Guest Posts – Page 3 – The OM Blog by Heizer, Render, & Munson

Guest Post: The Dangerous State of Air Traffic Control in the U.S.

Temple U. Professor Misty Blessley brings up a very timely OM issue-air safety.

Newark Liberty International Airport (EWR) has recently experienced multiple air traffic control outages, during which radar and communication systems used to track aircraft temporarily went offline. These disruptions have lasted up to 90 seconds in several incidents. Flights into and out of EWR have decreased by approximately 35% as a result.

When an outage occurs, air traffic controllers may issue a ground stop, essentially a pause in departures, similar to a real-life game of “red light, green light”—for planes awaiting take off. While Module D of your Heizer/Render/Munson textbook introduces queuing theory, the real-
time queues at EWR are available here. In practice, incoming planes may be directed into holding patterns that resemble stacked racetracks in the sky.

However, when radar and communication systems go dark, there’s no safe way to guide aircraft into these stacks or maintain proper separation. Once communication is restored, controllers must work through the resulting queues to safely sequence and clear aircraft for landing. Outages lead to flight delays and cancellations while also raising serious safety concerns. How can the skies be stabilized?

Modernize Technology – Many Federal Aviation Administration (FAA) systems still rely on outdated technology, including some that operate on decades-old hardware such as floppy disks. The federal government is actively working to modernize these systems by investing in updated
software, hardware, and communication networks.

Support and Expand the Workforce – During the recent incidents at EWR, some air traffic controllers have taken trauma leave, underscoring the high-stress nature of the profession. The U.S. has been facing a persistent shortage of qualified air traffic controllers, due in part to limited training capacity—currently, only one FAA facility is responsible for training controllers. With low acceptance rates and rigorous requirements, meeting demand has been challenging. However, efforts are underway, including the involvement of new schools, to expand training opportunities and help grow the workforce.

Classroom discussion questions:
1. In Ch. 17, Maintenance and Reliability is discussed and Ch. 6 covers Managing Quality. What lessons can be applied to make the skies safer?
2. What domino effects are likely to ensue once the plane has safely landed? What do you think can be done to attract more air traffic controllers?

Guest Post: The Missing Digit Puzzle

Prof. Andrew Stapleton at U. of Wisconsin-LaCrosse shares this teaching tip to enliven your class

This math puzzle looks a lot more intimidating than it really is. It is called the Missing Digit Puzzle. Pick a student to come to the front and write down a number on the white board or overhead projection. Hide or otherwise cover your eyes in some way so that you can’t see what your student is writing.

Ask your student to secretly write down ANY number (at least four digits long). e.g. 78341
Ask her to add up the digits… e.g. 7+8+3+4+1 = 23 … and then subtract the answer from the first number e.g. 78341 – 23 = 78318
Ask her to then cross out ONE digit from the answer. (It can be any digit except a zero) e.g. 7x318
She then reads out what digits are left e.g. 7-3-1-8. Even though you haven’t seen any numbers, you can say what the missing digit is! EIGHT

THE SECRET:
This great puzzle relies on the power of 9.
After your student has added up the digits and subtracted them, the answer will ALWAYS divide
by 9. If a number divides by 9, then when you add the digits up, they will also divide by 9. If
you check our example 7+8+3+1+8 = 27 which does divide by 9. When she crosses a digit
out, she then reads out the digits that are left. You add them up. In the example we had 7+3+1+8
= 19. All you do now is see what you have to add on to your answer to get the next number that
divides by 9! The next number to divide by 9 after 19 is 27. So, you need to add on EIGHT to
get to 27. This is the number that was crossed out!

Here’s another example:
Say the number written down is 873946284 (yikes!).
Your friend adds the digits 8+7+3+9+4+6+2+8+4 = 51
Your friend does the subtraction: 873946284 – 51 = 873946233
(So far you have NO IDEA what numbers are whizzing around!)
Your friend crosses a digit out 87394x233 and tells you what’s left.
You add 8+7+3+9+4+2+3+3 = 39.
The next number that divides by 9 after 39 is 45. As 45-39=6 this means that SIX is the missing
digit.
You can do this one quickly and even have other students come up and give it a try – and you
will always be able to tell what the missing digit is!

