles)Fewmodules(multiple engine models,wheel modules)Figure 7.2(b)(modular)Harley Davidson
  20. 20. 7 - 20© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Focus Facilities are organized by product High volume but low variety ofproducts Long, continuous production runsenable efficient processes Typically high fixed cost but lowvariable cost Generally less skilled labor
  21. 21. 7 - 21© 2011 Pearson Education, Inc. publishing as Prentice HallProduct Focus Few Inputs(corn, potatoes, water,seasoning)Output variations in size,shape, and packaging(3-oz, 5-oz, 24-oz packagelabeled for each material)Figure 7.2(c)(low-volume, high variety,continuous process)Frito-Lay
  22. 22. 7 - 22© 2011 Pearson Education, Inc. publishing as Prentice HallProduct FocusNucor Steel PlantContinuouscasterContinuous cast steelsheared into 24-ton slabsHot tunnel furnace - 300 ftHot mill for finishing, cooling, and coilingDE FGHIScrapsteelLadle of molten steelElectricfurnaceABC
  23. 23. 7 - 23© 2011 Pearson Education, Inc. publishing as Prentice HallMass Customization The rapid, low-cost production ofgoods and service to satisfyincreasingly unique customerdesires Combines theflexibility of aprocess focuswith the efficiencyof a product focus
  24. 24. 7 - 24© 2011 Pearson Education, Inc. publishing as Prentice HallMass CustomizationTable 7.1Vehicle models 140 286Vehicle types 18 1,212Bicycle types 8 211,000Software titles 0 400,000Web sites 0 162,000,000Movie releases per year 267 765New book titles 40,530 300,000Houston TV channels 5 185Breakfast cereals 160 340Items (SKUs) in 14,000 150,000supermarketsLCD TVs 0 102Number of ChoicesItem 1970s 21st Century
  25. 25. 7 - 25© 2011 Pearson Education, Inc. publishing as Prentice HallMassCustomizationMany parts andcomponent inputsMany output versions(custom PCs and notebooks)Many modules(chips, hard drives,software, cases)Figure 7.2(d)(high-volume, high-variety)Dell Computer
  26. 26. 7 - 26© 2011 Pearson Education, Inc. publishing as Prentice HallMass CustomizationMass CustomizationEffectiveschedulingtechniquesRapidthroughputtechniquesRepetitive FocusFlexible peopleand equipmentProcess-FocusedHigh variety, low volumeLow utilization (5% to 25%)General-purpose equipmentProduct-FocusedLow variety, high volumeHigh utilization (70% to 90%)Specialized equipmentFigure 7.3ModulartechniquesAccommodatingProduct andProcess DesignResponsiveSupply Chains
  27. 27. 7 - 27© 2011 Pearson Education, Inc. publishing as Prentice HallMass Customization Imaginative and fast productdesign Rapid process design Tightly controlled inventorymanagement Tight schedules Responsive supply chain partners
  28. 28. 7 - 28© 2011 Pearson Education, Inc. publishing as Prentice HallComparison of ProcessesProcess Focus(low-volume,high-variety)RepetitiveFocus(modular)Product Focus(high-volume,low-variety)MassCustomization(high-volume,high-variety)1. Smallquantity andlarge varietyof productsare produced1. Long runs,usually astandardizedproduct withoptions,producedfrommodules1. Largequantity andsmall varietyof productsareproduced1. Large quantityand largevariety ofproducts areproduced2. Equipmentused isgeneralpurpose2. Specialequipmentaids in use ofan assemblyline2. Equipmentused isspecialpurpose2. Rapidchangeover onflexibleequipmentTable 7.2
