010 Introduction To Operations Management Flashcards
any activity that harvests value from the
assets of a business
Operations
the organization and coordination of
activities of a business to achieve defined objectives
Management
the management of systems
or processes that create goods and/or services
Operations management
physical items produced by business
organizations
Goods
activities that provide some combination of
time, location, form and psychological value
Services
is the creation of goods and services
Production
Three Basic Functional Areas of Business
Organizations
Finance, operations, marketing
secures and allocates financial resources
to fund business operations
Finance
produces goods and/or provides
services
Operations
assesses consumer wants and needs,
promotes organization’s goods and services
Marketing
Supply chain order and flows
Raw material, suppliers, producers, distributor, retailer, final customer
Money flow ⬅️
Value added ➡️
Value added formula
Price of outputs – cost of inputs
The greater the___added, the greater the
____.
Value, profitability
(Value-added)
use less input and produce the
same amount of output
Efficient processes
As more value-added to a good, it becomes more
expensive to store and transport within the supply
chain t/f
True
As more value-added to a good, it becomes more
expensive to store and transport within the supply
chain
False
Are goods tangible or intangible
Tangible
Ave services tangible intangible
Intangible
One of the 3 major functions of any organization
Operations management
Used to understand how people organize themselves
for productive enterprise
Operation management
Used to know how goods and services are
produced/provided
Operations management
Operations Management is a costly part of an organization t/f
True
What functions do operation managers perform?
Management functions
List management functions
Planning, organizing, staffing, directing, controlling
Decision making tools for operations management
• Models
• Linear Programming
• Optimization
• Fishbone Diagram
• Flowcharts
• Decision Trees
• Queuing models
• Simulation
• Scheduling tools
• Program evaluation and review technique (PERT)
• Critical path method (CPM)
• Forecasting techniques
• Statistical methods
an abstraction and simplified
representation of reality
Model
All models are wrong, but some are useful t/f
True
What are the three types models?
Physical, schematic, mathematical
Simple models are preferred over complicated ones t/f
True
What model includes miniature cars, scale-model
buildings etc.
Physical model
What model uses graphs, charts, drawings etc.
Schematic model
What model uses numbers, formulas,
symbols etc.
Mathematical models
Define quantification
You cannot improve something that
you do not measure
One or more actions that transform inputs
into outputs
Process
Order of a process
Input ➡️ process (transformation)➡️ output
What should you ask when deciding organizational strategy?
Responsive or efficient?
Process management study card
Deciding organizational strategy - Responsive or
Efficient?
• Matching demand and capacity
• Using in-house capacity or outsourcing
• Standardization vs. Customization
• Reducing costs (i.e. inventory, transportation,
material, labor, maintenance costs)
• Increasing productivity
• Improving quality
• Decreasing variability in production
What use the four basic sources of variation?
The variety of goods and services offered, Structural variation in demand, random variation, assignable variation
The variety of goods and services offered
Variation
predictable,
important for capacity planning
Structural variation in demand
natural causes such as weather,
cannot be changed
Random variation
defective inputs, incorrect
work methods, maintenance issues etc. can be
changed
Assignable variation
a set of interrelated parts that must work
together
System
The business organization is a system composed of what 3
subsystems
marketing subsystem
operations subsystem
finance subsystem
Details of system approach
• Emphasizes interrelationships among subsystems
• Main theme is that the whole is greater than the sum
of its parts
• The output and objectives of the organization take
precedence over those of any one subsystem –
think about supply chains
The output and objectives of the organization take
precedence over those of any one subsystem t/f
True
Key Issues for Operations Managers Today
Economic conditions, innovating, quality issues (total quality management & six sigma), risk management, completing in global economy
A philosophy that involves
everyone in an organization in a continual effort to improve
quality and achieve customer satisfaction
Total Quality Management (TQM)
A process for reducing costs, improving quality,
and increasing customer satisfaction
Six sigma
economic ups and downs, product recalls,
natural and man-made disasters
Risk management
labor costs, tax and tariffs,
regulations, cultural differences etc.
Competing in a global economy
A sequence of activities and organizations
involved in producing and delivering a good or service
Supply chain
Using resources in ways that do not
harm ecological systems that support human
existence
Sustainability
Buying goods or services
instead of producing or providing them in-
house
Outsourcing
A standard of behavior that guides how one
should act in various situations
Ethics