Guest Post: Mass Timber–A Sustainable Alternative Worth a Closer Look

Temple U. Professor Misty Blessley raises an interesting point in her Guest Post

Mass timber refers to beams, columns, or panels composed of smaller wood pieces bonded together using fasteners, such as nails, or other adhesives. These engineered wood products are increasingly being used in the construction of high-rise buildings, praised for their strength, durability, versatility, and sustainability.

At a time when the U.S. is relying on steel imports to meet demand—and tariffs threaten to drive prices higher, causing delays or cancellations of some construction projects—mass timber presents a compelling alternative that deserves objective evaluation. Mass timber as a building material is gaining traction.

The Benefits:
Mass timber offers a significantly smaller carbon footprint compared to traditional materials like steel. As a renewable resource, wood supports sustainability goals, and “track and trace” technologies now enable end-to-end transparency, from forest to finished product. Notably, mass timber is reported to match steel in strength and is fire resistant. Additionally, clear-cutting practices, which involve harvesting most or all trees in an area simultaneously, allow for high productivity. Once harvested and processed, the prefabricated nature of mass timber allows for faster construction and shorter project timelines.

The Trade-Offs:
Despite its advantages, mass timber comes with concerns. Critics have raised the issue of greenwashing, questioning whether its environmental claims are justified. Also, building codes, historically designed with steel in mind, can lengthen project times because they are still evolving to accommodate this new material. Finally, while competitive, costs have been reported to be marginally higher than conventional options.

Classroom discussion questions:

In Supplement 5 of the Heizer/Render/Munson textbook, sustainability is defined as meeting the needs of the present without compromising the ability of future generations to meet their needs. Consider the trade-offs of clear-cutting through the lens of environmental sustainability.

2. Seven TQM tools are discussed in Chapter 6. As a project manager of a new building using mass timber, create a cause-and-effect diagram and conduct an initial analysis of what should be considered in preparing to embark on the project. Include all of the four M’s – material, method, manpower, and machine.

Guest Post: Not Implementing ERP Systems Can Be Costly

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients

Companies that hesitate to invest in an Enterprise Resource Planning (ERP) system (see Chapter 14 in your Heizer/Render/Munson text) often believe they are saving money. But the hidden costs of not implementing an ERP system can significantly impact efficiency, scalability, and profitability. While the upfront investment in ERP may be substantial, the long-term consequences of operating without one can be far more costly. Here are 8 reasons why:

1. Inefficiency Leads to Operational Silos One of the primary disadvantages of not using an ERP system is the lack of integration among different business functions. This fragmentation means employees waste time manually transferring data between systems, increasing the risk of errors.

2. Increased Human Error Leads to Data Inaccuracy Manual data entry is prone to mistakes, which can have significant repercussions on financial reporting, inventory management, and customer service. Over time, inaccurate data can result in revenue loss, compliance issues, and reputational damage.

3. Poor Decision-Making Due to Lack of Real-Time Data Businesses without an ERP system often rely on outdated reports, which can lead to poor decision-making, missed opportunities or reactive rather than proactive business strategies.

4. Higher Operational Costs Without ERP, companies must invest in multiple software solutions, each with their own licensing fees, maintenance costs, and IT support requirements. Over time, these expenses can add up to more than the price of an ERP system.

5. Limited Scalability and Growth Restrictions Companies relying on outdated systems or spreadsheets often struggle to scale efficiently, leading to bottlenecks in production, supply chain management, and customer service.

6. Compliance and Security Risks ERP solutions provide built-in compliance tools and robust security features to protect sensitive business data.

