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What is the primary function of operations management within a business?
What is the primary function of operations management within a business?
To plan, organize, coordinate, and control resources needed to produce a company’s goods and services.
Briefly describe how operations management acts as a transformation process.
Briefly describe how operations management acts as a transformation process.
Operations management takes inputs and transforms them into outputs, adding value in the process.
Name three business functions that operations management interacts with.
Name three business functions that operations management interacts with.
Marketing, Finance, and IS/IT.
What are the inputs and output of the assembly process map, in context of operations management?
What are the inputs and output of the assembly process map, in context of operations management?
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What are the three primary responsibilities of an operations manager?
What are the three primary responsibilities of an operations manager?
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Name three of the nine categories of decisions usually made by operations managers.
Name three of the nine categories of decisions usually made by operations managers.
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What are the '4Vs' used to signify operations differentiation?
What are the '4Vs' used to signify operations differentiation?
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Briefly explain 'variation' in the context of operations management.
Briefly explain 'variation' in the context of operations management.
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What is one key difference between manufacturing and service organizations from an operations perspective?
What is one key difference between manufacturing and service organizations from an operations perspective?
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What are two characteristics of a tangible product offering with a low degree of customer contact?
What are two characteristics of a tangible product offering with a low degree of customer contact?
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What are two characteristics of an intangible product offering with a high degree of customer contact?
What are two characteristics of an intangible product offering with a high degree of customer contact?
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Define effectiveness in the context of operations.
Define effectiveness in the context of operations.
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Define efficiency in the context of operations.
Define efficiency in the context of operations.
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What is the formula for productivity?
What is the formula for productivity?
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Why is productivity a measure of process improvement?
Why is productivity a measure of process improvement?
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In the example provided in the text about workforce training, why did overall productivity not improve despite effective training?
In the example provided in the text about workforce training, why did overall productivity not improve despite effective training?
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Explain the difference between efficiency and effectiveness, using an example.
Explain the difference between efficiency and effectiveness, using an example.
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Explain the key difference between efficiency and effectiveness in a business strategy, according to the text.
Explain the key difference between efficiency and effectiveness in a business strategy, according to the text.
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A company increased its output while keeping inputs constant. What happens to productivity, and why?
A company increased its output while keeping inputs constant. What happens to productivity, and why?
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Describe a scenario where a company could be efficient but not effective.
Describe a scenario where a company could be efficient but not effective.
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Name the three productivity variables that are used to calculate Total Factor Productivity.
Name the three productivity variables that are used to calculate Total Factor Productivity.
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What is the difference between single-factor productivity and multi-factor productivity?
What is the difference between single-factor productivity and multi-factor productivity?
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If a business decreases its labor hours used, while maintaining the units produced at a constant level, what happens to its labor productivity ratio?
If a business decreases its labor hours used, while maintaining the units produced at a constant level, what happens to its labor productivity ratio?
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In the context of productivity calculations, if 'Output' and 'Inputs' are expressed in monetary values, what type of broader productivity is it?
In the context of productivity calculations, if 'Output' and 'Inputs' are expressed in monetary values, what type of broader productivity is it?
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Answer the above
Answer the above
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Study Notes
Introduction to Operations Management
- Operations management is a business function focused on planning, organizing, coordinating, and controlling resources to produce goods and services.
- It involves multiple departments, including marketing, operations, and finance.
- The role of operations managers includes implementing operations strategy, gaining competitive advantage, and increasing productivity.
- Operations are critical to a business's success, impacting profitability and customer satisfaction.
Agenda
- The agenda covers three parts of operations management:
- Part 1: Operations management and the role of operations managers (1.20 – 1.45)
- Part 2: Metrics in Operations (1.45-2.15)
- Part 3: Capacity Analysis & Activity (2.15-3)
Part 1: The Role of Operations
- Operations management is a vital business function for planning, organizing, coordinating & controlling resources needed to produce a company's goods & services.