  29. 29. 7 - 29© 2011 Pearson Education, Inc. publishing as Prentice HallComparison of ProcessesProcess Focus(low-volume,high-variety)RepetitiveFocus(modular)Product Focus(high-volume,low-variety)MassCustomization(high-volume,high-variety)3. Operatorsare broadlyskilled3. Employeesare modestlytrained3. Operatorsare lessbroadlyskilled3. Flexibleoperators aretrained for thenecessarycustomization4. There aremany jobinstructionsbecauseeach jobchanges4. Repetitiveoperationsreducetraining andchanges injobinstructions4. Work ordersand jobinstructionsare fewbecause theyarestandardized4. Customorders requiremany jobinstructionsTable 7.2
  30. 30. 7 - 30© 2011 Pearson Education, Inc. publishing as Prentice HallComparison of ProcessesProcess Focus(low-volume,high-variety)RepetitiveFocus(modular)Product Focus(high-volume,low-variety)MassCustomization(high-volume,high-variety)5. Raw-materialinventorieshigh relativeto the valueof theproduct5. JITprocurementtechniquesare used5. Raw materialinventoriesare lowrelative to thevalue of theproduct5. Rawmaterialinventoriesare lowrelative tothe valueof theproduct6. Work-in-process ishighcompared tooutput6. JIT inventorytechniquesare used6. Work-in-processinventory islowcompared tooutput6. Work-in-processinventorydriven downby JIT,kanban, leanproductionTable 7.2
  31. 31. 7 - 31© 2011 Pearson Education, Inc. publishing as Prentice HallComparison of ProcessesProcess Focus(low-volume,high-variety)RepetitiveFocus(modular)Product Focus(high-volume,low-variety)MassCustomization(high-volume,high-variety)7. Units moveslowlythrough thefacility7. Assembly ismeasured inhours anddays7. Swiftmovement ofunits throughthe facility istypical7. Goods moveswiftlythrough thefacility8. Finishedgoods areusually madeto order andnot stored8. Finishedgoods madeto frequentforecast8. Finishedgoods areusually madeto forecastand stored8. Finishedgoods areoften build-to-order(BTO)Table 7.2
  32. 32. 7 - 32© 2011 Pearson Education, Inc. publishing as Prentice HallComparison of ProcessesProcess Focus(low-volume,high-variety)RepetitiveFocus(modular)Product Focus(high-volume,low-variety)MassCustomization(high-volume,high-variety)9. Schedulingis complex,concernedwith trade-offs betweeninventory,capacity, andcustomerservice9. Schedulingis based onbuildingvariousmodels froma variety ofmodules toforecasts9. Schedulingis relativelysimple,concernedwithestablishingoutput ratesufficient tomeetforecasts9. Sophisticatedscheduling isrequired toaccommodatecustom orders10. Fixed coststend to below andvariablecosts high10. Fixed costsdependenton flexibilityof thefacility10. Fixed coststend to behigh andvariablecosts low10. Fixed coststend to behigh, variablecosts must belowTable 7.2
  33. 33. 7 - 33© 2011 Pearson Education, Inc. publishing as Prentice HallCrossover ChartsFixed costsVariablecosts$High volume, low varietyProcess CFixed costsVariablecosts$RepetitiveProcess BFixed costsVariablecosts$Low volume, high varietyProcess AFixed costProcess AFixed costProcess BFixed costProcess CV1(2,857) V2(6,666)400,000300,000200,000Volume$Figure 7.4
  34. 34. 7 - 34© 2011 Pearson Education, Inc. publishing as Prentice HallFocused Processes Focus brings efficiency Focus on depth of product linerather than breadth Focus can be Customers Products Service Technology
  35. 35. 7 - 35© 2011 Pearson Education, Inc. publishing as Prentice HallChanging Processes Difficult and expensive May mean starting over Process strategy determinestransformation strategy for anextended period Important to get it right
  36. 36. 7 - 36© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Analysis andDesign Is the process designed to achieve acompetitive advantage? Does the process eliminate steps thatdo not add value? Does the process maximize customervalue? Will the process win orders?
