Basheer M. Khumawala

ISO 9000 certification: The financial performance implications

ISO 9000 certification has become an increasingly popular option for US firms seeking to improve their internal operations and competitive positions. The current study explores the relationship between ISO 9000 certification and financial performance. Most research in this area has been anecdotal in nature. The empirical studies that have addressed this relationship have not only been limited, but also have been largely contradictory. In an attempt to reconcile these conflicting results, a multivariate, repeated measures research design was utilized. Our results indicate that ISO 9000 certification has a very limited impact on financial performance, as measured by return on assets, however this effect dissipates quickly over time.

An improved algorithm for solving a multi-period facility location problem

Abstract An exact algorithm for the multi-period facility location problem is proposed that efficiently integrates mixed-integer and dynamic programming methods. Two simplification procedures are introduced to reduce the size of the general multi-period facility location problem substantially. Because the proposed algorithm utilizes dynamic programming to obtain the optimal sequence over the entire planning horizon, many near-optimal solutions also become available that are extremely useful for postoptimality analysis. The solution method is tested and compared with a well-known procedure on several problems with varying conditions. The comparisons appear very promising, and the required CPU times by the proposed method are substantially reduced.

A simulation study of focused cellular manufacturing as an alternative batch-processing layout

Abstract This paper is aimed at studying focused cellular manufacturing (FCM). We define FCM as a layout scheme that groups components by end-items and forms cells of machines to fabricate and assemble end-items. It is not classified as a cellular manufacturing layout since it does not attempt to take advantage of process similarities. It also is not classified as a flow shop since there are no machines dedicated to individual operations and the machines are not arranged in a series. The results indicate that the FCM scheme has a batching advantage (i.e., it has to wait less time to batch components before assemble). This advantage dominated the balanced machine utilization benefit of the job shop (JS) layout scheme. The JS was only able to overcome the batching advantage when there were small batch sizes or large setup time magnitudes.

Multi-level lot sizing in material requirements planning: an empirical investigation

Abstract The research report in this paper was a result of a recent article by Yelle [8]. He reports computational results using all combinations of four single level heuristic lot sizing rules, which are applied sequentially to a two level problem in a Material Requirements Planning (MRP) environment. To test the impact of the different combinations of these lot sizing rules he employed six different demand patterns for the end-items which range from level demand to demand which is intermittent throughout the planning horizon. In our research we utilized the same data as Yelle and conducted a more extensive analysis by adding (a) two more recent and powerful single level heuristic rules, namely, the least unit cost heuristic and Silver and Meals least-cost per period heuristic, (b) the very well known single level optimum method of Wagner-Whitin[7], and (c) a multi-level heuristic proposed recently by McLaren and Whybark [4]. The results show a significant improvement in many cases over the best solutions reported by Yelle. Further in this paper, we also provide a much simpler mathematical formulation of the multi-level lot sizing problem than found in the literature. This formulation was advantageously used to determine optimum solutions using IBMs Mathematical Programming System Extended (MPSX) to the aforementioned problems.

MRP lot sizing with variable production/purchasing costs: formulation and solution

SUMMARY The research on lot sizing is extensive; however, no author in the literature reviewed to date provides an optimal solution algorithm to a prevalent problem which is found in manufacturing. A multi-level, general product-structure, variable-cost model is presented which follows the procedure of a closed-loop material requirements planning (MRP) system, and incorporates many conditions that production and material managers find in practice. A branch and bound (B&B7) algorithm is developed. The efficiency of B&B is derived from effective lower bounds and solution procedures which are determined on the basis of the space-time structure of the MRP lot-sizing problem and its non-convex total-cost function. This path-dependent lower bound is computationally efficient and guarantees an optimal solution. The B&B algorithm is tested on problems and compared to heuristics in the literature.

An empirical test of Deming’s chain reaction model

The contributions of W. Edwards Deming to quality management theory and practice cannot be overstated. One important theoretical contribution made by Deming was his Chain Reaction Model, which postulates that the impact of improved quality on financial performance is primarily indirect in nature. Although this important theoretical model is now decades old and has received considerable attention in the practitioner literature, the theorised indirect relationship between improved quality and financial performance has only recently begun to receive empirical testing. Deming’s model is partially tested in the current study utilising a sample of US firms that have been certified by major corporations as having implemented effective TQM practices. The results provide support for Deming’s contention that the impact of improved quality on financial performance is primarily indirect in nature.

Focused cellular manufacturing: an alternative to cellular manufacturing

This paper is aimed at comparing cellular manufacturing with focused cellular manufacturing. We define focused cellular manufacturing as a layout scheme that groups components by end‐items and forms cells of machines to fabricate and assemble end‐items. It is not classified as a cellular manufacturing layout since it does not attempt to take advantage of process similarities. It also is not classified as a flow shop since there are no machines dedicated to individual operations and the machines are not arranged in a series. In addition, this research includes batching and assemble times in its criteria which few researchers in this area have done. The results indicate that the focused cellular manufacturing scheme has a batching advantage. This advantage out‐weighed the set‐up time reduction advantage of the cellular manufacturing scheme for average end‐item completion times and average work‐in‐process inventory levels. The cellular manufacturing scheme overcame the batching advantage only when there were small batch sizes or large set‐up time magnitudes.

Empirical enhancements to Deming's chain reaction model

Through his chain reaction model, W. Edwards Deming postulated that the impact of improved quality on financial performance is primarily indirect in nature. Although this important theoretical concept is now decades old, it has only recently received empirical attention, including a previous companion study. The current research effort seeks to extend the previous companion study by testing three alternative models that represent theoretical enhancements to Demings original formulation. These models are tested utilising a sample of US firms that have been certified by major corporations as having implemented effective TQM programmes. Results show that all three models provide empirically valid enhancements to Demings original model. In addition, these three alternative models provide additional support to Demings contention that the impact of an effective TQM programme on financial performance is primarily indirect in nature.

An efficient heuristic procedure for the single-item, discrete lot sizing problem

Abstract This study looks at the single-item discrete lot sizing problem with backorders. Most of the studies in the literature on lot sizing problems do not allow for backordering. This paper modifies some of the heuristic rules developed originally for the facility location problems and applies them to the lot sizing problem. The heuristic rules are tested and evaluated for their efficiency. The findings of this study illustrate that the heuristic rules provide solutions that are either optimal or very close to optimal.