What is Operations Management?
- Operations management is a business function that plans, organizes, coordinates, and controls the resources required to produce a company's goods and services.
- Key departments involved include marketing, operations, and finance.
- The President/CEO oversees all departments.
- Operations managers manage people, equipment, technology, materials and information.
- The purpose of operations is to produce goods & services.
Operations at The Heart of The Business
- Operations management (OM) is central to a business.
- OM interacts with other business functions like marketing, IS/IT, and finance.
- Information flows between OM & other departments.
Operations as a Transformation Process
- Operations are a process of transformation.
- Raw Materials (Input) are transformed into finished goods & services (Output).
- Management capital and labor play a significant role in this transformation.
Example of a Value Adding Transformation Process
- A diagram illustrating how individual parts are assembled to create final product.
- Different steps involved in production are shown.
Why Operations Management is Important
- Operations management is crucial.
- It affects factors like sales, cost of goods, gross margin, and finance costs.
- High profit margin areas are the "high hanging fruit" of a business.
Activity: What Do Operations Managers Do?
- Operations managers have three main jobs:
- Implement operations strategy
- Achieve competitive advantage
- Increase productivity
Nine Categories of Operations Management Decisions
- Key decisions in operations management include:
- Product plans
- Competitive priorities
- Positioning strategies
- Location
- Technology choices
- Quality management and control
- Inventory management
- Materials management
- Master production scheduling
Operations Differentiation: 4 Vs
- Volume: Number of products/services.
- Variety: Different types of products/services.
- Variation: Demand fluctuations over time.
- Visibility: Extent of customers' interaction with internal operations.
Manufacturing VS Services
- Manufacturing organizations focus on tangible products.
- Service organizations focus on intangible outcomes.
- Key differences include tangibility, inventorability, customer contact, capital intensity, and response time. Inventory plays a role in manufacturing but not services.
Part 2: Metrics in Operations - Efficiency, Effectiveness & Productivity
- This part focuses on measures used to assess operations effectiveness.
- Effectiveness measures how well a business accomplishes intended goals, while efficiency measures how well it completes operations.
Defining the terms
- Effectiveness - Doing the right things
- Efficiency - Doing the right thing well.
- Productivity - The ratio of outputs (goods & services) to inputs (labor and capital).
Efficiency Versus Effectiveness
- A company can be efficient (well-executed strategy) but not effective (the right strategy)
- Efficiency without effectiveness reduces productivity
Productivity Challenge
- Productivity is the ratio of output to input (goods/services and labor/capital) and is used for process improvement.
Productivity Calculations
- Calculations show how labour productivity is determined.
Productivity Variables
- Key inputs to a business like Labor, Capital, and Management
Multi-Factor & Total Factor Productivity
- Multi-factor productivity considers various inputs including labor, materials, capital.
Productivity Tutorial Activity
- A practical example of productivity calculation
Part 3: Capacity Analysis
- Understanding capacity is key in managing operations.
- Capacity analysis refers to determining and understanding production capacity needs for various business products and processes.
Capacity Definitions
- Theoretical Capacity: Ideal capacity under flawless conditions.
- Normal Capacity: Average-period capacity accommodating a standard mix of products.
Process Times
- Time taken for various business operations.
Capacity Analysis
- Analysis of sandwich production lines shows how to calculate process times, bottleneck points (where processes are slowest) and capacity.
Examples of Capacity Analysis Scenarios
- A variety of scenario examples are provided, showing calculations involving customer service, checkout, and wrapping processes.
Improving Productivity
- Ways to improve productivity include increasing efficiency, expanding input while increasing output, achieving breakthroughs or innovations, and downsizing while maintaining output.
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Description
This quiz covers the essentials of operations management, focusing on the critical role of operations managers in planning, organizing, and controlling resources. It highlights the importance of operations in achieving competitive advantage and enhancing productivity. Participants will learn about various metrics and capacity analysis essential for effective operations.