  37. 37. 7 - 37© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Analysis andDesign Flow Charts - Shows the movement ofmaterials Time-Function Mapping - Shows flows andtime frame
  38. 38. 7 - 38© 2011 Pearson Education, Inc. publishing as Prentice Hall“Baseline” Time-Function MapCustomerSalesProductioncontrolPlant AWarehousePlant BTransport12 days 13 days 1 day 4 days 1 day 10 days 1 day 0 day 1 day52 daysFigure 7.5MoveReceiveproductProductProductExtrudeWaitWIPProductMoveWaitWIPWIPPrintWaitOrderWIPOrderproductProcessorderWaitOrder
  39. 39. 7 - 39© 2011 Pearson Education, Inc. publishing as Prentice Hall“Target” Time-Function MapCustomerSalesProductioncontrolPlantWarehouseTransport1 day 2 days 1 day 1 day 1 day6 daysFigure 7.5MoveReceiveproductProductProductExtrudeWaitPrintOrderWIPProductOrderproductProcessorderWaitOrder
  40. 40. 7 - 40© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Analysis andDesign Flow Charts - Shows the movement ofmaterials Time-Function Mapping - Shows flows andtime frame Value-Stream Mapping - Shows flows andtime and value added beyond theimmediate organization Process Charts - Uses symbols to showkey activities Service Blueprinting - focuses oncustomer/provider interaction
  41. 41. 7 - 41© 2011 Pearson Education, Inc. publishing as Prentice HallValue-Stream MappingFigure 7.6
  42. 42. 7 - 42© 2011 Pearson Education, Inc. publishing as Prentice HallProcess ChartFigure 7.7
  43. 43. 7 - 43© 2011 Pearson Education, Inc. publishing as Prentice HallService Blueprinting Focuses on the customer andprovider interaction Defines three levels of interaction Each level has differentmanagement issues Identifies potential failure points
  44. 44. 7 - 44© 2011 Pearson Education, Inc. publishing as Prentice HallService BlueprintPersonal Greeting Service Diagnosis Perform Service Friendly CloseLevel#3Level#1Level#2Figure 7.8NoNotifycustomerand recommendan alternativeprovider.(7min)Customer arrivesfor service.(3 min)Warm greetingand obtainservice request.(10 sec)FDirect customerto waiting room.FNotifycustomer thecar is ready.(3 min)Customer departsCustomer pays bill.(4 min)FFPerformrequired work.(varies)Prepare invoice.(3 min)FFYesFYesFStandardrequest.(3 min)Determinespecifics.(5 min)NoCanservice bedone and doescustomerapprove?(5 min)
  45. 45. 7 - 45© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Analysis Tools Flowcharts provide a view of thebig picture Time-function mapping adds rigorand a time element Value-stream analysis extends tocustomers and suppliers Process charts show detail Service blueprint focuses oncustomer interaction
  46. 46. 7 - 46© 2011 Pearson Education, Inc. publishing as Prentice HallSpecial Considerations forService Process Design Some interaction with customer isnecessary, but this often affectsperformance adversely The better these interactions areaccommodated in the process design,the more efficient and effective theprocess Find the right combination of cost andcustomer interaction
  47. 47. 7 - 47© 2011 Pearson Education, Inc. publishing as Prentice HallService Factory Service ShopDegree of CustomizationLow HighDegreeofLaborLowHighMass Service Professional ServiceService Process MatrixCommercialbankingPrivatebankingGeneral-purpose law firmsLaw clinicsSpecializedhospitalsHospitalsFull-servicestockbrokerLimited-servicestockbrokerRetailingBoutiquesWarehouse andcatalog storesFast-foodrestaurantsFine-diningrestaurantsAirlinesNo-frillsairlinesFigure 7.9DigitalorthodonticsTraditionalorthodontics
  48. 48. 7 - 48© 2011 Pearson Education, Inc. publishing as Prentice HallService Process Matrix Labor involvement is high Selection and training highlyimportant Focus on human resources Personalized servicesMass Service and Professional Service