7. Customer Dissatisfaction Can Lead to Lost Revenue A lack of integration between sales, inventory, and customer service can lead to poor customer experiences with delayed order processing, inventory shortages, and inconsistent communication.

8. Competitive Disadvantage Companies that don’t adopt ERP risk falling behind competitors who integrate ERP technology to optimize their operations. In a digital-first economy, businesses that prioritize automation, real-time data analysis, and efficiency gain a significant edge over those relying on outdated systems.

Guest Post: The Importance of Shelter Location in Disaster Management

Amir Hossein Moadab is receiving his PhD at Washington State U., under the tutelage of Dr. Chuck Munson.

In late September 2024, Hurricane Helene devastated parts of the southeastern U.S., with Florida and the Carolinas suffering the greatest impact. The storm resulted in over 250 fatalities and displaced tens of thousands. Alongside other disasters such as the increasingly frequent California wildfires, this event highlights a critical question: if we can’t prevent disasters, how can we reduce their impact? One of the most important parts of disaster preparedness and response is figuring out where to locate emergency shelters, a decision that can significantly influence survival rates, response speed, and fair access to resources for everyone affected.

Shelter location isn’t just about choosing a convenient spot on a map; it’s a complex decision that involves balancing accessibility, capacity, existing infrastructure, and the needs of the community. In a real emergency, roads might be blocked, public transportation may shut down, and people with disabilities or no access to private vehicles face even bigger challenges. Overcrowded or under-equipped shelters slow things down and make it harder to meet people’s basic needs, especially for vulnerable populations.

To make shelters more effective, planners increasingly turn to social vulnerability indices (SVIs), which use demographic and socioeconomic data (like age, income, disability status, and housing conditions) to identify communities most at risk. Placing shelters closer to these communities helps ensure people can get to safety quickly. Turning that insight into action means using various planning tools and optimization models to figure out the best shelter locations.

The main methods used include: (1) models which aim to reach the largest number of people within a certain response time, (2) models which help reduce the average or maximum distance people must travel to reach a shelter, (3) models that prepare for unpredictable disruptions like blocked roads or power outages, and (4) optimization models that balance that cost, equity, and accessibility.

In the U.S., FEMA plays a leading role in this process. FEMA uses geographic tools like GIS, hazard maps, and community risk profiles to help states and cities decide where shelters should go, aiming to make them reachable, practical, and equitable. Shelter planning isn’t just a technical task, it’s ultimately about people. Done right, shelter planning saves lives, eases suffering, and builds trust.

Classroom Discussion Questions:

What are the most important key success factors in determining shelter locations during a disaster?
How do disruptions affect shelter planning decisions, and how can models account for these uncertainties?

Guest Post: An Impressive Two-Minute Math Challenge to Use in Class

Prof. Andrew Stapleton at U. of Wisconsin-La Crosse shares with us a fun teaching tip.

Kick off your class with this captivating two-minute math trick!
Step 1: Grab a calculator. Ask everyone to take out their calculator or open the calculator app on their phone.

Step 2: Create a six-digit number. Instruct each student to think of any three-digit number and repeat it to form a six-digit number. For example: 729 becomes 729729.

Step 3: The magical prediction. Invite students to shout out their six-digit numbers all at once. Pretend you’re calculating each one in real-time and confidently declare:
“I am going to calculate quickly and give you three directions and you will never have a remainder. That is, each iteration you will have a whole number. Follow my instructions, and your final result will always be your original three-digit number!”

Step 4: The steps.
Have everyone perform these operations on their six-digit number:
Divide the number by 13 (they’ll get a whole number).
Divide the result by 11 (still a whole number).
Divide that result by 7.
Surprise! Each student ends up with their original three-digit number.

How does it work?
The math is straightforward but seems like magic:

Multiplying a three-digit number by 1001 (i.e., 13×11×7) creates a six-digit number by repeating the original. Dividing in reverse (by 13, then 11, then 7) simply uncovers the original three-digit number.

