Project Flip: A Project Management Case/Exercise Experience

 C 2010, Decision Sciences Institute Decision Sciences Journal of Innovative Education C 2010, Decision Sciences Institute Volume 8 Number 1 Journal compilation  January 2010 Printed in the U.S.A.

TEACHING BRIEF

Project Flip: A Project Management Case/Exercise Experience Janelle Heineke† Boston University School of Management, 595 Commonwealth Ave., Boston, MA 02215, e-mail: [email protected]

Larry Meile Boston College Carroll School of Management, 140 Commonwealth Ave., Chestnut Hill, MA 02467, e-mail: [email protected]

Linda Boardman Liu and Jane Davies Boston University School of Management, 595 Commonwealth Ave., Boston, MA 02215, e-mail: [email protected], [email protected]

INTRODUCTION Students often struggle with the concepts of uncertainty and variability. In project management, students need to know how to identify, understand, and, when possible, manage project risk. Textbooks can describe the effects of variability in projects and cases can describe static situations where decisions have to be made without perfect information. But neither can effectively convey how uncertainties in projects unfold over time and how much project performance can be affected by the combinations of decisions made under conditions of uncertainty. We created this interactive exercise in response to student course feedback and our own observation that project management students needed to actually experience uncertainty in order to connect the science of project management (planning, network diagrams) with the behavioral and strategic decisions that result in project success. We wanted to identify a project focus that students could readily relate to. Many cases and examples we found were technical (IS/IT, product development, event planning, or organizational change) and the project context often distracted students from the fundamental principles of project management that we wanted them to learn.

CASE SUMMARY A young couple, Kim and Carl Elder, decide to purchase a house and flip it: make improvements and sell it with the goal of making a profit. Aided by Carl’s cousin, Pat, who acts as the general contractor, they work through a set of 68 activities. † Corresponding

author.

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Some work must be outsourced (wiring, plumbing, carpet installation) and some can be done either by the owners and Pat or contracted out. The couple’s goal is to complete the project quickly (to minimize ownership expenses) and at lowest possible cost so the potential profit is maximized. (A version without figures can be found in the Appendix.)

CASE CONCEPTS Project Flip provides an opportunity to discuss several topics related to project management. 1. Project selection: Although the case has Kim and Carl flipping one house, it opens the door for a discussion of the criteria that could be applied to selecting a house to flip, the risks and rewards related to different types of flips, etc. This gets at the larger question of what projects to take on and how to match the project to the organization’s goals and capabilities. 2. Task identification and time estimates: Tasks are identified in the case and time estimates are provided. Kim, Carl, and Pat have some experience with home improvement, so they can likely determine tasks and estimate times reasonably well, but there is likely to be variation. 3. Precedence relationships: Precedence relationships are defined in the case, but students must recognize that these relationships could change, depending on the assumptions made. For example, if outside painters are hired, it probably makes sense to have all painting tasks done together because it would likely be less costly to hire painters to paint several rooms at once rather than to come on different occasions to paint each single room. Changing the precedence relationships can significantly affect the project timeline. 4. Use of project management software: With 68 activities, the project network is too large to manually develop and update. The case can be a vehicle for having students learn and use Microsoft Project or the instructor can provide the MS Project files, emphasizing or deemphasizing the use of the software according to the objectives of the course. 5. Uncertainty and risk: Uncertainty and risk are introduced through drawing cards and rolling dice. Students can discuss the particular risks for this project but should also be encouraged to discuss how risk management in a large project-oriented organization would be different.

STUDENT POPULATION This exercise was developed in summer 2006 and has been conducted seven times with both MBA and undergraduate students. One hundred twenty-nine MBA students at one university and 72 MBA and undergraduate students at a second university have completed the exercise resulting in a total population of 201. The exercise has become a highlight of the courses in both schools.

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OBJECTIVES The primary objective of this exercise is to have students experience uncertainty and its effects, both positive and negative, in managing a project to completion. The exercise is conducted in teams and each team is able to see the final results of the other teams, so they can appreciate not only how risks affected their own team’s performance, but how outcomes are distributed based on each team’s initial project planning choices as well as the particular scenario each team experienced. The exercise also familiarizes students with the use of project management software (MS Project) as a decision-support tool.

