Student Manual
Updated June 3, 2015
McGraw-Hill Practice Operations
1
Table of Contents
Introduction ................................................................................................................................................................................ 3
Game Description ........................................................................................................................................................................................ 3
How to Win .................................................................................................................................................................................................... 3
Gameplay ....................................................................................................................................................................................................... 3
Learning Outcomes .................................................................................................................................................................................... 4
Overview of Modules .................................................................................................................................................................................. 4
Module 1: The Production Process ............................................................................................................................................... 4
Module 2: Managing Suppliers ....................................................................................................................................................... 4
Module 3: Forecasting and Contracts .......................................................................................................................................... 4
Module 4: Human Resources and Capacity Planning ........................................................................................................... 4
Module 5: The New Branch .............................................................................................................................................................. 4
Module 6: Maximize Net Worth ..................................................................................................................................................... 5
System Requirements ................................................................................................................................................................................ 5
Registering and Logging In .................................................................................................................................................... 6
Module 1: The Production Process ..................................................................................................................................... 7
Make-to-Order Processes .............
When Quality Assurance Meets Innovation in Higher Education - Report launch w...
Student Manual Updated June 3, 2015 .docx
1. Student Manual
Updated June 3, 2015
McGraw-Hill Practice Operations
1
Table of Contents
Introduction
...............................................................................................
................................................................................. 3
Game Description
...............................................................................................
......................................................................................... 3
2. How to Win
...............................................................................................
...............................................................................................
...... 3
Gameplay
...............................................................................................
...............................................................................................
......... 3
Learning Outcomes
...............................................................................................
..................................................................................... 4
Overview of Modules
...............................................................................................
................................................................................... 4
Module 1: The Production Process
...............................................................................................
................................................ 4
Module 2: Managing Suppliers
...............................................................................................
........................................................ 4
Module 3: Forecasting and Contracts
...............................................................................................
........................................... 4
Module 4: Human Resources and Capacity Planning
...............................................................................................
............ 4
Module 5: The New Branch
............................................................................................ ...
............................................................... 4
Module 6: Maximize Net Worth
...............................................................................................
...................................................... 5
3. System Requirements
...............................................................................................
................................................................................. 5
Registering and Logging In
...............................................................................................
..................................................... 6
Module 1: The Production Process
...............................................................................................
...................................... 7
Make-to-Order Processes
...............................................................................................
.......................................................................... 8
Operations Management: Priority and Utilization
...............................................................................................
......................... 9
Follow the Tutorial for Module 1
...............................................................................................
......................................................... 11
Module 2: Managing Suppliers
...............................................................................................
........................................... 12
The “Lean or “Just-In-Time” Strategy
...............................................................................................
................................................ 13
Quality Inspection
...............................................................................................
...................................................................................... 15
4. Quantity Flexibility and Supplier Capacity
...............................................................................................
...................................... 16
Creating a Vendor Scorecard
...............................................................................................
................................................................ 17
Follow the Tutorial for Module 2
...............................................................................................
......................................................... 19
Module 3: Forecasting and Contracts
...............................................................................................
............................... 20
Research
...............................................................................................
...............................................................................................
......... 20
Make-to-Order vs. Make-to-Stock
...............................................................................................
........................................................ 20
Bids
...............................................................................................
...............................................................................................
................... 20
Work Request
Analysis..................................................................................
.......................................................................................... 21
Batch Manufacturing
5. ...............................................................................................
............................................................................... 23
Forecasting and Specialization
...............................................................................................
............................................................ 24
Follow the Tutorial for Module 3
...............................................................................................
......................................................... 24
Module 4: Human Resources and Capacity Planning
...............................................................................................
. 25
Human Resources
...............................................................................................
...................................................................................... 25
McGraw-Hill Practice Operations
2
Training..................................................................................
...............................................................................................
.................. 26
Hiring
...............................................................................................
......................................................................................... ......
......... 26
Managing the Organization Chart
...............................................................................................
................................................ 27
6. Capacity Planning
...............................................................................................
...................................................................................... 27
Scheduling a Job Shop with a Spreadsheet
...............................................................................................
...................................... 29
Gather Basic Information
...............................................................................................
................................................................. 29
Prepare a Schedule
...............................................................................................
............................................................................. 29
Compare Schedules using Different Priorities
...............................................................................................
....................... 30
Matching Capacity to Demand
...............................................................................................
............................................................. 31
Maximizing Throughput
...............................................................................................
................................................................... 31
Constraints and Bottlenecks
...............................................................................................