The real fun? Your dramatic prediction adds flair and mystery, making the trick seem far more complex than it is. Enjoy the “wow” moment as your students are amazed!

Guest Post: Reliability of Bridges

Retired Temple U. Prof. Howard Weiss is the developer of the POM and Excel OM software that we provide free with our text.

On March 26, 2024 the container ship Dali crashed into the Francis Scott Key Bridge that spans Baltimore harbor. Ships had crashed into major bridges previously but in this case the damage was far worse than usual. The bridge collapsed into the harbor, 6 died, and, of course, travel across the harbor was affected.

The Dali was not even that large, with a capacity of 10,000 containers. (The largest container ships have a capacity of 24,000 containers). The obvious operational problem is that the bridge, which carried over 30,000 vehicles daily could not be used and the vehicles had to take either alternative routes. Reconstruction of the bridge began in January, 2025 but the detours will be needed until Fall, 2028.

The NTSB reported that Maryland did not conduct a test that would have identified structural risks for the bridge. After this incident, the NTSB indicated that 68 bridges that have commercial traffic in the U.S. needed to be inspected.

A recent study provided a list of the 20 bridges with the highest probability of having major damage due to being hit by a ship. The results of the top and bottom five in that list are displayed below along with reliability calculations in the shaded area.

operations management blog The table performs these computations for each of the 20 bridges for a 1- year period, a 10-year period and a 100-year period.

The single year reliability is simply = # of years minus 1 divided by # of years. For example, for the Huey P. Long Bridge, reliability is 16/17 = .9412. That is, there is roughly a 6% chance of an accident in any given year. From your Heizer/Render/Munson textbook (Ch. 17), the 10 year reliability is given by

Rs=R 1 ×R 2 ×R 3 ×…× R 10

And since the reliability each year is the same this is identical to R 1 ^10. Thus, there is roughly a 50% chance that in 10 years the Huey P. Long bridge will have an incident. The safest of the 20 bridges, the John Blatnik has a less than 1% chance of a major accident over 10 years. Similar computations are given for a 100 year period.

Classroom Discussion Questions
1. What actions can be taken to reduce the chance of a major accident?
2. If the number of years between collisions can be increased by 10% (rounded up) how does that affect the 10 year reliability for the Long and Blatnik bridges?

Guest Post: The Egg Shortage and Managing Sourcing Risk

Temple U. Professor Misty Blessley raises a timely topic.

Chapter 11 of the Heizer/Render/Munson textbook explores strategies for mitigating supply chain risks. This is particularly relevant in considering the current egg shortage. As companies produce less and purchase more, sourcing agents must fully understand the products they are sourcing to effectively manage risks. It is crucial for sourcing agents to consult experts from various fields to understand the causes of the shortage and anticipate future challenges and opportunities. A recent article describes the egg shortage as a “perfect storm of disease, costs, and demand.” The H5N1 bird flu is a key driver, requiring the depopulation of entire flocks when just one bird is infected, according to the USDA. Inflation has also raised the costs of feed, fuel, and labor, while demand spiked during the holiday season. This occurred when 17 million birds were culled, and replacing lost flocks takes months.

Four mitigation strategies can address the shortage:

1. Increased U.S. Domestic Production: Experts predict that domestic egg production in the U.S. will become more productive. Chickens tend to lay more eggs during longer days, temperate weather, and their first 1-2 years of life—conditions currently prevailing in much of the U.S.

2. Increasing Imports: Turkey is being considered as a viable source to increase egg imports. Turkey as the only country from which the U.S. imports eggs.

3. Reconsidering Broiler Eggs: The use of broiler eggs, which are fertilized eggs laid by chickens raised for meat production, is being reconsidered after being banned since 2009. Experts suggest that since these eggs are pasteurized, they could safely be used for products like cake mixes and salad dressings. Broiler eggs are used in animal feed and those unsold have traditionally had to be discarded. Over 5.4 billion eggs have gone to waste.