USING PROJECT FLIP Project Flip is structured as a case-based, in-class, experiential exercise. The case “sets the scene” and outlines the objectives of a young house-flipping couple. Finally, it integrates all of the management aspects of project management: strategic decision making, financial planning and control, risk management, and behavioral issues. Before running the main exercise, we offer a brief hands-on software tutorial that prepares students to use the basic tools in project management software. While the use of project management software is not the real focus of the exercise, students have told us that along with learning how to manage projects, they wanted to develop some basic expertise in using real-world project management tools. Because Project Flip is conducted in class, the professor is able to coach and guide the teams in the use of the software. The exercise takes place about a third of the way into the semester. Class discussions prior to Project Flip cover project set-up and the use of work breakdown structures, task dependencies, network diagrams, Gantt charts, milestones, and resource management. We encourage, but do not require, students to use MS Project to prepare course assignments. Materials for the exercise include the case, a MS Project file, an Excel file with a template that helps students track project finances, a deck of risk cards, and a die. To prepare, students read the case, examine the MS Project file and financial spreadsheet, and become familiar with the project tasks and decisions. In class, in small groups of three to four students, the teams construct the project network and Gantt chart and evaluate resource slack and the critical path. The teams then make decisions related to risk mitigation and resource allocation, such as hiring an inspector or outsourcing certain activities. Once the decisions are recorded and displayed for all teams to see, each team is given a die and a stack of risk cards that introduce variability into the project (termites, weather delays, craftsmanship, and so on). Students draw risk cards in order, roll a die and, according to the number obtained, follow the instructions on the card. As luck is with or against the team, the project duration and costs increase or decrease. In this way, students experience the realistic effects of both controllable and uncontrollable variability on a well-planned project. The exercise debrief includes a comparison of team decisions, project durations, and performance as measured by net income or loss. The debrief focuses on

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the types of risks teams experienced, if they were controllable, and how they were (or could possibly be) managed.

EFFECTIVENESS Students have responded very enthusiastically to Project Flip. The exercise provides an integrated experience much like a simulation does but using tools they are likely to use in practice (MS Project and Excel). Students can relate to the house-flipping project (many have told us that they were thinking about flipping houses themselves!), so there is little or no ramp-up for students to understand the project goal and tasks. The exercise has become a highlight of the project management course at two universities. We added the MS Project tutorial after running the course for the first time, after students said they would find some guidance on use of the software to be helpful. Overall, student comments have been very positive. 1. “To improve, I’d recommend focusing on more simulations – the Project Flip exercise was excellent and really gave the concepts ‘life’.” 2. “Project Flip and other class exercises were very helpful and very fun. . .” 3. “I really enjoyed this exercise. I think it was a great way to show how project management is affected by outside forces and how a project manager will have to make decisions as to what to do about it regarding resources and planning.” 4. “This was a fun and interactive exercise that really helped solidify the goals of project management.” 5. It helped having an activity that brought together a lot of the concepts we have been learning in class. The subject was also interesting. It was a nice change in pace.” 6. “It is often difficult to picture concepts in action, so it was nice to get a feel for the software, the decision making process, etc. Plus I thought it was fun! Even though some of the variability was due to chance, I think that’s pretty much true of life, so it was appropriate to have a combination of variables that could be controlled as well as unanticipated.” It is difficult to accurately assess whether students actually learn more after engaging in this exercise, but it is our impression that Project Flip helps them to understand how uncertainty affects project outcomes and the comments above support that impression. We believe that we can “see the light bulbs coming on” as students experience the uncertainty as it unfolds and when they see the array of outcomes experienced by other teams in the class. And the lessons show up throughout the semester. Students often refer to the exercise when analyzing subsequent cases. For example, when discussing the BAE Denver International Airport case, students have said something like, “When we did Project Flip we had to manage some risks and be prepared to deal with those we couldn’t control. Why didn’t the team at BAE do that?”

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TRANSFERABILITY Project Flip has been used successfully in two business education programs with both undergraduates and MBA students, and in both academic-year and summer terms by four different instructors, three of whom were not involved in the development of the exercise. Students—from engineers to HR managers—can relate to the project topic, in part because of the television series that focuses on house flipping. The exercise can be readily fit into an existing project management course. While probably too ambitious for a survey operations management course, Flip could also serve as a standalone project management exercise in a more comprehensive operations management or product development course. In addition to the case itself, the authors have developed an extensive teaching note and are happy to share it and the associated Excel, PowerPoint (for the cards), and MS Project files. To request this material, e-mail either [email protected] or [email protected].

