Production Management / Operations Management:
It is the management of systems or processes that create goods and/or services.
Business: Individuals or organizations who try to earn profit by providing goods or services that satisfy people’s needs. It is the exchange between buyer and seller. It improves the standards of living.
Product: A good or service with tangible or intangible characteristics that provide satisfaction and benefit.
Buyer: A buyer recognizes a need for a good or service and trades money with a seller to obtain that product or service.
Seller: The seller participates in the process in hopes of gaining profits.
Profit / Value added: The difference between what it costs to make and sell product and what the customer pays for it. It is the rewards for the business organizations who use people, information, technologies to create and market want satisfying good and services.
A business organization has three primary functions. They are (i) Finance
i) Finance: It is responsible for securing financial resources at favorable prices and allocating those resources through the organization. It is also responsible for budgeting, analyzing investment proposals, and providing funds for production. ii) Operations: It is responsible for planning and coordinating the use of the organization’s resources to convert inputs into output. iii) Marketing: It is responsible for assessing consumers wants and needs and selling and promoting the organization’s goods and services.
** If a business organization is a car then operations is its engine. Examples of input, transformations and outputs:
|Inputs |Transformations/processing’s |Outputs | |Land |Processing |Homes | | | | | |Human: Physical, Intellectual |Transporting |Automobiles | | | | | | |Teaching |Computers | |Capital | | | | |Farming |Machines | |Raw materials: Energy, water, metals, wood etc | |TVs | | |Mixing |Food products | | | |Text books | |Equipments: Machines, computers, trucks, tools, etc |Copying | | | | |CD players | |Facilities: Hospitals, factories, retail stores etc.|Faxing | | | | |Car repairs | | |Etc. | | | | |Health care | | |...