  49. 49. 7 - 49© 2011 Pearson Education, Inc. publishing as Prentice HallService Process MatrixService Factory and Service Shop Automation of standardizedservices Low labor intensity responds wellto process technology andscheduling Tight control required to maintainstandards
  50. 50. 7 - 50© 2011 Pearson Education, Inc. publishing as Prentice HallImproving ServiceProductivityStrategy Technique ExampleSeparation Structure service socustomers must gowhere the service isofferedBank customers go toa manager to open anew account, to loanofficers for loans, andto tellers for depositsSelf-service Self-service socustomers examine,compare, andevaluate at their ownpaceSupermarkets anddepartment storesInternet orderingTable 7.3
  51. 51. 7 - 51© 2011 Pearson Education, Inc. publishing as Prentice HallStrategy Technique ExamplePostponement Customizing atdeliveryCustomizing vans atdelivery rather than atproductionFocus Restricting theofferingsLimited-menurestaurantModules Modular selection ofserviceModular productionInvestment andinsurance selectionPrepackaged foodmodules inrestaurantsImproving ServiceProductivityTable 7.3
  52. 52. 7 - 52© 2011 Pearson Education, Inc. publishing as Prentice HallStrategy Technique ExampleAutomation Separating servicesthat may lendthemselves to sometype of automationAutomatic tellermachinesScheduling Precise personnelschedulingScheduling ticketcounter personnel at15-minute intervals atairlinesTraining Clarifying the serviceoptionsExplaining how toavoid problemsInvestment counselor,funeral directorsAfter-sale maintenancepersonnelImproving ServiceProductivityTable 7.3
  53. 53. 7 - 53© 2011 Pearson Education, Inc. publishing as Prentice HallImproving ServiceProcesses Layout Product exposure, customereducation, product enhancement Human Resources Recruiting and training Impact of flexibility
  54. 54. 7 - 54© 2011 Pearson Education, Inc. publishing as Prentice HallEquipment and Technology Often complex decisions Possible competitive advantage Flexibility Stable processes May allow enlarging the scope ofthe processes
  55. 55. 7 - 55© 2011 Pearson Education, Inc. publishing as Prentice HallProduction Technology Machine technology Automatic identificationsystems (AISs) Process control Vision system Robot Automated storage and retrieval systems(ASRSs) Automated guided vehicles (AGVs) Flexible manufacturing systems (FMSs) Computer-integrated manufacturing (CIM)
  56. 56. 7 - 56© 2011 Pearson Education, Inc. publishing as Prentice HallMachine Technology Increased precision Increased productivity Increased flexibility Improved environmental impact Reduced changeover time Decreased size Reduced power requirements
  57. 57. 7 - 57© 2011 Pearson Education, Inc. publishing as Prentice HallAutomatic IdentificationSystems (AISs) Improved data acquisition Reduced data entry errors Increased speed Increased scopeof processautomationExample – Bar codes and RFID
  58. 58. 7 - 58© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Control Real-time monitoring and control ofprocesses Sensors collect data Devices read dataon periodic basis Measurements translated into digitalsignals then sent to a computer Computer programs analyze the data Resulting output may take numerousforms
  59. 59. 7 - 59© 2011 Pearson Education, Inc. publishing as Prentice HallVision Systems Particular aid to inspection Consistentlyaccurate Never bored Modest cost Superior toindividuals performing the sametasks
  60. 60. 7 - 60© 2011 Pearson Education, Inc. publishing as Prentice HallRobots Perform monotonous or dangeroustasks Perform tasksrequiring significantstrength orendurance Generally enhancedconsistency andaccuracy
  61. 61. 7 - 61© 2011 Pearson Education, Inc. publishing as Prentice HallAutomated Storage andRetrieval Systems (ASRSs) Automated placement andwithdrawal of parts and products Reduced errors and labor Particularly useful in inventory andtest areas of manufacturing firms