.................................................................. 32
Routing
Pathways.................................................................................
..............................................................................................
33
Finding Bottlenecks
...............................................................................................
............................................................................ 33
7. End of the Tutorial
...............................................................................................
.................................................................................... 36
Module 5: The New Branch
...............................................................................................
.................................................. 37
Hiring vs. Training
...............................................................................................
..................................................................................... 37
Analyzing Employee Expenses
...............................................................................................
...................................................... 38
Reputation
...............................................................................................
........................................................................................... ....
..... 42
Module 6: Maximizing Profits
...............................................................................................
............................................. 43
Long-Term Perspective
...............................................................................................
............................................................................ 43
Total Cost of Ownership
...............................................................................................
................................................................... 44
8. McGraw-Hill Practice Operations
3
Introduction
Game Description
Practice Operations puts players in the role of an operations
decision maker for a clothing
manufacturing company. Operations is the engine that drives a
business. Play begins with an overview
of the heart of that engine – managing the production process.
Players review the contract
specifications as well as the production process by walking
through the Production Floor and Shipping
area. Players then analyze the receiving department functions of
managing the supply chain and
material inventories to ensure client needs can be met. In order
to grow the business, players choose
which new contracts to pursue and then optimize their
receiving, production, and shipping departments
accordingly. As the business grows, players manage both the
human and facility resources in order to
meet capacity challenges. Customer satisfaction is a key metric
for success. In the final stages of the
game, the company puts players in complete control over all
areas of operations at the New Branch,
with the challenge to build the most profitable company
possible.
How to Win
Your goal is to make the most money possible. This will
9. happen if you run your operation efficiently.
Getting orders out to customers on time, with the correct
quantity and quality will make your customers
happy, which in turn raises your reputation. As your reputation
increases, you will be able to
successfully bid on contracts from a larger pool of customers,
which will generate more revenue. If you
run your operation poorly and your customers receive orders
late or with errors in quality or amount,
your sales force will lose bids to your competitors and you will
make less money, or even run a deficit!
Gameplay
The game is turn-based. Each turn is one week. Each module is
a specific length and has objectives that
must be achieved before time runs out.
McGraw-Hill Practice Operations
4
Learning Outcomes
through trial and error and learning
how the elements of operations and production come together.
-of-class play and competition between
you and your fellow students.
-world data and situations that reflect real
world operational situations.
10. by demonstrating that the various
functional areas of the company – Human Resources,
Manufacturing, Accounting, and Sales –
must work together in order to meet company goals.
-on practice as an operations
manager in a manufacturing scenario
production
process.
the key success metrics.
and students to review and assess
your performance and decision-making.
Overview of Modules
Module 1: The Production Process
Operations is the engine that drives a business. This module
focuses on the heart of that engine,
managing the production process. Module 1 should take 25-45
minutes to complete.
Module 2: Managing Suppliers
This module unlocks the receiving department, putting players
in charge of managing the supply
chain and material inventories to meet client needs. Module 2
should take 25-45 minutes to
complete.
11. Module 3: Forecasting and Contracts
In this module, players choose which contracts to pursue, and
optimize their receiving,
production, and shipping departments accordingly. Module 3
should take 25-45 minutes to
complete.
Module 4: Human Resources and Capacity Planning
In this challenging scenario, players will manage both human
and facility resources to meet
capacity challenges. Module 4 should take 35-55 minutes to
complete.
Module 5: The New Branch
In this module, players will have complete control over all areas
of their operations, and will be
challenged to reach a net worth of $50,000 as quickly as
possible. Module 5 should take 1 to 2
hours to complete.
McGraw-Hill Practice Operations
5
Module 6: Maximize Net Worth
In this capstone module, players again have complete control
over all areas of their operations.
The goal is to maximize the net worth of the firm over 50 turns.
12. Module 6 should take 2 to 3
hours to complete.
System Requirements
Computers used to run Practice Operations must meet the
Technical Requirements listed below.
Windows OS:
1. Operating systems: Windows XP with Service Pack 3 /
Windows Vista SP2 / Windows 7 /
Windows 8.
2. Internet Browser: Firefox version 31 or above OR Internet
Explorer 11 or above OR
Google Chrome version 31 or above
3. Memory: 512MB RAM
4. Processor: Intel Pentium 3-4 processor or equivalent/better
5. Video: NVIDIA GeForce 6600 or better OR ATI Radeon
8500, 9250 or better OR Intel 945
chipset or better, 1024 x 768 resolution minimum
6. Internet: 128kbit/s Cable/DSL/LAN connection per computer
7. Hard Disk Space: 500MB free
8. Direct X: DirectX 9.0c
13. Mac OSX:
1. Operating system: Must have OS X 10.6 (Snow Leopard) or
later.
