Chapter 5.1 - The role of operations management

Question 1

Factors of production

Answer 1

The resources needed to produce a good/service, namely land, labor, capital, and enterprise

Question 2

Operations management (production)

Answer 2

Concerned with providing the right goods and services in the right quantities and at the right quality level in a cost-effective and timely manner

Question 3

Production process/transformation process

Answer 3

Refers to the method of turning factor inputs into outputs by adding value in a cost-effective way

Question 4

Productivity

Answer 4

A measure of a firm’s operational efficiency level, calculating the rate at which inputs (factors of production) are transformed into outputs (goods and services)

Question 5

Sustainability

Answer 5

The practice of enabling the production and consumption of goods and services for the people of today without compromising the needs of future generations

Question 6

Value added

Answer 6

Occurs during the production process when the value of output is greater than the costs of production. Firms earn profit if value added exists in the production process