Week 1 - Introduction to Operations Management Flashcards
What is operations management?
About managing the way goods or services are provided
What are processes?
They produce the products we buy and deliver the services we experience
what is the transformation process
The overarching process in any business which has both inputs and outputs. the inputs can be a set of transforming resources or resources that are transformed themselves
What are the differences between outputs from service providers and product providers?
1) Products can be stored if they are not sold that day but services cant be eg. a hotel room will go empty if it is not sold that night
2) products are tangible, durable and highly specific whereas services are intangible ( eg the output is often the sense of emotion that the customer experiences rather than a physical thing)
what is the difference between transformed resources and transforming resources?
Transformed resources change/move throughout the system and will eventually leave the system completely. Transforming resources remain in the system once the transformation has been completed
what re the first basic industrial types?
Primary- agriculture
secondary- manufacturing
Tertiary- services
What happens as a country develops and what is the impact of this on operations managers?
As a country develops it moves towards tertiary industries. This means that operations managers jobs are constantly shifting towards the service industry
In reality, are there solely product businesses and solely service businesses?
No it is often a mix of both eg. when Samsung sell you a fridge they also try to sell you delivery service, insurance, installation etc
list the four v’s
- Volume of their output
- variety of their output
- visiblity of which customers get in the creation of their output
- variation in the demand for their output
What do the four v’s help to measure?
how efficient business processes are
Describe the volume dimension?
High volume processes (eg. McDonald’s) can exploit economies of scale and can be systemized
Describe the variety dimension
This is the range of products and services produced. high variety increases costs and requires higher flexibility. eg a taxi firm has higher route variety than a bus because it can pick u up from anywhere and drop you off anywhere. this is why they are more expensive
Describe the variation dimension
Lower variation in demand is cheaper because processes can be made routine and predictable. This results in high utilization of resources which lowers the unit cost. High variation of demand requires processes to change output level, holding inventory or having idle machinery is expensive. eg. a hotel in a beach resort vs a hotel in a city centre
Describe the visibility dimension
Highly visible products tend to add cost. It means how much of its operations are visible to customers. service industries tend to have higher visibility than product ones. eg. hotel staff need good customer contact skills whereas Amazon standardized it tasks for staff who need few customer contact skills. Hotels will also need many branches near centres of demand whereas web-based businesses can centralize its operation on one site, lowering cost.
Give an example of a business that has a mixed visibility
An airport, baggage handlers are rarely seen but the information desks are highly visible
