Preliminary, Subject to Change Posted: 11/12/2024
Course Information and Syllabus
BUS 40000: Operations Management: Business Process Fundamentals
Winter 2025, Linwei Xin
(subject to change)
Course description:
This core course focuses on understanding levers for structuring, managing, and improving
a firm’s recurring business processes to achieve competitive advantage in customer respon-
siveness, price, quality, and variety of products and services. These levers are as applicable
to banks, hospitals, and brokerage firms, for example, as to traditional manufacturing. Pro-
cesses within firms, as well as between firms, i.e., supply chains, are explored. The funda-
mental principles underlying state-of-the-art practices are explored so that students learn to
critically evaluate these and other operational improvement programs.
The course teaches the basics of how to manage the operations of a firm, and how operational
issues affect and are affected by the many business decisions they will be called upon to make
or recommend in their careers. As such, this course is essential to students aspiring to become
consultants, entrepreneurs, or general managers. A working knowledge of operations is also
indispensable to those interested in marketing, finance, and accounting, where the interface
between these functions and operations is critical. Finally, an understanding of how firms
become market leaders through operations is important in investment careers.
Most sessions consist of in-depth case discussion, integrated with theory. As such, the course
is ideal preparation for many cases encountered during interviews for internships and full-time
positions.
Prerequisites:
Any previous or concurrent exposure to basic statistics is helpful.
Course Web Page: http://canvas.uchicago.edu
Instructor: Linwei Xin
Office: Harper 379.
Voice: (773) 702-5093.
E-mail: Linwei.Xin@chicagobooth.edu.
Sections:
• 40000-01: Thursdays, 8:30-11:30 AM, Harper C09 (In-Person Only).
• 40000-02: Thursdays, 1:30-4:30 PM, Harper C09 (In-Person Only).
• 40000-85: Saturdays, 1:30-4:30 PM, Gleacher 204 (In-Person Only).
Teaching Assistant:
Zi (Elaine) Ling. E-mail: zling@chicagobooth.edu.
Yaqi Xie. E-mail: yaqi.xie@chicagobooth.edu.
Jingyuan Yang. E-mail: jyang21@chicagobooth.edu.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Office Hours: By appointment.
Review Sessions:
• The TAs will go over the practice midterm and final exams.
• Saturdays 2/1 & 3/8, 5:00-7:00 PM, Zoom Meeting.
• Both sessions will be recorded.
Course Materials:
• Selection of readings and lecture notes which will be posted on Canvas.
• Assignments and Handouts will be posted on Canvas in pdf format (see below).
• Littlefield Technologies simulation.
• Optional texts (not required):
– “Managing Business Process Flows” by Anupindi et. al., Third Edition, 2011.
– “Matching Supply with Demand: An Introduction to Operations Management” by
Cachon and Terwiesch, Third Edition, 2011.
• “The Goal” by Goldratt1 (2nd revised or newer version, there is also an audiobook
version), optional reading.
Grading:
• Case assignments – 10%
Concept check assignments – 10%
Littlefield simulation – 5%
Class Contribution – 10%
Take-Home Midterm Exam – 20%
Take-Home Final Exam – 45%
• All homework assignments, cases, and concept checks are to be done in groups.
• The midterm is an optional/dropable exam. That is, the 20% of your course grade
allocated to the midterm exam will be determined as the better of your midterm and
final exam grades.
• If for any reason you cannot take the midterm exam at the scheduled time it will not
be rescheduled, I will shift the 20% onto your final exam, i.e., your final will be worth
65%. I strongly discourage you from using this option unless it is absolutely unavoidable.
(Note: graduating students must take the midterm to obtain provisional grades.)
• This class cannot be taken Pass/Fail.
• All grade disputes must be submitted in writing within two weeks of an assignment/exam
being returned. I reserve the right to regrade the entire assignment/exam.
• If you are not able to take an exam in your assigned session your reasons should be
documented with Academic Services. Arrangements will be made on a case-by-case
basis. If you cannot make the scheduled final exam of your section or be accommodated
through Academic Services you will take an incomplete for the course and may take the
final exam next time the course is offered.
