Chapter 1

Question 1

What is operations management?

Answer 1

• Set of activities that create value in the form of goods and services by transforming inputs into outputs.
• Essential functions in a company: COMMERCIAL, PRODUCTION/ OPERATIONS, FINANCE/ ACCOUNTING.

Question 2

Why study OM?

Answer 2

• OM has 3 of the main functions in a company.
• To know how goods/ services are produced.
• Understand what operation managers do.
• OM is a costly part of an organization.

Question 3

What Operations managers do?

Answer 3

• Planning.
• Organizing.
• Staffing.
• Leading.
• Controlling.

Question 4

Significant Events in OM

Answer 4

• Cost Focus.
• Quality Focus.
• Customization Focus.

Question 5

Cost Focus

Answer 5

• Early concepts (1776- 1880).
• Scientific Management (1880- 1910).
• Mass production (1910- 1980).

Question 6

Quality Focus

Answer 6

• Lean production (1980- 1995).

Question 7

Customization Focus

Answer 7

• Mass Customization (1995- 2010).

Question 8

Frederick W. Taylor:

Answer 8

• Known as father of scientific management.
• Created efficiency principles: Management should be more responsible for:
  > Matching employees to right job
  > Providing proper training.
  > Providing proper work methods and tools.
  > Establishing incentives for work to be accomplished.

Question 9

Henry Ford:

Answer 9

• 1913: Created the first moving assembly line.

Question 10

W. Edwards Deming:

Answer 10

• Credited with teaching Japan quality control methods.

- His methods involve workers in decisions.

Question 11

Characteristics of Goods:

Answer 11

• Tangible product.
• Consistent product definition.
• Production separated from consumption.
• Can be invented.
• Low customer interaction.

Question 12

Characteristics of Services:

Answer 12

• Intangible product.
• Produced and consumed at same time.
• Often unique.
• High customer interaction.
• Often knowledge- based.

Question 13

Productivity Challenge:

Answer 13

• Productivity is the ratio of outputs divided by the inputs (such as labor and capital).
• Objective is to improve this measure of efficiency.

Question 14

What is productivity?

Answer 14

• Measure of process improvement.
• Represents output relative to input.
• Only through productivity increase can our standard of living improve.

Question 15

Measurement problems:

Answer 15

• Quality may change while quantity of inputs and outputs remains constant.
• External elements may cause an increase or decrease in productivity.
• Precise units of measure may be lacking.

Question 16

Productivity variables:

Answer 16

• Labor: contributes about 10% of annual increase.
• Capital: contributes about 38% of annual increase.
• Management: contributes about 52% of annual increase.

Question 17

Key variables for improved Labor productivity:

Answer 17

• Basic education appropriate for LF.
• Diet of LF.
• Social overhead that makes labor available.
• Maintaining and enhancing skills.

Question 18

Productivity in service sector:

Answer 18

• Typically labor intensive.
• Focused on unique individual attributes or desires.
• Intellectual task performed by professionals.
• Difficult to mechanize
• Difficult to evaluate its quality.

Question 19

Challenges facing OM:

Answer 19

• Developing safe quality products.
• Maintaining a clean environment.
• Providing a safe workplace.