OM - GB335 - Chapter 1

Question 1

Production

Answer 1

is the creation of goods and services

Question 2

Operations Management

Answer 2

is the set of activities that create value in the form of goods and services by transforming inputs into outputs

Question 3

3 essential functions

Answer 3

1. marketing (generates demand)
2. Production/operations (creates product)
3. Finance/accounting (tracks how well the organization is doing, pays bills, collects money)

Question 4

Why study OM?

Answer 4

1. is 1 of the 3 major functions of any organization
2. we want and need to know how goods and services are produced
3. we want to understand what operations managers do
4. OM is such a costly part of an organization

Question 5

Basic Management functions

Answer 5

• planning
• organizing
• staffing
• leading
• controlling

Question 6

Ten critical decisions

Answer 6

1. design of goods and services
2. managing quality
3. process and capacity design
4. location strategy
5. layout strategy
6. human resources and job design
7. supply-chain management
8. inventory, MRP, JIT
9. scheduling
10. Maintenance

Question 7

New Challenges of OM

Answer 7

• global focus
• JIT
• Supply-chain management
• rapid product development, alliances
• Mass customization
• empowered employees, teams

Question 8

Characteristics of Goods

Answer 8

• tangible product
• consistent product definition
• product usually separate from consumption
• can be inventoried
• low customer interaction

Question 9

Characteristics of Service

Answer 9

• intangible product
• produced and consumed at same time
• often unique
• high customer interaction
• inconsistent product definition
• often knowledge-based
• frequently dispersed

Question 10

New trends in OM

Answer 10

• ethics
• global focus
• environmentally sensitive production
• rapid product development
• mass customization
• empowered employees
• supply-chain partnering
• JIT performance

Question 11

productivity

Answer 11

• is the ratio of outputs divided by the inputs
• measure of process improvement
• represents output relative to input
• only through productivity increases can our standard of living improve

Question 12

Measurement problems (of productivity)

Answer 12

1. quality

2. external elements

Question 13

Productivity Variables

Answer 13

1. labor
2. capital
3. management

Question 14

Key Variables for improved labor productivity

Answer 14

1. basic education appropriate for the labor force
2. diet of the labor force
3. social overhead that makes labor available

Question 15

Service Productivity

Answer 15

1. typically labor intensive
2. frequently focused on unique individual attributes or desires
3. often an intellectual task performed by professionals
4. often difficult to mechanize
5. often difficult to evaluate for quality

Question 16

Challenges facing operations managers (ethics & social responsibility)

Answer 16

• developing and producing safe, quality products
• maintaining a clean environment
• providing a safe workplace
• honoring stakeholder commitments