4. Improved Storage and Transportation: To preserve eggs, firms can implement safer transportation and storage methods. At 0°C, eggs can be stored for about six months. Fresh eggs are highly sensitive to improper storage and can be spoiled if stored near odorous goods.

By implementing these strategies, firms can mitigate disruptions caused by the egg shortage.

Classroom discussion questions:

·1. What are the tradeoffs with the use of broiler eggs?

·2.What other risk mitigation tactics would you consider as a sourcing agent?

Guest Post: The Natural Gas Supply Chain

Prof. Howard Weiss shares his insights with our readers monthly.

Natural Gas is a resource with several uses and, in fact, almost 50% of U.S. homes use it for heating. This figure shows the supply chain for natural gas.

Resource location Natural gas is extracted from rock formations, wells and coalbeds.

Pareto Principle Natural gas is produced in varying amounts in 95 countries. The U.S., Russia, Iran, and Qatar produce half of the natural gas worldwide. Five states, Texas, Pennsylvania, Louisiana, W. Virginia and New Mexico, produce over 60% of the total natural gas in the US. Thus, both U.S. and worldwide production follow the Pareto principle as explained in the quality chapter (Ch. 6).

Transportation The supply chain chapter (Ch.11) lists six major means of distribution – trucking, railroads, airfreight, waterways, multimodal and pipelines. Unlike oil, before natural gas is processed it can only be transported through pipelines.

Project Management. Building the pipeline is a project with two major parts. The pipeline company does not own the land where the pipeline is, but rather needs to get legal access to the properties. The second part is the construction of the pipeline itself. This involves digging and bending pipes to fit the planned route of the pipeline. Companies install about one mile of pipe per day. The U.S. has more than 300,000 miles of main pipelines, while Russia has more than 100,000.

Quality control After construction the pipeline is testing using water piped at a higher pressure than the gas will be transported.

Processing The gas goes to a compressor station (where impurities are removed) and then is pressurized to move it post-processing.

Post Processing Transportation The gas is then moved at 25 miles per hour through pipelines. Some gas is liquefied by chilling it to -263 degrees Fahrenheit so it can be shipped by special tanker ships and rail cars. Natural Gas is 600 times more in volume than liquefied natural gas. LNG can also be shipped to places that do not have pipelines.

Storage Currently there are 400 storage sites for natural gas in the U.S.

Classroom Discussion Questions:
1. Does your residence use natural gas? If so, what are its uses?
2. Some natural gas that is discovered is not sold but rather is burnt off at the site where it is found. Why do you think the gas is wasted rather than being sold?

Guest Post: The Orange Juice Supply Chain

Prof. Howard Weiss, creator of our free software packages, Excel OM and POM, shares his concerns as a part-time Floridian.

In simplest form, the OJ supply chain is very straightforward. It begins with planting orange trees, harvesting the oranges, preparing the oranges for processing, juicing the oranges, packing the orange juice, shipping the orange juice to distribution centers, storing the orange juice and then shipping the juice to retail outlets. The figure below is very similar to the supply chain illustrated in Figure 1.2 of your textbook.

There are, of course, additional aspects to the supply chain. For example, planting and maintaining trees involves supplying fertilizer and water. Packing the OJ requires the manufacturing of containers and, of course, shipping requires trucks, trains, ships and planes.

Supply Chain Risks: It is well-known that orange trees need to be protected from freezing temperatures and that Florida hurricanes can damage crops. There are other difficult problems facing OJ providers. One is the citrus greening disease. This disease causes the fruits to become inedible and eventually the tree dies. In addition, since many farmers have sold their farms to developers, production of oranges in Florida have dropped to just 8% of what production was 20 years ago! Tropicana now uses oranges grown in Brazil, which is the largest producer of oranges.