2. Processor: Intel Core 2 Duo (PowerPC not supported)
3. RAM: 1GB System Memory
4. Video Memory: 256MB graphics card or decent integrated
graphics chip. Must support
OpenGL 1.5+
5. Internet Browser: Firefox version 31 or above OR Safari 7.1
or above OR Google Chrome
version 31 or above
Apple iPad:
1. Model: iPad2 or later.
2. Operating System: iOS 8 or later.
3. Screen Resolution: 1024x768 or greater.
McGraw-Hill Practice Operations
6
Android Tablet:
14. 1. Operating System: Android 4 or later.
Registering and Logging In
Navigate to www.mhpractice.com. There are two ways to
register for Practice Operations and log in:
1) you can click on the Practice Operations link in Connect, or
2) you can click on the link that has been sent to you from your
instructor by email.
If you are registering for the first time, the following screen
will appear. Click ‘Register’ located in the
lower middle of the screen. If you have already registered,
simply click the Login button.
If you are registering for the first time, you will see the
following screen; enter the code from the card
included with your textbook, or the code that you purchased
separately.
Operations
Operations Sc 101
http://www.mhpractice.com/
McGraw-Hill Practice Operations
7
15. Module 1: The Production Process
In this module, you will learn to manage the basic production
process. This product flow appears in the
Production Floor panel (below), and you can also see the
progression of products through the various
machines. The managers in the game will help guide you
through the process.
In Practice Operations, the production floor uses a workcenter
(or job shop) layout, where machines are
grouped by type, with products traveling from one machine to
the next as they are completed. Products
start in Cutting and then move through Sewing, Press Transfer
(for some products), and finally arrive at
Packaging. Additional workcenters will be added in later
modules, and each station can be upgraded for
a one-time cost to increase the speed and maximum amount that
can be processed.
McGraw-Hill Practice Operations
8
Make-to-Order Processes
By following the screen prompts, a production order that
precisely matches the customer order is
16. started on the production floor. This 1:1 relationship between
customer orders and production orders is
a key characteristic of a make-to-order process.
For example, review the open contract from Stallion Apparel
(below), highlighting the importance of
individual orders in a make-to-order system. In particular, the
key elements are the client, item ordered,
order quantity, unit price, and due date.
McGraw-Hill Practice Operations
9
Once your production is underway, you can
view the details by looking at the Current
Production Runs panel. The side arrows let
you quickly cycle through all products
currently in production. The icons under
Production Tasks let you see which machines
are required for the specific product. You can
view the material required per unit and see
how much of that material you have in stock.
You can view the current status, the amount
being produced, what priority you have it set
for, and finally the quantity of finished
product you have in stock.
17. Operations Management: Priority and Utilization
One of your key decisions is the sequencing of jobs. By varying
the priority of jobs, the quantity of each
item produced during a given period can be varied widely. In
this example, the priority of three jobs
(shirts, shorts, and pants) is varied to show how this can impact
total output. Prioritization of jobs is
established in the Production Area.
Click the Manager’s Desk, then select each order from the
Production Schedule.
McGraw-Hill Practice Operations
10
To keep track of the state of multiple orders, go to the View
Production Plan panel.
The Production Plan panel shows which machines are in use and
how much of their total capacity is
being utilized. ! Prioritizing jobs can save players from several
utilization mishaps such as being on track
to complete orders for your customers on time only to have
several products all arrive at the packaging
station at the same time
18. NOTE:
You can also change
priority of production
with the mouse by
grabbing a product in
“Current Production
Runs” and dragging it
to a new slot.
McGraw-Hill Practice Operations
11
Can you get your average utilization to 100 percent?
Probably not, but the higher that score, the more efficient you
are managing your operations. See the
equation below:
����������� =
�������� ����
���� ��������� �����
=
1280
2400
19. = 53.3%
This priority order has increased the utilization average by
10%!
Follow the Tutorial for Module 1
It’s important to follow the in-game tutorial for this module to
be sure you are introduced to all the key
elements. They will be needed when you start playing Module
2. If you are unsure of any part of the
McGraw-Hill Practice Operations
12
module, replay it, and then review this section of the manual. If
you feel comfortable with the concepts
introduced in Module 1, try playing through it several times to
beat your own high score!
