Op Exam Review

Topics: Strategic management, Product management, Capacity utilization Pages: 8 (2044 words) Published: May 1, 2013
Chapter 1

1.Operation Management: administration of business practices to create the highest level of efficiency possible within an organization a.Concerned with converting materials and labor into goods/services as efficiently as possible to maximize profit of organization 2.Why Study OM?

a.One of he three major functions -> marketing/finance/operations b.Want & Need to know how goods/services are produced
c.Understand what operations managers do
d.Costly part of organization
3.Characteristics of Service
a.Intangible/produced & consumed at same time/often unique/high customer interaction/inconsistent product definition 4.Goods vs. Services
a.Can be resold -> reselling unusual
b.Can be inventoried -> difficult to inventory
c.Some aspects of quality measureable -> difficult to measure d.Selling is distinct from production -> selling is part of services e.Product is transportable -> provide, cannot be transportable f.Site of facility important for cost -> site is important for customer contact g.Often easy to automate -> difficult to automate

h.Revenue generated from tangible product -> revenue generated from intangible product i.Maintain their value for a longer time -> value declines quickly j.Produced by manufacturers -> provided by service oriented organizations 5.Measurement Problems

a.Quality may change while the quantity of inputs/outputs remains constant b.External elements may cause an increase/decrease in productivity c.Precise units of measure may be lacking
6.Productivity Variables
a.Labor: contributes to 10% of annual increase
b.Capital: continues to 32% of annual increase
c.Management: contributes about 52% of annual increase

Chapter 2

1.Defining Global Operations
a.International Business: engages in cross-border transactions b.Multinational Corporation: has extensive involvement in international business, owning or controlling facilities in more than one country c.Global company: integrates operations from different countries and views world as a single marketplace d.Transnational Company: seeks to combine the benefits of global-scale efficiencies with the benefits of local responsiveness 2.Reasons to Globalize Operations

a.Tangible -> Intangible
i.Reduces costs (labor/taxes/tariffs)
ii.Improve the supply chain
iii.Provide better goods/services
iv.Attract new markets
v.Learn to improve operations
vi.Attract/retain global talent
a.Definition: Where you are going
i.Purpose for being
ii.Provides boundaries and focus
iii.Answers: what do we provide society
b.Strategy: how you are going to get there, an action plan
4.Strategies for Competitive Advantage
a.Differentiation: uniqueness can go beyond both physical characteristics/service attributes to encompass everything that impacts customer’s perception of value b.Cost Leadership: Provide maximum value as perceived by customer; does not imply low value/low quality c.Quick Response: Flexibility/Reliability/Timeliness; requires institutionalization within the firm of the ability to respond d.Competing regardless of the basis: requires the institutionalization within the firm of the ability to change/adapt 5.Strategies/Issues during Production Life

i.Company strategy/issues: period to increase market share, R&D engineering is critical ii.OM strategy/issues: product design/development critical, frequent product/process design changes, overcapacity, short production runs, high-skilled labor contents, high production cost, limited number of models, utmost attention to quality, quick elimination of market-revealed design defects b.Growth

i.Company strategies/issues: practical to change prices or quality image, marketing is critical, strengthen niche ii.OM strategy/issue: forecasting is critical, product/process reliability, competitive product improvements/options, shift toward product oriented, enhance distribution c.Maturity

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