Ch. 1

Question 1

What is OM?

Answer 1

is the business function responsible for managing and coordinating the resources needed to produce a company’s products and services.

Question 2

Operations decision has impact on which business department?

*Hint: There 2

Answer 2

Marketing & Finance

Question 3

What is the role of operations management? What are the inputs/outputs?

Answer 3

To transform a company’s input into the finished goods or services.

Inputs: hr, facilities, materials
Outputs: the finished product/service

Question 4

What is value added?

Answer 4

The net increase of the final value of the product and the value of all the inputs.

As a customer
Value= what do I get/what did it cost me
*Operations has to focus on the “what do I get” to create more value

Question 5

Give an example of value added in a profit organization?

Answer 5

the value of outputs is measured by the price that customers are willing to pay for those goods or services

Question 6

Define efficiency

Answer 6

performing activities well and at the lowest possible cost and time.

Question 7

What is the difference between manufacturing & service organization?

Answer 7

Manufacturing: produce a physical/tangible product which can be stored in inventory - low customer contact with operation

Service: produce intangible product that can’t be produce ahead of time - high customer contact because they are present during the creation of the service (ex: theatre, barber shops, hospital).

*Both organization overlaps. For instance, a barber shop can sell its own product line & furniture store offers the service of free delivery.

Question 8

What is strategic decision & tactical decision?

Answer 8

Strategic: 
-long-term
-broad in scope
-for the entire company
"What market do we plan to compete in?"

Tactical:
-narrow in scope
-short-term (day-to-day issues)
-provide feedbacks to strategic decisions
"Ordering parts & materials"

Question 9

What is a lean system?

Answer 9

Takes a total system approach to create an efficient operation (pulling together the best practice concepts)

• JIT
• Supply chain management
• Total quality management

Question 10

What is cross-functional decision making?

Answer 10

Bringing experts from every department into cross functional teams to solve company problems.

Question 11

What systems do companies use to better manage information? (2)

Answer 11

• ERP (enterprise resource planning) - coordinates all activities involved in producing to delivering
• CRM (customer relationship management) - collect specific customer data

Question 12

What are the impactsand challenges of E-Commerce on OM?

Answer 12

Impacts:

• Relations companies have with their suppliers and customers. Tighter co-operation with suppliers, which can lead to quicker and more accurate deliveries, and lower inventory.
• Suppliers can become involved with producers early in the product design. This can lead to better quality and lower production costs.
• Better links between companies and their customers. This improves their ability to predict and provide what the customers want.
• Shift the balance between performing a task in-house and outsourcing. This has lead to greater outsourcing as companies focus more intensely on their core competencies.

Challenges:

• Increase competition
• Increase transportation costs