  62. 62. 7 - 62© 2011 Pearson Education, Inc. publishing as Prentice HallAutomated Guided Vehicle(AGVs) Electronically guided andcontrolled carts Used for movement of productsand/or individuals
  63. 63. 7 - 63© 2011 Pearson Education, Inc. publishing as Prentice HallFlexible ManufacturingSystems (FMSs) Computer controls both the workstationand the material handling equipment Enhance flexibility and reduced waste Can economically produce low volume athigh quality Reduced changeover time and increasedutilization Stringent communication requirementbetween components
  64. 64. 7 - 64© 2011 Pearson Education, Inc. publishing as Prentice HallComputer-IntegratedManufacturing (CIM) Extension of flexible manufacturingsystems Backwards to engineering and inventorycontrol Forward into warehousing and shipping Can also include financial and customerservice areas Reducing the distinction between low-volume/high-variety, and high-volume/low-variety production
  65. 65. 7 - 65© 2011 Pearson Education, Inc. publishing as Prentice HallComputer-IntegratedManufacturing(CIM)Figure 7.10
  66. 66. 7 - 66© 2011 Pearson Education, Inc. publishing as Prentice HallTechnology in ServicesService Industry ExampleFinancialServicesDebit cards, electronic funds transfer, ATMs,Internet stock trading, on-line banking viacell phoneEducation Electronic bulletin boards, on-line journals,WebCT, Blackboard and smart phonesUtilities andgovernmentAutomated one-man garbage trucks, opticalmail and bomb scanners, flood warningsystems, meters allowing homeowners tocontrol energy usage and costsRestaurants andfoodsWireless orders from waiters to kitchen,robot butchering, transponders on cars thattrack sales at drive-throughsCommunications Interactive TV, ebooks via Kindle 2Table 7.4
  67. 67. 7 - 67© 2011 Pearson Education, Inc. publishing as Prentice HallTechnology in ServicesService Industry ExampleHotels Electronic check-in/check-out, electronickey/lock system, mobile web bookingWholesale/retailtradeATM-like kiosks, point-of-sale (POS)terminals, e-commerce, electroniccommunication between store and supplier,bar coded data, RFIDTransportation Automatic toll booths, satellite-directednavigation systems, WiFi in automobileHealth care Online patient-monitoring, online medicalinformation systems, robotic surgeryAirlines Ticketless travel, scheduling, Internetpurchases, boarding passes two-dimensional bar codes on smart phonesTable 7.4
  68. 68. 7 - 68© 2011 Pearson Education, Inc. publishing as Prentice HallProcess Redesign The fundamental rethinking of businessprocesses to bring about dramaticimprovements in performance Relies on reevaluating the purpose of theprocess and questioning both thepurpose and the underlying assumptions Requires reexamination of the basicprocess and its objectives Focuses on activities that crossfunctional lines Any process is a candidate for redesign
  69. 69. 7 - 69© 2011 Pearson Education, Inc. publishing as Prentice HallSustainability Sustainability in productionprocesses1. Resources2. Recycling3. Regulations4. Reputation
  70. 70. 7 - 70© 2011 Pearson Education, Inc. publishing as Prentice HallSustainability Resources Operations is primary user Reducing use is win-win Recycling Burn, bury, or reuse waste Recycling begins at design
  71. 71. 7 - 71© 2011 Pearson Education, Inc. publishing as Prentice HallSustainability Regulations Laws affect transportation,waste, and noise Increasing regulatory pressure Reputation Leadership may be rewarded Bad reputation can havenegative consequences
  72. 72. 7 - 72© 2011 Pearson Education, Inc. publishing as Prentice HallAll rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted, in any form or by any means, electronic, mechanical, photocopying,recording, or otherwise, without the prior written permission of the publisher.Printed in the United States of America.

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