Module 2: Managing Suppliers
Time to get busy with supply chain management! This module
introduces the receiving department,
and shows how to efficiently order the materials you need to
produce your products. As you learned in
20. Module 1, proper scheduling is critical to keep your production
running smoothly. The same is true with
managing your supply chain. You must make sure you receive
the proper amount and quality of
materials in a time frame that allows you to sort them, send
them to production to create completed
products, and ship them in enough time to arrive at their
destination within the specified number of
weeks. This will make your clients happy and increase your
reputation.
Of course, it is also important to manage the costs associated
with suppliers. In Practice Operations,
there are two main costs associated with raw materials –
purchasing costs and holding costs. Purchasing
costs can be managed by selecting a vendor with the right
quality (to avoid overpaying for excessive
quality), by taking advantage of lead-time and quantity
discounts, and by comparing prices among
vendors. Holding costs are
charged for materials held in
stock (about 10% per turn for
raw materials, 5% per turn for
21. finished
products) and
can be
minimized
through careful
scheduling of
purchases and
production.
Excess materials
can be sold, but the cash
received for inventory (either
raw materials or finished
products) that are disposed of
in this manner is a small
portion of the original cost.
In the receiving department,
you click on the manager’s desk to order new materials, and you
will see trucks back up to the loading
22. McGraw-Hill Practice Operations
13
docks when materials arrive. Materials first go to the double
pallet at the bottom of the screen until
they can be sorted. Then each pallet displays specific raw
materials that are letter coded.
The “Lean” or “Just-In-Time” Strategy
One gameplay option you can experiment with in Module 2 is to
use a true lean/JIT approach, ordering
raw materials to arrive just as they are needed. For example, in
turn 3 (January, week 3) orders arrive for
slacks (250 units) and shorts (400 units). Both of these products
are due to arrive at the customer in 6
weeks (March, week 1). Less than one week is required for
production of these items (the limiting factor
is packaging capacity, but even this step can be completed in
less than a week for both products).
Therefore, with 2 weeks to ship and 1 week to produce, these
two production orders can be started as
late as February, week 2. Therefore, when ordering the raw
materials, ordering with a lead time of 3
weeks will minimize inventory holding and allow for just-in-
time delivery of raw materials.
JIT/Lean requires highly reliable suppliers: for khaki either
United Fabrics or Preston Premium would be
preferred suppliers. Both offer the required level of quality and
both can meet the required quantity.
23. Since the price is the same for both, place an order for 500 units
of khaki with Preston Premium.
For silk, Preston Premium, Reliable Clothing, and United
Fabrics are highly reliable suppliers. Once again,
all meet the necessary quality level. Reliable Clothing offers a
significantly better price, even though an
order of 400 units of silk will not qualify for a quantity
discount. Preston Premium is more expensive
than Reliable Clothing
and United Fabrics has
a minimum order
quantity of 500 units.
Therefore, we place an
order for 400 units of
silk with Reliable
Clothing.
McGraw-Hill Practice Operations
14
Thanks to our reliable suppliers, the requested
quantities of silk and khaki arrive exactly as
promised in February, week 2, and can be used in
production the following week.
24. However, we have encountered a
snag! The sorting capacity in the
warehouse is insufficient to process
the shipments. 98 units of khaki and
2 units of silk are left unsorted. This is
going to delay production.
This element of operations is dealt
with in Module 4, where you will get
the opportunity to expand your staff
for different departments. In the
meantime, it’s vital to run the
numbers ahead of time to avoid
these situations, especially since
hiring more staff may not be an
option for you.
Due to the delay in getting materials sorted, the slacks and
shorts are not completed and in finished
goods inventory until February, week 4. As a result, you would
be forced to use expedited shipping to
get the products to the customers on time at an additional cost
of $404! That small holdup will
significantly impact your bottom line!
McGraw-Hill Practice Operations
25. 15
Quality Inspection
Stock inspections can increase the quality of your raw
materials. This identifies and removes sub-
standard items, decreasing the available quantity but increasing
the overall quality of the remaining
stock. Inspection is
generally an expensive
option since you are, in
effect, throwing away raw
materials that you’ve
already paid for.
In Module 2 gameplay, you
are prompted to inspect a
shipment of Denim. Quality
inspection is initiated from
the Material Stock window.
Students are asked to confirm the inspection…
…and are shown the results of the inspection. Here, 19
“defective”
units were removed, raising the quality level of the 81
remaining units
to 59.0.
26. However, inspection is rarely an
efficient strategy for improving
quality. In fact, if a higher quality
material had been purchased in the
first place, the total cost of the
materials would be significantly
lower.