APPENDIX: PROJECT FLIP Kim and Carl Elder were ignoring the coffee on the table in the kitchen of their Framingham, Massachusetts, condominium and paying much more attention to their discussion. Kim said, “I think we can really make some money on this! We’ve had some experience with do-it-yourself work and we have fun doing it, too.” “You may be right, Kim, but I’m not as sure as you are that we can make money. We both have real jobs and both jobs are demanding. The housing market is unpredictable, too. We’ve never flipped a house before; it can’t be a sure thing – and I just don’t know if we can get a good handle on all the risks.” “Okay, but people do flip houses successfully and I don’t see why we can’t, too. We could make as much money in a couple of months as one of us does in a year, Carl! Flip a couple more and we could have enough to buy our dream house outright – and we might like it enough to do it full time. We’d be self-employed! Just think, no more bosses!” Kim was so excited she did not see Carl roll his eyes. “One step at a time! First let’s do some homework. There must be some information on the Internet about house flipping that’ll help us understand the risks. We should probably check to see how much we can afford to spend up front, too, before we start getting too serious. Meanwhile, let’s go see some fixer-uppers – and see if we think we can do the work.”

House Flipping House flipping is buying a house, improving it and selling it for a profit. “Improving” can mean simple cosmetic work such as cleaning, painting, and recarpeting or much more complicated renovations such as replacing cabinetry and fixtures in kitchens and bathrooms, installing new flooring, or even adding on additional space. To make a profit, flippers must sell the house for more than the purchase price plus any costs incurred in the purchase, ownership, improvement, and

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sale. Purchase expenses include the price of inspection and closing and mortgage application fees; ownership expenses include mortgage payments, insurance applications and premiums, property taxes, and utilities; improvement costs include material and labor; selling costs include realtor fees (if applicable), attorney fees and advertising. Flippers also need to consider their opportunity costs: how else might they have invested their money and time? They also need to consider taxes. If you flip houses as your sole occupation (or as a major portion of your income) you must pay self-employment tax, a social security and Medicare tax primarily for individuals who work for themselves. The self-employment tax rate is 15.3% of your profits. If you are working full-time, these taxes are withheld for you and you may not need to pay any additional taxes for flipping. Whether you flip full- or part-time, you will be responsible for capital gains tax. If you keep the property for less than a year, your tax rate is the usual capital gains rate of 35%. If you keep the property for a year or more, you can take advantage of the low 15% capital-gains tax rate. House flipping has been around a long time but in the last decade its reputation has been tarnished by accusations that flipping has added to overinflated housing markets. Flippers have also been accused of taking advantage of na¨ıve sellers, who do not know the value of the property they are selling, and unsophisticated buyers, who cannot tell the difference between cosmetic improvements and substantive ones. For example, buyers may not think that a newly painted ceiling may cover stains from a leaky roof, that painted exposed basement beams may cover signs of structural damage due to fire, that new light fixtures may be attracting their attention from old and unsafe wiring or that new basement paneling may be covering water stains from flooding. While any house sellers can be guilty of misleading prospective buyers, flippers have particular incentive to mislead because they bought the house solely as an investment, not as a home to live in.

The Boston Area Housing Market The Boston Area had experienced a booming housing market that peaked in the 1980s and continued moderately through the 1990s but began to slow in the early 2000s. The Boston Globe (December 13, 2005) reported that “Statewide, 38,418 houses had price reductions between January 1 and November 24, 2005 or 22% more than the number of reductions during the same period in 2004. But the number of price reductions on homes between $500,000 and $1 million increased by 36%.” The Globe also reported that housing prices in Western Massachusetts rose faster in 2005 than in the Boston area, probably at least in part because Bostonians moved farther from the city to find lower-priced housing (December 29, 2005). Natick, a western suburb 20 minutes from Boston, had been an attractive choice for home buyers who wanted to be close enough to commute in to Boston but far enough away from the city to enjoy larger lots, convenient transportation (the commuter rail had two stops in Natick), a strong school system, and a suburban feel. First Step: Research Kim started her research on the Internet. She discovered that in the summer of 2006, there were more homes than usual on the market in Natick (Exhibit 1) and

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Exhibit 1: The housing market in Natick, MA. In July 2006, there were 178 single-family homes for sale in Natick, MA in a broad range of prices.

