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COMM225 > Lesson 1: Introduction to Operation Management > Flashcards

Lesson 1: Introduction to Operation Management Flashcards

1
Q

3 major functions of an organization

A
  • Finance
  • Marketing
  • Operations
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2
Q

What is finance?

A

Capital is required for running and creating the organization. Finance is all about arranging and managing the capital.

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3
Q

What is marketing?

A

Accessing customer’s need, competition, demand, pricing, etc.

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4
Q

What is operations?

A

Transforming various inputs to products/services.

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5
Q

What is value added?

A

The term used to describe the difference between the cost of inputs and the value or price of outputs.

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6
Q

What are examples of inputs and outputs for value added?

A

Inputs: buildings, labour, machines, information and materials

Outputs: products (goods) and services

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7
Q

What is the value of outputs for non-profit organizations?

A

Their value to society; the greater the value added, the greater the efficiency of these operations.

Ex: highway construction, police and fire protection.

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8
Q

What is the value of outputs for for-profit organizations?

A

Measured by the prices that customers are willing to pay for those goods and services.

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9
Q

What are the operations interfaces?

A
  • Logistics (handling and transportation of goods)
  • Accounting (summary of capital assets, work in process, debt, etc.)
  • MIS (Management Information System)
  • IT (system that handles various organizational functions such as payrolls, ordering/purchasing, etc.
  • Human Resources
  • Manufacturing Engineering
  • Maintenance
  • Product Design
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10
Q

In what manners do manufacturing and services differ in?

A
  • Customer contact, use of inventories, and demand variability
  • Uniformity of inputs
  • Labour content of jobs
  • Uniformity of outputs
  • Measurement of productivity
  • Quality assurance
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11
Q

The 3 primary functions that exist in most business organizations are:

A

Operations, marketing and finance

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12
Q

Which of the following is not a type of service operation?

  • Fabrication of metals
  • Banking
  • Transportation and warehousing
  • Retail trade
  • Hotels and restaurants
A

Fabrication of metals

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13
Q

What does value-added refer to?

A

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

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14
Q

Planning decisions are usually ________ and ________ term.

  • Forecasting; short
  • Tactical; long
  • Strategic; short
  • Strategic; long
  • Tactical; medium
A

Tactical; medium

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15
Q

What is the marketing function’s main concern?

A

Assessing customers wants and needs.

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16
Q

Which is not a significant difference between manufacturing and service operations?

  • Amount of customer contact
  • Measurement of productivity
  • Uniformity of output
  • Cost per unit
  • Labour content of jobs
A

Cost per unit

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17
Q

What is referred to as “operating at minimum cost and time”?

A

Efficiency

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18
Q

Which of the following functions is mostly service based, as identified in the “goods-service” continuum?

  • Automotive repair
  • Restaurant meal
  • Teaching
  • Automotive assembly
  • Software development
A

Teaching

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19
Q

What is referred to as “a balance achieved between two incompatible features”?

A

Trade-off

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20
Q

True or False:

Operations managers are responsible for managing activities and resources that produce goods and/or provide services.

A

True

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21
Q

True or False:

Effectiveness refers to achieving intended goals whereas efficiency refers to minimizing cost and time.

A

True

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22
Q

True or False:

The operations function exists only in firms that are goods-oriented.

A

False

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23
Q

True or False:

Value-added refers to the cost of the inputs required to produce goods and services.

A

False

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24
Q

True or False:

Operations management involves both system design and planning/control decisions.

A

True

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25
Q

True or False:

Design decisions are usually strategic and long term, while planning decisions are tactical and medium term.

A

True

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26
Q

True or False:
A basic difference between manufacturing and service organizations is that services are action-oriented and manufacturing is goods-oriented.

A

True

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27
Q

True or False:

Managing inventory levels is considered a planning/control operations decision area.

A

True

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28
Q

Service often requires a higher labour content, whereas the production of goods is more capital intensive.