United Fabrics offers a higher-quality
denim for $1.80 per unit.
A comparison of final cost per unit
shows that purchasing from United Fabrics would result in a
lower cost of ownership.
McGraw-Hill Practice Operations
16
Red Maple Fabrics United Fabrics
Purchase Price per Unit $1.50 $1.80
Inspection Cost 19 x $1.50 = $28.50 $0.00
Final Quantity 81 100
Final Cost per Unit $178.50/81 = $2.20 $1.80
27. So how can inspections help you? Well, they can allow you to
make use of extra materials. Perhaps you
ordered cotton at a quality of 40 and you have several hundred
left over. If a small order comes in with
a quick turnaround at quality 50, you may be able to produce it
right away by inspecting the lower
quality material and finding enough quality 50 material to get
the job done.
Quantity Flexibility and Supplier Capacity
Although price is an important consideration in vendor
selection, ability to meet surges in demand is
also an
important
attribute.
Vendors with
low levels of
available
capacity may be
unable to meet
demand.
For example,
Alpine and
Tigerlily Textiles
are very similar
suppliers of
wool. Both have
the same price,
28. reliability, and
quality levels.
However, their
available capacity is not comparable.
McGraw-Hill Practice Operations
17
Vendor selection must include more aspects than just quoted
price. Quantity discounts, lead times, and
other factors can make a significant difference between vendors.
Creating a Vendor Scorecard
By now it is clear that there are several different dimensions
you can use to evaluate the suppliers.
These include price, quality, and reliability. This data can be
used to prepare a vendor scorecard. For
example, an evaluation of cotton suppliers can be prepared by
gathering data from the Receiving
screen.
McGraw-Hill Practice Operations
29. 18
After gathering this data for all cotton suppliers, the following
table can be assembled.
Supplier Price Quality Reliability
Owens Textiles $0.08 50 Low
Freeway Fabrics $0.08 25 Medium
Preston Premium $0.12 80 High
Reliable Clothing $0.10 35 High
Tigerlily Textiles $0.10 60 Medium
United Fabrics $0.12 70 High
The vendor scorecard can be prepared in many ways. One …
MAT 510 – Homework Assignment
Assignment 4
The data in below table lists country code and the order to
remittance (OTR) time for hardware / software installations for
the last 76 installations (from first to last). OTR is the time it
takes from an order being placed until the system is installed
and we receive payment (remittance). Because this company
30. does business internationally, it also notes the country of
installation using a country code. This code is listed in the first
column.
Table: Country Code and OTR Cycle Time for Software
Systems Installation
Country Code
Cycle Time
Country Code
Cycle Time
1
20
5
29
1
24
6
40
1
46
7
157
1
26
8
19
14
38
5
24
1
15
1
81
1
15
34. 7
53
7
44
7
53
1
21
7
48
1
22
5
21
1
50
1
19
Use the date in table above and answer the following questions
in the space provided below:
1. Does the OTR time appear to be stable? Why or why not?
2. If you were to use a control chart to evaluate stability, which
chart would you use? Why?
3. What can you learn about the distribution of the installation
process?
4. Does it appear that the country has an impact on installation
time? Why or why not?
Type your answers below and submit this file in Week 6 of the
online course shell:
35. MAT 510 – Homework Assignment
Homework Assignment
Describe a work task, a hobby, or another activity that you
regularly do, and sequentially list the various actions you take
in order to complete this activity. You will need to repeat this
activity at least two times to see if the changes you engage in
will assist in reducing the amount of time. Consider the
complexity of your list and the amount of steps required to
complete the activity. Choose an activity that you complete on a
daily basis.
Please consider the choices below or select one task from
personal experience:
· Preparing for a jog, workout, or other sports related activity.
· Cooking a meal or preparing a sandwich.
· Making coffee in the morning.
· Cleaning the house.
· Washing the car.
· Bathing/grooming your dog or cat.
· Setting up a grill to BBQ.
Answer the following questions in the space provided below:
1. How many steps did it take you to complete the activity?
2. What time did each step take and how much time was delayed
between steps?
3. What was the average time each attempt took? Calculate the
average of each repetition. Include your data following the
assignment one example provided under Instructor Insights –
Week 1
4. Differentiate the main actions between doing and improving
your activities. Use the textbook to support your explanation.
See page 7-9.
5. Determine the overall manner in which variation has affected
your activities. Explain what is variation and the importance of
55. distribution permitted without the prior written consent of
McGraw-Hill Education.
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them
produce
to
used
inputs
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produced
services
or
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