Chapter 1: Introduction to Operations Management
This chapter provides a definition of operations management. The role and importance of operations in an organization are described, along with operations decisions that are made. The differences between manufacturing and services are described. The history and current trends of operations management are discussed, including the impact of information systems. Finally, the interaction between operations and other business functions are described.
Answers to Discussion Questions in Textbook
1. Define the term operations management.
Operations management manages the resources needed to produce the company’s products and services. It involves managing people, machines and information.
2. Explain the decisions operations managers make and give three examples.
Operations managers must plan the production schedule. This entails deciding how much to produce and in what order. This information would be used to make purchasing and staffing decisions. Operations managers must manage inventory. They must arrange the inventory in the warehouse. They also facilitate the movement of inventory from the warehouse to the retail facilities or the customer. Operations managers also must manage quality levels. This may include inspection of materials, and the use of quality tools such as control charts.
3. Describe the transformation process of a business. Give three examples. What constitutes the transformation process at an advertising agency, a bank, and a TV station?
The transformation process involves taking the various inputs and transforming them into outputs. An advertising agency would transform the time of its staff into an advertising campaign. A bank may use the time of a teller, an input computer, and a bank branch to accept a deposit. A TV station could use the time of its production crew, the video equipment, and the studio to produce a news story.
What are the three major business functions, and how are they related to one another? Give specific examples.
The three major business functions are finance, marketing and operations. Operations entail the production of a product or service and must manage the inputs to production such as workers' time, aluminum, and machine time to create airplane parts Finance manages the assets, such as the building used for production, investments and cash flows related to production, such as providing the needed machines. Marketing generates sales of the product or service, such as finding customers for the proposed airplanes.
Find an article that relates to operations management in either the Wall Street Journal, Fortune, Or Business Week. Come to class prepared to share with others what you learned in the article.
Students' answers will depend upon the article found. An example would be recent articles discussing the struggle airlines are having to reduce their costs in producing their main output: revenue passenger miles.
Examine the list of Fortune magazine’s top 100 companies. Do most of these companies have anything in common? Are there industries that are most represented?
Students should be able to find the list through their university library. While the top 100 contain firms in many different industries, students will probably notice that Oil, Finance, Retail, and Automobiles are heavily represented.
Identify the two major differences between service and manufacturing organizations. Find an example of a service and manufacturing company and compare them.
Service organizations involve the customers in the operations to some degree, while manufacturing organizations do not. Manufacturing organizations produce a physical product that can be stored in inventory. Service organizations cannot create an inventory of the service since it is intangible. For example, Ford Motors is a manufacturer. It makes automobiles, customers have little contact with the...
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