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This book is one of the most widely read business books of all time. Unfortunately, we have noticed gen-
der/diversity issues in this book (it was written four decades ago). In the absence of a viable learning alternative, we
still include it in the syllabus but only as an optional reading.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Groups:
• On all group assignments you must work in a group of size 4 or 5 students from your
section. You may not work alone on group assignments. You may only put your name
on the group write-up if you contributed.
• Ideally, all group members should be enrolled in the same section they attend. If not,
please see below for implications on handing in homework.
Homework Assignments:
• Homework assignments are indicated on the course syllabus and will be posted on Canvas
a week before they are due.
• Homeworks come in two types: case assignments and concept checks. Both are to
be done in your group. Case assignments prepare your group to discuss the cases of
the following week. Concept checks review and solidify material from the previous week.
Cases are graded on a check+/check/check- system. Concept checks are graded carefully
with detailed solutions distributed on Canvas.
• Homeworks are due no later than the beginning of class. Submit your homework
electronically to Canvas through the submit assignments section.
• Please submit only one PDF file for the each assignment. Do not combine assignments
due the same week.
• Only one member of your group should submit the assignment. Include the names of
your group members in each submission.
• Homeworks not turned in at the beginning of the class they are due will receive a grade
of zero, since solutions are discussed in class and/or posted immediately after the last
class of the week. For those who are sick or have other documented reasons they cannot
complete the homework (through contacting Academic services) will have the grade value
of the assignment shifted to the final exam.
• Homeworks must be handed in during the first section of the week attended by any
group member.
Littlefield Technologies:
In the second half of the quarter, we will run the Littlefield Technologies simulation. Each
team will manage a factory that assembles Digital Satellite System receivers. Teams can
compare their progress with other teams in class in terms of their cash positions. More
details will be given in the assignment writeup, to be posted on Canvas.
• Students will need to register their teams (listing all team members). Students who do
not register, even if they participate in the game with their group, will receive a grade
of zero for the Littlefield assignment.
• Your grade will be based on a combination of your final cash position, relative to other
teams, and a writeup. Most of the weight will be on the writeup. A good writeup will
provide a detailed analysis and justification of the strategy used, rather than just an
anecdotal description of the actions taken.
• Any group that exerts little or no effort in playing the game will receive a low grade,
regardless of the quality of the writeup.
Class Participation:
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
• Be prepared to be cold-called.
• Class participation grades will be based on a combination of in class discussion, atten-
dance, and other forms of interaction with group members, the TAs, other classmates
and the professor.
Exams:
• Midterm Exam:
– Duration: 3 hours.
– Open book, open notes.
– The midterm will be conducted remotely during class time and must be sub-
mitted electronically through Canvas.
– It will cover Sessions 1 through 4.
– Practice exam materials will be released on Canvas one week prior to the exam.
• Final Exam:
– Duration: 3 hours.
– Open book, open notes.
– The final exam will be conducted remotely and must be submitted electroni-
cally through Canvas. Different from the midterm, we will make the exam available
on Canvas between the beginning and the end of the final exam week, and you will
be able to download and work on the exam in any 3-hour window during that week.
– Comprehensive: it will over all of the material in the course.
– Practice exam materials will be released on Canvas one week prior to the exam.
Attending other sections:
Please attend the section in which you are enrolled. However, on a limited basis you may
move between sections as needed, but subject to the following:
• Students enrolled in the section they are attending have seating priority.
• Assignments must be turned in at the first class session attended by any of
your group members.
Special accommodation:
The University of Chicago is committed to ensuring the full participation of all students in
its programs. If you have a documented disability (or think you may have a disability) and,
as a result, need a reasonable accommodation to participate in class, complete course require-
ments, or benefit from the University’s programs or services, you are encouraged to contact
Student Disability Services as soon as possible. To receive a reasonable accommodation, you
must be appropriately registered with Student Disability Services. Please contact the office
at 773-702- 6000/TTY 773-795-1186 or disabilities@uchicago.edu, or visit the website at
disabilities.uchicago.edu. Student Disability Services is located at 5501 S. Ellis Avenue.
