STERN SCHOOL OF BUSINESS
NEW YORK UNIVERSITY
COURSE SYLLABUS B60.3355
SAMPLE SYLLABUS FOR SPRING 2005
MEETINGS: Tuesday 6:00 - 9:00PM Room KMC 5-85
INSTRUCTOR: Dr. Harry Chernoff, Room KMC 8-68,
OFFICE HOURS: Monday 4:30 - 6:00PM,
Tuesday 4:00 – 5:30PM,
or by appointment
REQUIRED COURSE MATERIALS:
CASES & READINGS: Packet available in bookstore. (In bookstore, you will
buy two Harvard cases: Donner Company and Sea Pines
Other materials will be distributed in class or online.
COURSE DESCRIPTION AND OBJECTIVES
There is an increasing awareness that operations should contribute to the global
competitive stance of a business and not merely be a place to make the firm’s products or
services. This can be done by contributing distinctive competence or capability to the
business, and continually improving the products and process of the business.
In the core course in Operations Management, we studied the basic aspects of how firms
produce their products and services to gain a competitive advantage. The course took a
tactical or short-term look at operations. This course, Operations Strategy, is a natural
follow-up to the core course. Here we will examine the strategic and long-term policies
of the firm, and learn how the operations strategies and policies are developed to be
consistent with the corporate and overall business strategies.
To do this effectively, we will examine through case studies, how firms’ operations play
an important role in building and shaping their competitive posture.
Operations Strategy will help the students
• recognize the strategic and policy implications that can be gained from managing
• develop a framework for allocating resources and managing the operations
function in ways that distinguish firms from their competitors
• analyze, develop and formulate operations strategies to exploit competitive
• visualize how operations strategies can and must be linked to overall business
strategies and the financial and marketing strategies as well
• highlight effective examples involving continuous improvement and
implementation of operations strategies
Approximately 10 cases and exercises will be studied during the semester. All of these
are for class discussion purposes and will involve some analysis. Some of the cases will
require a written presentation. You will be working on the case analyses in Groups of
three (or, if necessary, four) students. Your Group will be preparing and submitting, in
written form, five (5) of these cases for grading. These cases will be submitted at the
beginning of the class on the night due. Keep a copy for yourself.
The five cases your group will submit are:
1) Donner Company (2/24)
2) Red Brand Canners (3/9)
3) Sea Pines Racquet Club (4/1)
4) Lawn King (4/8)
5) your choice of any other case assigned during the semester.
The format for the case analyses should be the following:
1) Situation: identify relevant symptoms, i.e. external and/or internal factors and
issues, that lead to a clear statement of the problem(s).
2) Conceptual Analysis: note relevant strategy and theory, clarify necessary
assumptions, and identify the impact of these concepts on the problem.
3) Alternatives: analyze at least two available solution alternatives
4) Sensitivity Analysis and Solution: perform a sensitivity analysis and use the
results as support and rationale for your recommended solution.
5) Implementation and Future Actions: suggest specific cautions or propose
guidance to assure that the solution is successfully implemented, and identify
any necessary future actions.
The analyses should be 3-4 pages in length, plus any optional appendices, etc.
There will be no required text for the course. Instead, I will provide some readings and
chapters containing relevant material.
Each Group will be required to prepare a Term Project. The type of project can be
selected from the following:
a) A Case prepared involving a strategic operations issue(s). The company and
setting will be chosen by the Group and approved by the professor. The case
will be prepared in the same format as the cases studied in the course
(approximately 9-11 pages in length) and will be accompanied by a complete
Analysis Note, or solution, to the case (approximately 3-4 pages in length).
The analysis or solution should be the same format as the case analyses you
have submitted throughout the semester.
b) A Research Paper on a strategic operations decision. The topic will be
chosen by the group and approved by the professor. This paper will be
approximately 12-15 pages and will adhere to the following structure:
1) the background of the decision, 2) the company(ies) and key
participants involved, 3) an analysis of the decision alternatives, 4) the
resulting decision, and 5) an evaluation of the effectiveness of both the
decision and the decision process.
The Groups will present the paper or case to the professor in writing, and make a
30 minute oral presentation to the class on one of the class nights during the latter
part of the course. The case or paper should be prepared at least one week prior to
the presentation, allowing the material to be distributed to the class for reading,
analysis, and preparation of questions.