A

True

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29
Q

True or False:

Many operations management decisions can be described as trade-offs.

A

True

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30
Q

What is competitiveness?

A

The ability and performance of an organization in the marketplace compared to other organizations that offer similar goods or services.

(The firm’s ability to stay in the market)

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31
Q

What is strategic planning?

A

A set of policies, objectives and action plans aimed at securing the organization’s long term goal.

Ex: big expansion plans, investments, new or sets of products, etc.

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32
Q

What is productivity?

A

A measure of the effective use of all the resources.

Ex: workforce, money, machines, material, etc.

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33
Q

What is the key purchasing criteria?

A
  • Cost
  • Price
  • Quality
  • Flexibility
  • Variety
  • Delivery flexibility and speed
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34
Q

What is cost (in competitiveness)?

A

The unit of production of a good or performance of a service to an organization.

(Organizations that compete based on cost (from a customers perspective) emphasize lowering their operating costs)

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35
Q

What is price (in competitiveness)?

A

The amount a customer must pay for the good or service.

If all other factors are equal, customers will choose the good or service with the lowest price

36
Q

What is quality (in competitiveness)?

A

From an organization’s perspective: determining customers’ quality requirements, translating these into specifications for goods or services and consistently producing goods or performing services to these specifications.

37
Q

What is flexibility (in competitiveness)?

A

Refers to being able to produce a variety of goods or performing a variety of services in the same facility.

38
Q

How is flexibility (in competitiveness) usually achieved?

A

Having general-purpose equipment, excess capacity, and multi-skilled workers, resulting in easy changeover between production of goods and performance of services.

39
Q

What is variety (in competitiveness)?

A

The choice of models and options available to customers. The more variety, the wider the range of potential customers.

40
Q

What is delivery flexibility and speed (in competitiveness)?

A

Being able to consistently meet promised due dates by producing goods or performing services on time or quickly.

41
Q

How is delivery flexibility and speed (in competitiveness) achieved?

A

Using faster and more reliable resources/processes.

42
Q

How do we assume that customers pick products?

A

Based on order qualifiers and then choose the best valued product (order winners).

43
Q

True or False:

Order qualifiers guarantee sales.

A

False

44
Q

What is strategy?

A

Long term plan to give direction (growth) to an organization; can only be developed if an organization’s vision or goals are clear.

45
Q

What is vision?

A

Shared perception of the organization’s future, what it will achieve and it’s supporting philosophy.

Ex: Our vision is to be the quality leader in everything we do.

46
Q

What is mission?

A

The basis of the organization; the reason for its existence, products and market.

Ex: Our mission is to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.

47
Q

How is an organization’s strategy formed?

A

Based on the Mission and Vision.

48
Q

How do functional strategies support the mission of the organization?

A

The long term mission is converted to a set of goals.
Then, a long term strategy is formed to achieve these goals.
Finally, various functional strategies are formed to support the organizational strategy.

49
Q

What is market analysis?

A

What the customer wants and how to provide it.

50
Q

What is market segmentation?

A

Identifying the needs of each segment.

51
Q

How does market analysis gauge the market for a product?

A
  • Past sales
  • Surveys
  • Feedback
  • Success of similar products
  • etc.

(Once the needs are identified based on the competitive priorities, the firm develops the operations strategy)

52
Q

What is the emphasis on for a “cost” competitive priority?

A

Low cost

53
Q

What is the emphasis on for a “quality” competitive priority?

A
  • Meeting customer requirements
  • Innovation
  • Customer service
54
Q

What is the emphasis on for a “flexibility” competitive priority?

A
  • Variety

- Quantity flexibility

55
Q

What is the emphasis on for a “delivery” competitive priority?

A
  • Rapid delivery

- On-time delivery

56
Q

What are core competencies?

A

The unique resources and strength that an organizations management consider while formulating the strategy.

(Organizations take advantage of what they do particularly well)

57
Q

How does operations strategy help?

