Osm Ch1

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STUDY OUTLINE FOR CHAPTER 1
INTRODUCTION TO Operations Management
1. Operations management is: The management of systems or processes that create goods and/or provide services 2. What are the three basic functions in business organizations? 1)Marketing
2)Operations
3) Finance

2. A supply chain consists of A sequence of activities and organizations involved in producing and delivering a good or service

4. What is meant by the term value-added? The amount by which the price or value of an output is increased due to the addition of material, labor, or other resource. 5. The operations function oversees a transformation or conversion process. Explain briefly.

Input, Output and Value-added. Any operation can be described as a set of inputs (i.e. labor and materials) that are transformed into a set of outputs (i.e. goods and/or services), as illustrated in Figure. The essence of operations management is value-added, or the degree to which the value of all outputs of an operation exceed the value of its inputs. 6. Explain the term goods-service continuum. Products are typically neither purely service- nor purely goods-based. 7. List some ways that manufacturing systems and service systems differ. * Jobs in services are often less structured than in manufacturing * Customer contact is generally much higher in services compared to manufacturing * In many services, worker skill levels are low compared to those of manufacturing employees * Services are adding many new workers in low-skill, entry-level positions * Employee turnover is high in services, especially in low-skill jobs * Input variability tends to be higher in many service environments than in manufacturing * Service performance can be adversely affected by many factors outside of the manager’s control (e.g., employee and customer attitudes

8. What is a process? Process is one or more actions that transform inputs into outputs 9. Give an example of each process category:
Upper management: These govern the operation of the entire organization. Examples include organizational governance and organizational strategy. Operational: These are core processes that make up the value stream. Examples include purchasing, production and/or service, marketing, and sales. Supporting: These support the core processes. Examples include accounting, human resources, and IT (information technology).

10. List the basic sources of variation
Four Sources of Variation:| |
Variety of goods or services being offered| The greater the variety of goods and services offered, the greater the variation in production or service requirements.| Structural variation in demand| These are generally predictable. They are important for capacity planning.| Random variation| Natural variation that is present in all processes. Generally, it cannot be influenced by managers.| Assignable variation| Variation that has identifiable sources. This type of variation can be reduced, or eliminated, by analysis and corrective action.|

11. Why is it important to manage variations? Variations can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems. 12. Operations management professional make a decisions that affect the entire organization. Briefly explain each of these categories: What: What resources are needed, and in what amounts?

When: When will each resource be needed? When should the work be scheduled? When should materials and other supplies be ordered? Where: Where will the work be done?
How: How will the product or service be designed? How will the work be done? How will resources be allocated? Who: Who will do the work?

13. What are models, and what are some of the ways they are useful? Model: is an abstraction of reality
* Models are generally easier to use and less expensive than dealing with the real system * Require users to...
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