If you have an approved accommodation from Student Disability Services that you plan to use
in this course, please contact Academic Services (AcademicServices@lists.chicagobooth.edu)
as soon as possible. Academic Services will provide support to you and your instructor and
coordinate the details of your accommodations on your behalf.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Diversity and Inclusion:
The University of Chicago believes that a culture of rigorous inquiry demands an environment
where diverse perspectives, experiences, individuals, and ideas inform intellectual exchange
and engagement. I concur with that commitment and expect to maintain a productive learn-
ing environment based upon open communication, mutual respect, and non-discrimination.
Any suggestions as to how to further such a positive and open environment in this class will
be appreciated and given serious consideration.
How to do well in the class:
• Expect to spend between 4-6 hours per week on the course outside of class.
• Come prepared to each class.
• Read the solutions to the concept checks.
• Take the practice exams.
• Talk to me or the TA if you have questions.
Honor Code:
• Students are required to adhere to the standards of conduct in the Booth Honor Code and
the Chicago Booth Standards of Scholarship. The Booth Honor Code requires students
to sign the following pledge on all work, “I pledge my honor that I have not violated the
Chicago Booth Honor Code during this assignment/examination.”
• You are not permitted to review/discuss case write-ups or concept check solutions from
other sections, past quarters/instructors of BUS 40000, or the Internet while preparing
the assignments.
Disclaimer: The information contained in course documents (syllabus, class notes, class slides,
handouts, etc.) is confidential, privileged and only for the information of the intended recipi-
ent and may not be used, published or redistributed without the prior written consent of the
Booth faculty member(s) teaching the course.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Syllabus, BUS 40000
Linwei Xin, Winter 2025
Notes:
• MBPF stands for Optional text “Managing Business Process Flows.”
• All readings can be found on Canvas and are labeled with (Canvas).
• All assignments can be found on Canvas.
Session 1: January 9/11 – Introduction to Operations Management
Objective: To characterize the operational capabilities of business processes and their link to
corporate strategy. Understand the power and value of viewing businesses as process flows.
Topics:
• Strategic operational capabilities.
• Introduction to business process flows.
• Little’s Law.
• Basic capacity analysis.
Required Reading:
• “Deep Change” (Canvas).
• “Varsity Subs” Caselet (Canvas).
Optional Reading:
• MBPF: Chapters 1, 2 and 3.
• “Basic Concepts in Probability,” optional review if needed (Canvas).
Session 2: January 16/18 – Capacity Management
Objective: To develop a fundamental understanding of what determines the capacity of an
operation, the impact it has on profits, and how to alter it for operational improvement.
Topics:
• Capacity analysis.
• Product mix decisions.
• Linear programming.
Required Reading:
• “McD’s Service Stalls at Drive-Thru” (Canvas).
• “National Cranberry Cooperative” Case (Canvas).
• “Merton Truck Company” Case (Canvas).
Optional Reading:
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
• MBPF: Chapter 5.
Prepare with your group and submit (posted on Canvas):
• Concept Check #1.
• National Cranberry Cooperative.
• Merton Truck Company (note: do not do the “Problems” on page 4 of the case).
Session 3: January 23/25 – Process and Financial Flow Analysis
Objective: To examine process improvement and the linkage between financial and process
flows.
Topics:
• Profit drivers and the Operations Quadrangle.
• Reengineering.
• Critical paths and cycle time management.
Required Reading:
• “Reengineering the Corporation” (Canvas). Please focus in particular on the section
concerning “IBM Credit.” We will discuss this case in class.
• “Mobismile Bikesharing” Case (Canvas).
• Linear Programming Note: Merton (Canvas).
Optional Reading:
• MBPF: Chapter 4.
Prepare with your group and submit (posted on Canvas):
• Concept Check #2.
• Mobismile Bikesharing.
Session 4: January 30/ February 1 – Capacity Management Under Uncertainty
Objective: To examine how enterprises manage capacity in business processes that are subject
to uncertainty in supply and demand.
