Chapter 1

Question 1

Operations is the part of a business organization which…

Answer 1

is responsible for producing goods and/or services

Question 2

Goods

Answer 2

Physical items (i.e. raw materials, parts etc.)

Question 3

Services

Answer 3

activities that provide some combination
of time, location, form or psychological value.

Question 4

What does the collective sucess or failure of companies’ operations functions have an impact on?

Answer 4

The ability of a nation to compete with other nations, and on the nation’s economy.

Question 5

All business organizations have three basic function areas

Answer 5

1) Finance
2) Marketing
3) Operations

Question 6

Finance is responsible for…

Answer 6

• securing financial resources at favorable prices
  -allocating those resources throughout the organization
  -budgeting
  -analyzing investment proposals
  -providing funds for operations.

Question 7

Marketing is responsible for…

Answer 7

• Assessing consumer wants and needs
• Selling and promoting the organizations’ goods or services.

Question 8

Operations is responsible for…

Answer 8

-Producing the goods
- Providing the services.

Question 9

Operations management

Answer 9

The management of systems or processes that create goods and/or provide services.

Question 10

Supply chain

Answer 10

A sequence of organizations -their facilities, functions, and activities- that are involved in producing and delivering a product or service.

Question 11

Value-added

Answer 11

The difference between the cost of inputs and the value or price of outputs

Question 12

The greater the value-added …

Answer 12

the greater the profit

Question 13

Value-added for non-profit organisation is …

Answer 13

their value-added to society.

Question 14

The greater the value-added …

Answer 14

The greater the profit.

Question 15

Similarities of managing production and managing services:

Answer 15

1) Forecasting and capacity planning to match supply and demand.
2) Process Management
3) Managing variations
4) Monitoring and controlling costs and productivity
5) Supply chain management
6) Location planning, invertory management, quality control and scheduling.

Question 16

Jobs which are closely related to operations.

Answer 16

-Finacial services
-Accounting services
-Information services

Question 17

What do finance and operations management personnel exchange information and expertise in?

Answer 17

1) Budgeting
2) Economic analysis of investment proposals
3 Provision of funds

Question 18

Besides finance and marketing, other functional areas of organization Operations interact with.

Answer 18

• Legal
• Management information system (MIS)
• Accounting
• Human resources
• Public relations

Question 19

Lead time

Answer 19

The time between ordering a good or service and receiving it.

Question 20

Key decisions which operations managers make. (They affect the entire organisation)

Answer 20

> What resources will be needed and in what amounts.
When will each resource be needed, when should the work be scheduled, when is corrective action needed, when should materials and other supplies be ordered.
Where will the work be done
How will the product or service be designed, how will the work be done, how will resources be allocated
Who will do the work

Question 21

Model

Answer 21

Abstraction of reality, a simplified representation of something.

Question 22

Physical model

Answer 22

a model that looks like their real-life counterparts
advantage: physical correspondence to reality

Question 23

Schematic model

Answer 23

a model that is more abstract, they have less resemblance to the physical reality.
advantage: they are simple to construct and change, have some degree of visual correspondence.

Question 24

Mathmatical model

Answer 24

very abstract, do not at all look like their physical counterparts and are easy to manipulate.

Question 25

Benefits of models:

Answer 25

1) Easy to use and less expensive
2) Requires organization and quantification of info, often indicating areas where additional info is needed.
3) Increase understanding of the problem.
4) Enables managers to analyze what-if questions.
5) It is a consistent tool for evaluation, providing a standardized format for problem analysis.
6) Enable users to bring the power of mathematics to bear on a problem.

Question 26

Limitations of models:

Answer 26

1) Quantitative information may be emphasized, at the expense of qualitative information.
2) They can be incorrectly applied and results can be misinterpreted.
3) Does not guarantee good decisions.

Question 27

Pareto Phenomenon

Answer 27

The principle that a small number of factors or inputs (the vital few) often account for a large percentage of results or outputs. (This concept is applicable to various levels of management and decision-making).

Question 27

Trade-off decisions

Answer 27

a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

Question 28

Customization

Answer 28

The degree to which products or services are tailored to individual customer needs. (Highly customized products or services are labor-intensive, time-consuming, and involve skilled professionals and flexible equipment.)

Question 29

System

Answer 29

Set of interrelated parts that must work together.