Source: Mapquest.com Location characteristics: Shopping, transportation, strong community interest in schools, weekly farmers markets in Natick Center, community activities during the summer at the Common, newly renovated down-town area: new town hall, fire station, police department, library—Natick is a New England community that has a lot to be proud of! Source: Market Conditions for Natick, Massachusetts; reported by Pineapple RealEstate, Inc., REALTOR. As of July 18, 2006. http://realtytimes.com/rtmcrcond/Massachusetts∼Natick∼deborahperro

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housing prices covered a remarkable range. Sales had slowed somewhat, but houses were still moving if they were priced well. She learned that buying a fixer-upper made sense if the basic structure of the house was sound (solid foundation, sound frame, intact roof) and if plumbing and wiring did not need complete replacement. The risk of flipping could be reduced by buying a house that needed only cosmetic work (such as painting) but the returns might be lower than if major renovations were managed successfully. Carl, meanwhile, checked on their ability to get a mortgage. He discovered that with their credit rating and their incomes in their regular jobs, they could qualify for a 100% mortgage for up to $750,000 at 6.5% interest. They could get a 30-year term, which would keep payments low; there was no advantage to paying more since they planned to resell any house they bought before they got to the point of actually paying down principal.

Second Step: Search After spending a couple of weeks on research, Kim’s enthusiasm was higher than ever. She was convinced that she and Carl could profit on a flip—and she managed to convince Carl, too. So on a Saturday in mid-August they started looking at real estate. They checked the local listings and talked about the flip as they drove. Kim said, I’m glad we narrowed our search to Natick. It’s a good town for trying a flip because it’s close to Boston and a desirable town on its own merits. What we need is to find some houses in the Natick area that need the kind of work we can do. Let’s start looking in the $500,000 range – right in the middle of Natick’s housing market range and attractive to buyers who have some spending power.

Carl answered, “We need to find a fixer-upper that’s in basically good shape structurally but that’s likely to scare off prospective buyers because it’s in poor cosmetic shape. We can handle cleaning, wall repair and prep for finish work, painting and basic landscaping.” Kim replied, “Right, but we’ll have to contract out for plumbing, wiring, cabinetry and kitchen and bathroom fixture replacement. We’re really lucky Pat’s in town.” Carl’s cousin Pat had recently moved to the area and was trying to get established as a contractor. He had offered to work with Carl and Kim on their first flip so he would have some income while he worked on getting established. Kim continued, Of course, there are other young people like us who are willing to roll up their sleeves and do scrubbing and painting, but we can go a step beyond that – kitchen and bathroom renovation, for example – so we can probably find something that won’t be as broadly appealing. A few listings in the paper might work. Here’s one. This is a three-bedroom split entry on Hollis Street.

The Hollis Street house, they discovered, was built in 1980 and had been on the market for 2 months. It needed just cosmetic work. Hollis was a fairly busy street

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without much neighborhood feel, but was close to Route 9, which could appeal to commuters. The asking price was $520,000. Other houses nearby had sold in about the same range. After seeing the Hollis Street House, Carl and Kim drove to a listing on Lindsay Drive. They learned that it had come on the market just 2 days ago. It was a smallish 1950s ranch in a comfortable family neighborhood of small lots and quiet streets. The house had two bedrooms and two full baths. The rest of the neighborhood was mostly three-bedroom homes, some colonials, some ranches. After a walk-through, Kim said, This house is a mess! The owners have been there for 22 years and must have never cleaned; carpets are dirty, floors need refinishing and the kitchen and bathrooms are really outdated. The yard is off-putting, too. Lots of junk, no grass. The structure seems okay, though. New roof about 10 years ago and the basement is dry. Asking price is $490,000. Other houses in the neighborhood have sold for up to $620,000.

Carl said, “Well, let’s keep looking. There are a few more listings that might make sense.” After looking at five houses Carl was exhausted. “I’m done! Let’s go home and think about this some more.”

The Decision On the drive home, Kim and Carl discussed what they had seen. Carl said, “I didn’t see anything we can’t handle, especially if we have Pat helping us, but . . . I think we ought to take a little more time.” Kim replied, I know you do, but at some point we’ll have to jump in. Things are going smoothly for both of us at work and it will be much more pleasant to work on a house in the fall than in either the winter or the summer. I think we should just do it. The first two of the five houses we saw are possibilities; the rest were overpriced. The Hollis Street house would be easy work – just painting, really, but I don’t think we’d be able to sell it for much more than we’d buy it for. The Lindsay Drive house will scare off almost anybody. It smells! It’s in a neighborhood of bigger houses, which should make it more desirable. The yard is junky now, but a few days of digging and we can have it looking really good.