Your textbook (see Ch.11) notes that environment and natural catastrophes, such as the disease, can affect supply chain risk and suggests using multiple suppliers or alternative sourcing to offset the risk. This is precisely what OJ producers have done by using oranges from other countries, most notably Brazil and Mexico, which crops have not suffered as much damage due to disease as in Florida. In addition, OJ producers have created new products that mix oranges with other fruits such as apples and pears to offset the loss of oranges.

Declining Demand: OJ manufacturers are also facing a decline in demand due to increased prices to consumers, and consumers questioning the nutritional value of orange juice especially considering the large amount of sugar in OJ. Orange juice demand has dropped while sales of teas, coffees, seltzers, energy drinks and bottled water have increased. Consumption is expected to continue to decrease over the next 5 years.

Classroom discussion questions:
1. Over the past 10 years OJ consumption in thousands of metric tons has been 733, 700, 663, 631, 581, 572, 530, 556, 542, 527. Forecast consumption for the next 5 years.
2. At what stage of its life cycle (see Figure 2.5) is orange juice?

Guest Post: ERP as a Competitive Differentiator

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients

In 2025, exceptional customer service is king. It is also a competitive differentiator. To meet growing customer expectations, businesses are turning to enterprise resource planning (ERP) systems, the topic of Chapter 14 in your Heizer/Render/Munson text. Modern ERP solutions enable companies to centralize data, respond to customer needs in real time, and use feedback to drive continuous improvement.

Here’s how ERP software is helps businesses achieve customer service excellence.

ERP Software Centralizes Customer Data Management through a unified platform to manage customer data:

360-Degree View of Customers: By consolidating data from sales, marketing, and support teams, ERP systems create a single source of truth. This allows businesses to track customer interactions, purchase history, and preferences, enabling tailored interactions.
Improved Collaboration: With centralized customer data, different departments can collaborate more effectively. Sales, support, and operations teams can work together to address customer needs without duplicating efforts or missing critical details.
Data-Driven Personalization: Leveraging customer insights from ERP systems, businesses can personalize their offerings, recommend relevant products, and deliver experiences that resonate with individual preferences.

ERP Software Improves Responsiveness with Real-Time Insights and streamlining processes:

Streamlining Service Requests: ERP systems integrate with customer service platforms to manage tickets, prioritize requests, and route them to the appropriate teams.
Order Tracking: Real-time order tracking allow customer service teams to provide instant updates on order statuses, shipping details, and estimated delivery times, improving transparency and trust.
Proactive Issue Resolution: By analyzing real-time data, ERP systems can identify potential issues, such as delayed shipments or inventory shortages, before they impact the customer. Businesses can take proactive measures to address problems and maintain satisfaction.

ERP Software Integrates Customer Feedback by helping businesses collect, analyze, and act:

Feedback Collection: ERP tools can integrate with surveys and reviews to gather customer opinions and sentiments. This provides a comprehensive view of customer satisfaction.
Data Analysis for Insights: ERP analytics modules process feedback data to identify trends, recurring issues, and areas for improvement. This allows businesses to prioritize actions that enhance service quality.
Closing the Feedback Loop: By integrating feedback with CRM and support systems, ERP solutions enable businesses to inform customers about the steps taken to address their concerns, building trust and loyalty.

Guest Post: Fashion Influencers and Revamping Costly Product Returns

Temple U. Professor Misty Blessley raises an interesting inventory issue–returns.

Fashion influencers and their followers are contributing to the increase in rising product returns. According to the National Retail Federation, returns accounted for 17% of retailers’ total 2024 sales. Online purchases have a 26% return rate compared to in-store purchases (10%). Many online shoppers intentionally buy items they plan to return. Statista reports that clothing (24%), shoes (16%), and accessories (12%) are the most returned products – the exact product footprint of fashion retailers. Several recent articles shed light on the influencer effect and tips for revamping costly product returns in retail fashion.