Topics:
• Service operations, Call center management.
• Queueing phenomena: balking, reneging.
• Levers for improving queueing costs.
• M/M/1 and G/G/1 queueing models.
Required Reading:
• “The Psychology of Waiting Lines” (Canvas).
• “Queue Management: Elimination, Expectation, and Enhancement” (Canvas).
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Optional Reading:
• MBPF: Chapter 8.
Prepare with your group and submit (posted on Canvas):
• Concept Check #3.
• Sof-Optics (Caselet).
Review session of all materials covered up to this point will take place on February 1
Saturday, 5:00-7:00 PM, Zoom Meeting
Session 5: February 6/8 - Midterm Exam
• Open book, open notes.
• The midterm will be conducted remotely during class time and must be submitted
electronically through Canvas.
• If you cannot take the midterm exam, or counting it hurts your final course grade, I
will shift all the weight onto your final exam. (Note: graduating students must take the
midterm to obtain provisional grades.)
• Concept Check #4 is optional. You do not need to turn in this assignment. This
assignment is posted to help you with your exam preparation.
Session 6: February 13/15 – Foundations of Inventory Management
Objective: To introduce the fundamental theory and basic concepts of inventory management
that are encountered in practice.
Topics:
• Introduction to forecasting.
• Newsvendor problem.
• Economic order quantity.
• Safety stock, cycle stock: (Q, R)-policies.
Required Reading:
• “L. L. Bean” Case (Canvas).
Optional Reading:
• MBPF: Chapter 7.
Prepare with your group and submit (posted on Canvas):
• Inventory Processes.
• L.L. Bean.
Deadline to register Littlefield teams is Monday, February 17 at 12:00 PM.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
Session 7: February 20/22 – Beer Game Simulation
Objective: To explore how incentive problems can degrade supply chain performance. To
understand the bullwhip effect in supply chains and how firms can counteract it.
Topics:
• In-class simulation (bring your laptop).
• Bullwhip effect and supply chain coordination.
Prepare with your group and submit (posted on Canvas):
• Concept Check #5.
Littlefield simulation begins: February 24 (Monday) at 12:00 PM. Between Febru-
ary 17 and February 24 is an opportune time to prepare a strategy which you will
implement starting on February 24 at 12:00 PM.
Session 8: February 27/March 1 – E-distribution and Risk Pooling
Objective: To explore internet-based business models and their operational processes, includ-
ing warehousing and distribution. To explore various ways of pooling inventories to hedge
risk and improve inventory performance.
Topics:
• Last-mile e-commerce.
• Analysis of new business models.
• Fundamentals of delivery businesses.
• Pooling and postponement.
Required Reading:
• “Webvan” Case (Canvas).
• “JD.com: the unmanned warehouse project” Case (Canvas).
• “Mass Customization at Hewlett-Packard” (Canvas).
• “JungleBooks.com” Case (Canvas).
Prepare with your group and submit (posted on Canvas):
• Webvan.
• JungleBooks.com.
Littlefield simulation ends on March 3 at 12:00 PM.
Session 9: March 6/8 – Littlefield Debrief and Course Wrap-up
Objective: Littlefield debrief. Course summary and future directions.
Topics:
• Littlefield discussion and lessons.
• Apply operations management in a real business.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 11/12/2024
• Course summary.
Required Reading:
• “Rebecca Chess Club” Case (Canvas).
Prepare with your group and submit:
• Littlefield Technologies writeup.
• Rebecca Chess Club.
Review session will take place on March 8 Saturday, 5:00-7:00 PM, Zoom Meeting.
Session 10: Final Exam Week (noon on Sunday March 9 - noon on Sunday March
16)
• Open book, open notes.
• The final exam will be conducted remotely and must be submitted electronically
through Canvas. Different from the midterm, we will make the exam available on Canvas
between the beginning and the end of the final exam week, and you will be able to
download and work on the exam in any 3-hour window during that week.
• The exam is comprehensive, including all materials covered in the course.
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The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
