chapter 1 flashcards
what is production?
the creation of goods and services
what is Operations Management?
the set of activities that creates value in the form of goods and services by transforming inputs into outputs
what are the main organizational functions?
- marketing: get customers
- operations: creates products or service
- finance/accounting: obtain funds, and tracks money
why do we study OM?
- it’s important to know how goods and services are produced
- we need to understand that people in operations do, in order to better carry out our job
- usually the major cost of an organization, which requires knowledgable managers/employees
what does Productivity measure ?
- measure of process improvement.
- it represents output relative to input
how can we improve productivity?
- increasing the amount of capital, or technology available to each worker, to do his or her job
- improving the education and skills of thr workers, as well as their experience. Investing in human capital
- organize businesses in a smarter way, using logic, common sense, simple solutions, new technology and innovation
TRUE OR FALSE:
do prices of goods increase at a much lower rate than prices of services?
TRUE
how has productivity changed in the last 150 years?
- productivity of goods and agriculture increased a lot.
- productivity of services has been low
- therefore, prices of goods decreased and services not
what’s the difference between Efficiency and Effectiveness ?
- Efficiency: doing the thing right (“to manage”) At the lowest cost, at the shortest time, at the highest quality
- Effectiveness: doing the right thing (“to lead”) Doing the real important things that adds value
what is more important, Efficiency or Effectiveness?
“it is not enough to do your best; you must KNOW WHAT TO DO (Effective), and then do your best (Efficient)”
Edward Deming
what are the ten critical decisions of Operations Managment?
- service, product design
- quality management
- process, capacity design
- location
- layout design
- Human Resources, job design
- supply chain management
- inventory management
- scheduling
- maintenance
what are some characteristics of Goods?
- tangible product
- consistent product definition
- production usually separate from consumption
- can be inventoried
- can be resold
- low customer interaction
what are some Characteristics of Services?
- intangible product
- produced and consumed at same time
- often unique
- high customer interaction
- inconsistent product definition
- often knowledge based
- frequently dispersed
how do we measure Productivity?
units produced / input used
how do we measure Single-Factor Productivity?
output/labour
output/material
output/energy