Fashion influencers have popularized trends that promote returns behavior:

Hauls: Influencers showcase purchased fashion items, then decide whether to keep or return them based on follower feedback.
Wardrobing: Influencers buy items for temporary use such as content creation and return them afterward.
Bracketing: Influencers buy multiple sizes or colors of a product to find the perfect fit, with the intention of returning the rest. About 58% of consumers buy multiple sizes for this reason, with 75% of returns attributed to fit.
Influencing: 56% of followers make purchases recommended by an influencer, many of which are later returned.

Returns come with significant costs, including shipping, restocking, reselling at a discount, and administrative expenses. Retailers are adopting strategies to curb or better manage returns:

Charging return fees: Brands like Zara and H&M now charge for returns.
Clarifying return policies: Shortened return windows, stricter conditions for full refunds, and more items marked as final serve to narrow return opportunities.
Improving sizing tools: Enhanced size charts, virtual reality fitting tools, and online fitting rooms help shoppers make better choices.
Implementing logistics systems: Retailers are investing in digital tools to streamline and manage returns more efficiently.

As discussed in Chapter 1 of your Heizer/Render/Munson textbook, best practice can be achieved when operations and supply chain management, marketing, and finance work together.

Classroom discussion questions:

After 89% of retailers adjusted their policies to deter returns, 59% saw return rates increase. What factors could explain why these policies fail to get the desired result?
The SCOR Model, discussed in Chapter 11, outlines attributes for processes like source, make, and deliver. How are the attributes for returns like or different from these processes?

Guest Post: The Supply Chains Behind a Strong Holiday Shopping Season

Temple U. Professor Misty Blessley shares her insights today, on Black Friday.

The holiday shopping season is in full swing, and companies are optimistic about their year-end financial performance. Operations and supply chain managers have a crucial role. Chapter 1 of your Heizer/Render/Munson textbook explores how marketing and operations management strategies can drive bottom-line results.

Customer spending is expected to be strong this holiday season. The National Retail Federation is forecasting winter holiday sales to rise by 2.5% to 3.5% over last year. Meeting this demand requires retailers to fulfill orders when, where and how customers want. Companies are strategically using both brick-and-mortar stores and e-commerce platforms to appeal to their customers.

Supply chains have stabilized after years of disruption. Thus, core products have been efficiently moved from warehouses to retail locations to ensure availability for traditional retail customers. Additionally, e-commerce channels are poised to efficiently fulfill customer orders. Many retailers are adopting cost-effective delivery strategies tailored to peak shopping events like Black Friday and Cyber Monday. Instead of defaulting to same- or next-day shipping, retailers are spreading deliveries over several days to reduce costs and balance labor.

Amazon bolstered its labor capacity by adding 250,000 seasonal hires. DHL’s CEO explains why spreading deliveries is a viable strategy – extending shipments by just a few days allows companies to control warehouse costs while still meeting customer delivery expectations.

OM and SCM plays a pivotal role in driving both revenue growth and cost efficiency. By offering customers flexibility in choosing their preferred shopping and delivery channels, retailers enhance the customer experience and boost sales. Simultaneously, costs are reduced by managing product delivery.

Classroom discussion questions:
1. In Chapter 6 of your textbook we learn that customer expectations are the standards against which service is judged. What is the effect of exceeding expectations on contribution? (i.e., same or next-day shipping)
2. Aggregate Planning Strategies are covered in Chapter 11. Which strategies are being used by retailers to support this holiday shopping season?

Guest Post: Forecasting Lessons Using PC Sales

Prof. Howard Weiss presents an interesting, real-world example of seasonality and forecasting.

If we examine PC unit shipments in the U.S. 2013-2023, by quarter, there are a couple of interesting lessons we can learn from the data.

The data are separated into pre-Covid and Covid time periods because it is obvious that the graph looks different before 2020 than at 2020 and beyond. If you look closely at the pre-Covid data, it is very easy to see the seasonality. Quarter 2 is higher than quarter 1, Quarter 3 is higher than Quarter 2 and Quarter 4 is higher than Quarter 3 in EVERY year from 2013 to 2019.

