Chapter 1 - Operations Management

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1.Why should one study operations management?
Operations Management is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. •Operations Management is one of the three major functions of any organization, and it is generally related to all the other business functions. All organizations market (sell), finance (account), and produce (operate), and it is important to know how the Operations Management activity functions. Therefore, we study how people organize themselves for productive enterprise. •We study Operations Management because we want to know how goods and services are produced. The production function is the segment of our society that creates the products we use. •We study Operations Management to understand what operations managers do. By understanding what these managers do, you can develop the skills necessary to become such a manager. This will help you explore the numerous and lucrative career opportunities in Operations Management. •We study Operations Management because it is such a costly part of an organization. A large percentage of the revenue of most firms is spent in the Operations Management function. Indeed Operations Management provides a major opportunity for an organization to improve its profitability and enhance its service to society.

2.Identify four people who have contributed to the theory and techniques of operations management.

Eli Whitney (1800)
Frederick W. Taylor (1881)
Henry Ford (1913)
Walter Shewhart (1924)

3.Briefly describe the contributions of the four individuals identified in the preceding question

Eli Whitney (1800)
Eli is credited for the early popularization of interchangeable parts, which was achieved through standardization and quality control. Through a contract he signed with the U.S. government for 10 000 muskets, he was able to command a premium price because of their interchangeable parts.

Frederick W. Taylor (1881)
Known as the father of scientific management, he contributed to personnel selection, planning and scheduling, motion study, and the now popular field of ergonomics. One of his major contributions was his belief that management should be much more resourceful and aggressive in the improvement of work methods. Taylor and his colleagues, Henry L. Gantt and Frank and Lillian Gilbreth, were among the first to systematically seek the best way to produce. Another of Taylor’s contributions was the belief that management should assume more responsibility for: •Matching employees to the right job;

Providing the proper training;
Providing proper work methods and tools; and
Establishing legitimate incentives for work to be accomplished. Henry Ford (1913)
By 1913, Henry Ford and Charles Sorensen combined what they knew about standardized parts with the quasi-assembly lines of the meatpacking and mail-order industries and added the revolutionary concept of the assembly line, where men stood still and material moved. Walter Shewhart (1924)

Quality control is another historically significant contribution of the field of Operations Management. Walter combined his knowledge of statistics with the need for quality control and provided the foundations for statistical sampling in quality control. 4.Figure 1.1 outlines the operations, finance/ accounting, and marketing functions of three organizations. Prepare a chart similar to Figure 1.1 outlining the same functions for one of the following;

a)A newspaper

5.Answer question 4 for some other organization. Perhaps an organization where you have worked.

6.What are the three basic functions of a firm?

Marketing – generates demand
Production/operations – creates the product
Finance/accounting – tracks how well the organization is doing, pays bills, collects the money

7.Name the 10 decision areas of operations management

Service and Product Design :...
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