The schedule for the presentations will be determined by the professor with input
from the students. Your group can request a specific night or be assigned a date.
This will be discussed in class.
10% for class participation
40% for the five case analyses (8% each)
50% for the Term Project
20% for the ORAL PRESENTATION
30% for the WRITTEN paper
HARVARD CASES (Buy in bookstore)
SEA PINES RACQUET CLUB
OTHER CASES and READINGS (To be distributed in class or posted in
WESTERN OFFICE EQUIPMENT MANUFACTURING CO.
RED BRAND CANNERS
THE THREE LEVELS OF QUALITY
RITZ-CARLTON HOTEL COMPANY
LAWN KING, INC.
OPERATIONS STRATEGY B60.3355
PROFESSOR HARRY CHERNOFF
PLEASE NOTE: At this time some details of the syllabus are still in progress. The
reading assignments that are blank will be inserted prior to the start of the course.
SESSION 1 (2/10): INTRODUCTION- WHY OPERATIONS MANAGEMENT IS
THE KEY COMPETITIVE WEAPON
1. A case analysis method will be discussed
2. Read, analyze and be prepared to discuss the Orchid Company case. It is linked
online in Blackboard.
SESSION 2 (2/17): THE ROLE OF OPERATIONS
1. Read, analyze, and be prepared to discuss the Western Office Equipment Company
case. The following study questions will help:
a) Hypothesize the corporate, business and operations strategies of Western Office.
b) Outline an analysis of Western Office including a description of the situation,
conceptual analysis, sensitivity analysis and alternative solutions, and
implementation of future recommended actions.
c) What are the major marginal analysis assumptions in Mr. Olsen's model?
d) Is using marginal analysis as a model, consistent with the corporate and business
e) How accurate is the data that Mr. Olsen used in his analysis? How important are
f) Do Olsen’s recommendations conform to the overall corporate strategy of
SESSION 3 (2/24): THE EFFECT OF CAPACITY ON STRATEGY FORMATION
1. Read, analyze and be prepared to discuss the Donner Company case. Use the
following study questions as a guide in analyzing the case:
a) Describe Donner as an operating process. To simplify this task, consider
only the flow of the most important output.
b) What is Donner’s corporate strategy?
c) How does their operations strategy support and sabotage the corporate
strategy? How would you propose to resolve this?
2. The first part of the assignment is to review your understanding of capacity and
how set-up time affects capacity. Review your basic understanding of capacity
calculations by calculating (by-hand) the capacity in circuit boards per month of the
following operations in the Donner case, using the assumption that 60 orders are
processed in the month. State all assumptions made and show all work. (These
calculations can be checked using the spreadsheets described below):
a) Inspect and Shear
b) Etch and Tin Strip
e) Determine a decision rule for when to use the CNC Router or the Punch
3. Use the EXCEL spreadsheets Donner.xls and Donner1.xls to analyze and
understand the relationships among the number of orders (set-ups) in a month,
order size and capacity. The spreadsheets can be found in Blackboard under
4. SUBMIT the analysis of the Donner Company case at the beginning of class.
Follow the format described above in this syllabus.
5. In the second half of the class, we will discuss the introduction of Linear
Programming as a model for optimization.
SESSION 4 (3/2): STRATEGIC OPTIMIZATION MODELS
1. Read hand-out: Optimization Models, Linear Programming and Heuristics
2. Familiarize yourself with Excel Solver
3. Familiarize yourself with LINDO
4. Solve the five practice problems (in Blackboard) by hand (c-z Table method in
text), using LINDO and with Excel Solver. (Practice all three techniques.)
5. Attempt to set-up the Otto Development exercise (Blackboard) in LP form, and try
6. Present and submit a brief proposal (description) of your intended Term Project,
identifying it as a research project or case preparation. Identify the strategic
operations decision(s) or issue(s) that the project will include. After the proposal is
approved, you will prepare a more detailed outline.