The conversation continued through dinner and started up again the next morning. By Monday they had decided to put in an offer for the house on Lindsay Drive. They liked the idea of a house surrounded by houses of higher value in a family neighborhood. They agreed that the entire house would need to be repainted inside; outside was fine. The kitchen and bathrooms would have to be gutted and to make the house seem bigger they would remove a wall between the kitchen and living room to open up the space and create a great room (Exhibit 2). Carpets would have to be replaced in the bedrooms, bathroom floors would have to be tiled and in the rest of the house they would install hardwood floors. They also thought some basic landscaping would be a good idea: removing the old crumbled concrete sidewalk

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Exhibit 2: Lindsay drive house floor plan.

and replacing it with a brick path, digging some foundation beds, and laying sod in the front yard (Exhibit 3). They took one more look at the house with Pat along. Pat estimated that kitchen and bathroom cabinetry and fixtures, kitchen appliances, floor tiles, paint and lumber

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Task ID

Task

Remove debris/items left in house Gut kitchen Gut master bath Gut second bath Remove carpets Remove wall between kitchen & family room Rough-in electrical, master bath Rough in plumbing, master bath Install tub, master bath Install tile floor, master bath Finish carpentry, master bath Prep master bath walls Install vanity, master bath Prime master bath walls Paint master bath walls and trim Install toilet, master bath Install master bath sinks Install towel racks, etc., master bath Install tub, second bath Install tile floor, second bath Install vanity, second bath Prep second bath walls Paint second bath walls and trim Install toilet, second bath Install second bath sink Install towel racks, etc., second bath Strip wallpaper from master BR Prep master BR walls Prime master BR walls Paint master BR trim (2 coats) Paint master BR walls (2 coats) Prep second BR walls Prime second BR walls Paint second BR trim (2 coats) Paint second BR walls (2 coats)

Exhibit 3: Project Tasks. Time 1 day 3 days 2 days 2 days 1 day 1 day 2 days 2 days .5 days .5 days 1 day 1 day .5 days 1 day 1 day .25 days 1 day 0.25 days .5 days .5 days .5 days 1 day 1 day .25 days 1 day .25 days 2 days 1 day .5 days 1 day 1 day 1 day .5 days 1 day 1 day

none 1 1 1 1 2,5 3 3 8 9 7,10 11 12 13 14 15 13 15 4 19 20 21 22 23 21 23 1 27 28 29 30 1 32 33 34

Immediate Predecessor Owners Pat Pat Pat Owners Pat Electrician Plumber Plumber Pat Pat Owners Pat Owners Owners Pat Pat Owners Plumber Pat Pat Owners Owners Pat Pat Owners Owners Owners Owners Owners Owners Owners Owners Owners Owners

Person Responsible

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36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68

Task ID

Task

Carpet bedrooms (2) Rough-in electrical, great room Rough in plumbing, kitchen Install hardwood floors (great room, halls, DR) Finish carpentry, great room Finish hardwood floors Install kitchen cabinets Install kitchen sink/disposal Prep great room walls Prime great room walls Paint great room trim Paint great room walls Install kitchen appliances Prep DR walls Prime DR walls Paint DR trim Paint DR walls Prep hall walls Prime hall Paint hall trim Paint hall walls Install light fixtures (throughout) Remove and replace front door Remove sidewalk Lay sidewalk (brick) Dig/plant flower beds Prep yard for sod Sod yard Find furniture rental agency Accept delivery, arrange rented furniture Contract with realtor Hold open house Close sale

Exhibit 3: (Continued) 1 day 2 days 1 day 2 days 4 days 3 days 2 days 1 day 2 days 1 day 2 days 2 days 1 day 1 day .5 days 1 day 1 day 1 day .5 days 2 days 1 day 1 day 2 days 1 day 3 days 2 days 2 days 1 day .5 days 1 day 1 day 3 days 1 day

Time 31,35 6 6 38 37,38 39,40 41 42 40 44 45 46 47 1 49 50 51 1 53 54 55 15,23,48,52 1 1 59 60 61 62 none 36,47,52,58,64 65 16,17,18, 24,25,26,31,35,43, 56, 57,63,66 67

Immediate Predecessor

Carpet installer Electrician Plumber Flooring contractor Pat Flooring contractor Pat Pat Owners Owners Owners Owners Pat Owners Owners Owners Owners Owners Owners Owners Owners Electrician Pat Owners Owners Owners Owners Owners Owners Owners Owners Owners Owners

