Mis 373 Exam 1 Study Guide

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Chapter 1
Three basic functions of business organizations: Finance, Operations, and Marketing. Operations management: The management of systems or processes that create goods and/or provide services. Supply chain: A sequence of activities and organizations involved in producing and delivering a good or service. Value-added: The difference between the cost of inputs and the value or price of outputs. Product package: A combination of goods and services.

Process: A process consists of one or more actions that transform inputs into outputs. Three categories of business processes:
1) Upper-management processes – govern the operation of the entire organization (organizational strategy) 2) Operational processes – the core processes that make up the value stream (production, marketing, sales) 3) Supporting processes – support the core processes (accounting, HR, and IT) Process Variation

1) The variety of goods /services being offered
2) Structural variation in demand (trends, seasonality, generally predictable) 3) Random variation (cannot generally be influenced by managers) 4) Assignable variation (caused by defective inputs, can be reduced or eliminated) Lead time: the time between ordering a good/service and receiving it. Model: An abstraction of reality; a simplified representation of something. * Physical models – look like their real-life counterparts * Schematic models – more abstract than their physical counterparts * Mathematical models – are the most abstract and look nothing like their physical counterparts System: A set of interrelated parts that must work together. Pareto phenomenon: A few factors account for a high percentage of the occurrence of some event(s). Six Sigma: A process for reducing costs, improving quality, and increasing customer satisfaction. Lean system: System that uses minimal amounts of resources to produce a high volume of high-quality goods. Chapter 2

Competitiveness: How effectively an...
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