SESSION 5 (3/9): LINEAR PROGRAMMING APPLICATION
1. Read, analyze and be prepared to discuss the Red Brand Canners case. Use Excel
Solver or LINDO to perform the LP analysis. SUBMIT this analysis at the
beginning of the class. Use the five questions at the end of the case as a guideline
for your analysis. The answers to these questions can form the
alternatives/sensitivity analysis/solution portion of the case analysis.
2. In class we will discuss the strategic implications of the LP results.
3. SUBMIT a two page detailed outline of your group Term Project at the beginning
of the class.
TUESDAY, MARCH 16th NO CLASS SPRING BREAK
SESSION 6 (3/23): FACILITIES STRATEGY
1. Read, analyze and be prepared to discuss the Distrigas Company case.
2. Read Chapters
3. The following study questions may help:
a) What is the role Distrigas plays in the Natural Gas supply chain?
b) What are the prominent operational constraints for Distrigas?
c) Identify the alternative strategies.
d) How does the contract with the utility companies affect their decision?
SESSION 7 (3/30): FDA: STRATEGIC PLANNING FOR COUNTERTERRORISM
1. Read Title III, Subtitle A (Protection of Food Supply) and Subtitle B
(Protection of Drug Supply) of the Bioterrorism Act of 2002, which can be
found at <http://tis.eh.doe.gov/biosafety/library/PL107-188.pdf>
2. Complete the short quiz on "How Much Do You Know About FDA?"
distributed in class.
3. OUTSIDE GUEST SPEAKER Dr. Fred Gretch, who is responsible for FDA's
food toxicology programs throughout the Northeast Region, will present a
lecture on strategic planning, as practiced by the U.S. Food and Drug
Administration, and will conduct a question and answer discussion
session. The issues deal with the procedures and processes utilized in
counterterrorism since the events of September 11, 2001.
SESSION 8 (4/6): QUALITY - ITS BASIS FOR COMPETITION AS AN
1. Read, analyze and be prepared to discuss The Ritz-Carlton Hotel Company case.
Use the data supplied on the course website to assist in analyzing the case.
2. Read the article The Three Levels of Quality by Brache and Rummler.
3. Read (review if you have studied this material previously) Chapter 6 (Heizer, et al)
on Managing Quality, and Chapter 6 Supplement on Statistical Process Control.
These readings were distributed in class in the last session.
4. The data for Ritz (supplied on the website), contains actual and summary data on
defects for 330 days for one hotel. Try to make a p-chart for all defects over the
data period and identify the out-of-control days. Also, make a p-chart for the room
clean defects only.
5. Attempt to construct four Pareto Charts: a) all defects by key word; b) all defects
by day of week; c) room clean defects by day of week; and d) all defects by percent
SESSION 9 (4/13): OPERATIONS PLANNING FOR THE SERVICE INDUSTRY
1. Read, analyze, and be prepared to discuss the Sea Pines Racquet Club case.
2. SUBMIT this analysis at the beginning of the class.
3. The following study questions may help:
a) What variable(s) need to be forecasted at Sea Pines?
b) How would multiple forecasts be combined?
c) What is the demand for tennis at Sea Pines? Is this something they control?
d) What is their current capacity?
e) How would you expand it?
f) What is Sea Pine’s corporate strategy? Suggest a business strategy and
operations strategy as pertains to the tennis operation.
g) Is there a way to achieve the 25% return on investment for tennis operations?
h) Should tennis be required to reach these return levels? How does tennis fit into
the corporate strategy?
SESSION 10 (4/20): STRATEGIC INVENTORY MANAGEMENT: A
1. Read Chapter 12 in S&L: Operations Strategy and Sustainability
2. Read, analyze and be prepared to discuss the Lawn King case. SUBMIT this
analysis at the beginning of the class.
4. Use the following questions as a guideline for the case:
a) What is their corporate strategy and business strategy?
b) What is the capacity of the current operations?
c) Will the firm be able to meet expected demand?
d) How does inventory affect this?
e) What alternatives are available to increase capacity?
d) Determine whether or not Lawn King has sufficient current capacity to meet
demand for the upcoming year. Suggest a strategy to accomplish this.
SESSION 11 (4/27):
1. Read the Madison Hotel Partners case.
2. Start of GROUP PRESENTATIONS
SESSION 12 (5/4): GROUP PRESENTATIONS
Schedule to be discussed in class