Person Responsible

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Exhibit 4: Project Financials Worksheet. Selling Price Purchase Expenses Purchase price Price adjustment (-$2000 if additional inspection) Inspection ($500 if inspector hired) Closing Ownership Expenses Mortgage application fee Homeowner’s insurance Property taxes ($10.17/$1000 x weeks owned/52) Utilities ($40/week owned) Improvement Expenses Material, initial budget Material, adjustment Second bathroom ($500 if mold) Termites, subflooring not required ($1000) Termites, subflooring required ($2000) Labor, initial budget: Pat @$1000/wk Contractors Carpet Hardwood flooring Plumber: 4 8-hour days @ $50/hour Electrician: 5 8-hour days @ $60/hour Painters @ $250/room Sidewalk removal: $500 Sidewalk replacement: $1000 Selling Expenses Realtor fee @ 6% of sale price Attorney Fee Advertising ($25/week on market) Closing costs Total Expenses Profit before taxes Taxes @35% Profit after taxes

475,000

1,000 250

15,000

1,000 3,000 1,600 2,400

– 1,000 1,000

would come to about $15,000, Pat thought it would be fair to be paid $1,000 per week to work on the house essentially full-time and Kim and Carl thought that was reasonable. They would have to contract for the carpets (they estimated about $1,000 for the two bedrooms), hardwood flooring ($3,000 installed), plumbing ($50/hour), rough electrical ($60/hour). Kim and Carl would do basic cleanout, wall prep and painting and landscaping (Exhibit 4). Pat would take care of removing the wall, finish carpentry, cabinetry in kitchen (Kim and Carl would help with installation of cabinets) and bathrooms and tiling the bathroom floors. Pat would also remove the sidewalk and lay the new brick walkway. They all agreed that timing was important, so they would consider hiring help for some of the work if they thought it would help them get done sooner.

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With input from Pat, Kim and Carl agreed to make a bid of $460,000. Three hours later the seller’s realtor called with a counteroffer of $475,000. Carl voiced one more concern, I hope we’re going about this the right way. Maybe we should have thought about hiring a buyer’s broker. We’d have to pay a fee, but the broker might be able to point out some issues we haven’t considered. I did some Internet research on this. We’d have to pay a flat fee – usually it’s 3% of what you expect to pay for the house. Then you also pay $100 for every $1,000 the broker saves you. So the broker has an incentive to make it as cheap as possible for you.

Kim and Carl talked it over for awhile and decided that the extra cost was not worth it. They signed the Purchase and Sale agreement, stipulating that the house would need to pass inspection. Carl said, “Kim, I think we should invest in a more thorough inspection. I did some checking around and we’d have to pay about $500 for someone who would really check out the details, but if something structural or serious is wrong, we’d be able to renegotiate the price so we could cover the additional repair costs.” Kim replied, “Do you really think that’s necessary? We’ve got the basic inspection; why pay more when we might not get any more information?” “You’re right, Kim; it’s not necessary. But I think it might turn out to be a good idea . . .” Janelle Heineke is a professor and chair of the Operations and Technology. Management Department at Boston University (BU) School of Management and the Faculty Director of BU’s Center for Excellence in Teaching. Her research interests are service and quality management. She has published in a variety of journals, is the coauthor of two textbooks and three other books, and has contributed chapters and cases to several other books. She is an associate editor for the Journal of Operations. Management, Decision Sciences, Quality Management Journal, and Operations Management Research. She is on the editorial review board for the. Production Operations Management Journal and is a regular reviewer for several other journals. She is a fellow of the Decision Sciences Institute (DSI) and has served in several positions, including as treasurer, vice president, and a member of the executive committee. Larry Meile is an associate professor at the Carroll School at Boston College, where he teaches operations management, project management, and quantitative methods. His areas of research interest include innovative classroom education techniques and the use of information technology to support operations. He has published in the International Journal of Operations and Production Management, Communications of the AIS, International Journal of Service Industry Management, Case Research Journal, and Interfaces and coauthored a book, Games and Exercises for Operations Management, with Janelle Heineke. He has contributed material to several textbooks and is a member of DSI. Linda Boardman Liu is an assistant professor of operations management at Simmons College School of Management and a doctoral candidate at Boston

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University School of Management. She has 20 years of experience in service operations in the areas of process management, performance management, and operations planning and control. Jane Davies is an assistant professor of operations management at the Judge Business School at the University of Cambridge. She received a DBA from Boston University and an MBA from Babson College. Her current research interests include the value of flexibility and the interface of operations and finance. Prior to academia she worked on operations management projects for firms in the government, finance, and telecommunication sectors. She is a member of DSI, INFORMS, and POMS.