Chapter 4 of your Heizer/Render/Munson textbook discusses Seasonal Variation in Data. Using Excel OM for the method of Example 9 we find that the seasonal indices are as given in the table below for the pre-Covid period. In addition, using regression we find the line that fits the data best is:

Shipments (in millions) = 15.675 – .06*x

where x is the time period from 1 to 28.

Notice that shipments have been decreasing by 60,000 units per year. Using the regression equation, the forecasts for the next 4 periods in 2020 are given in the table

Pre-COVID	Percent of Demand	Seasonal Factors	X value (2020)	Forecasts 15.675 – .06*x	Actual (2020 data)
Quarter 1	21.6%	.862	29	13.935	10.83
Quarter 2	25.1%	1.003	30	13.875	15.70
Quarter 3	26.4%	1.057	31	13.815	23.62
Quarter 4	26.9%	1.076	32	13.755	19.03
			Total	55.38	69.28

Looking at the actual 2020 data, it is obvious that Covid caused a significant increase in PC shipments. The increase is even more pronounced in 2021. This is not surprising as more and more students and workers were working from home rather than in the office or university. Also, examining the graph, the seasonality for 2020-2023 is not as obvious as for the pre-Covid period.

During COVID	Percent of Demand	Seasonal Factors
Quarter 1	22.3%	.893
Quarter 2	26.3%	1.052
Quarter 3	26.8%	1.072
Quarter 4	24.5%	.982

When forecasts for 2020 were made in 2019 it was impossible to know that Covid would strike and affect shipments as much as it did. But by quarter 2 of 2020 it was clear that quantitative forecasts based on past shipments would have large errors. At this point it would be imperative to introduce a qualitative method into the forecasting process, as discussed in the chapter.

Guest Post: Electricity Power Lines and Operations Decisions

Prof. Howard Weiss survived the recent hurricane that hit Florida and shares his thoughts about losing power.

The two recent hurricanes, Helene and Milton, have devastated power lines in many places but especially in Florida and N. Carolina. Florida Power estimates that underground lines fared 12 times better than lines that were overhead during the hurricanes.

There are two situations utilities face, depending on whether it is a new installation or a change from aboveground to underground. In either case there are several OM factors that are discussed in your textbook that are relevant when deciding whether to use overhead lines are below ground lines.

Fixed costs In general, underground lines require trenches and manholes which are more expensive to build than erecting pylons/poles for overhead wires. Also, underground wires require special insulation. The cost of installation can vary depending on the locality. Underground lines cost 5-10 times as much as aboveground lines–$1.5 to $3 million per mile compared with $285,000 to $800,000 per mile for above ground lines.

The first overhead lines and poles were built in 1844 and at that time underground lines were tried but they failed.

Variable costs The major variable costs are for maintenance and repair. Underground lines are more difficult to maintain or repair. The major direct cost to consumers is the cost of being without electricity. Ultimately all of the costs will be borne by the consumers.

Capacity Above ground cables have roughly 6 times as much capacity as underground lines.

Reliability While below ground lines are not 100% reliable, they are more reliable than overhead lines. Above ground power lines can be felled by wind, ice storms, falling trees and damaged by squirrels. Below ground power lines can be washed away or corroded along coastal areas due to storm surges. In Winter Park, Florida, where 80% of lines are underground, 98% of customers had power during Hurricane Milton.

Lifespan Aboveground lines have twice the lifetime, 70 years, compared with belowground lines.

Risks Aboveground lines can spark and cause fires. Pacific Gas & Electric paid $55 million after its power lines started a destructive brush fire. Also, sometimes power needs to be shut off to prevent any fires.

Aesthetics Clearly, belowground lines lead to a more pleasing appearance than overhead lines.

Classroom Discussion Questions
1. Does your community have underground or overhead wires or both?
2. What analysis could be done to make the decision between overhead or underground lines?