A
  • Helps in implementing the organization’s corporate strategy
  • Helps build a customer-driven firm
  • Is the core of the managing process and value chain
58
Q

Why do the firm’s internal processes need to be organized?

A

To be effective in competitive environments.

Operations strategy creates the difference

59
Q

Productivity Formula

A

Productivity = Outputs/Inputs

60
Q

For what can productivity ratios be computed for?

A
  • A worker
  • A department
  • An organization
  • A country
61
Q

True or False:

Productivity growth is relative to previous periods’ productivity.

A

True

62
Q

Productivity Growth Formula

A

Productivity Growth = (Current Period Productivity - Previous Period Productivity)/Previous Period Productivity

(CPP - PPP)/PPP

63
Q

True or False:

Productivity is efficiency.

A

False

64
Q

True or False:

Efficiency is always less than or equal to 1, but productivity could be greater than 1.

A

True

65
Q

What is productivity used for?

A
  • Self-assessment measure (a detailed analysis helps in areas of improvement)
  • Track performance over time
  • Compare competitiveness
66
Q

True or False:

A characteristic that was once an order winner may become an order qualifier, and vice versa.

A

True

67
Q

True or False:
Order qualifiers are those characteristics of an organization’s goods or services that cause them to be perceived as better than the competition.

A

False

68
Q

True or False:

It is important that an organization has a clear simple mission/vision/values statement.

A

True

69
Q

True or False:

The purchasing criteria of quality and timeliness of delivery are order winners for all companies.

A

False

70
Q

True or False:

A mission statement should provide a guide for the formulation of strategies for the organization.

A

True

71
Q

True or False:
Strategic planning includes both determining long-term plans and implementing them through allocation of resources and action plans.

A

True

72
Q

True or False:
Organizational strategy must be determined without considering the realities of functional area strengths and weaknesses.

A

False

73
Q

True or False:
Formulating an operations strategy requires focusing solely on the operations function, leaving the concerns of other functions and the status of external markets to broader organizational strategic planning.

A

False

74
Q

True or False:

Productivity is defined as the ratio of output to input.

A

True

75
Q

True or False:
Time-based strategies focus on reducing the time required to accomplish certain activities, such as new product development or delivery to the customer.

A

True

76
Q

True or False:

Productivity is directly related to competitiveness.

A

True

77
Q

True or False:
Even though labour cost as a proportion of total cost has been decreasing in manufacturing companies, labour productivity is still the main measure being used to gauge the performance of individuals and plants.

A

True

78
Q

True or False:

Variability of the output of services makes it more difficult to measure service productivity.

A

True

79
Q

What are characteristics that customers perceive as minimum standards of acceptability called?

A

Order qualifiers

80
Q

Product variety is an example of:

  • A dimension of flexibility
  • Operations infrastructure
  • A key purchasing criteria
  • A process type
  • A generic operations strategy
A

A key purchasing criteria

81
Q

Which of the following is not a key purchasing criteria?

  • Timeliness
  • Variety
  • Quality
  • Price
  • Vendor relations
A

Vendor relations

82
Q

Which of the following is not a step for formulating an operations strategy?

  • Segment the customers into types
  • Assess the degree of focus at each plant
  • Link the organizational goals to the operations strategy
  • Define the mission and values of the organization
  • Conduct an audit to determine the strengths/weaknesses of the current operations strategy
A

Define the mission and values of the organization

83
Q

What is a “set of well coordinated policies, objectives, and action plans, directly affecting the operations function, which is aimed at securing a long-term sustainable advantage over the competition” called?

A

Operations strategy

84
Q

Which of the following is not a factor that affects productivity?

  • Design of the workspace
  • Use of computers in an office
  • Use of Internet and e-mail
  • Standardizing work process
  • Analysis of competitors
A

Analysis of competitors

85
Q

Which of the following determines where the organization desires to be in the future?

  • Action plans
  • Vision statement
  • Mission statement
  • Values statement
  • Goals statement
A

Vision statement

COMM225 (8 decks)

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