Introduction to Functional Areas of Management Unit 7
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What is the primary focus of Operations Management?

  • Managing human resources in an organization
  • Designing organizational structures
  • Developing marketing strategies for products
  • Creating goods and services through transformation of inputs into outputs (correct)

    • What is a key characteristic of production activities in service-oriented organizations?

  • Tangible goods are always produced
  • There is no transformation of inputs into outputs
  • There is no quality control
  • The production function may be less obvious (correct)

    • Who is credited with the early popularization of interchangeable parts in manufacturing?

  • Eli Whitney (correct)
  • Alfred Sloan
  • Fredrick Winslow Taylor
  • Henry Ford

    • What is the term used to describe the creation of goods and services through the transformation of inputs into outputs?

    <p>Operations management</p> Signup and view all the answers

    What is a common feature of goods and services produced in organizations?

    <p>They are both created through the transformation of inputs into outputs</p> Signup and view all the answers

    What is the primary outcome of production activities in service-oriented organizations?

    <p>Intangible goods</p> Signup and view all the answers

    What is the significance of operations management in organizations?

    <p>It is essential in all organizations that create goods and services</p> Signup and view all the answers

    What is the term used to describe the activities that create goods and services in organizations?

    <p>Operations</p> Signup and view all the answers

    Who is known as the father of scientific management?

    <p>Frederick W Taylor</p> Signup and view all the answers

    What was Henry Ford's contribution to Operations Management?

    <p>Developing the assembly line</p> Signup and view all the answers

    What is one of the four reasons to study Operations Management?

    <p>To understand what operations managers do</p> Signup and view all the answers

    Who contributed to the development of statistical sampling in quality control?

    <p>Walter Shewhart</p> Signup and view all the answers

    What is the significance of the assembly line in Operations Management?

    <p>It reduces production costs by using standardized parts</p> Signup and view all the answers

    What is the primary function of operations management in an organization?

    <p>To produce goods and services</p> Signup and view all the answers

    What is the relationship between operations management and other business functions?

    <p>OM is integrally related to all other business functions</p> Signup and view all the answers

    What is the significance of understanding operations management in an organization?

    <p>It helps to understand how goods and services are produced</p> Signup and view all the answers

    Who believed that management should do more to improve the work environment and processes?

    <p>W.Edwards Deming</p> Signup and view all the answers

    What percentage of an organization's revenue is typically spent in the operations management function?

    <p>A large percentage</p> Signup and view all the answers

    What is the outcome of Operations Management on an organisation?

    <p>It enhances service to society and improves profitability</p> Signup and view all the answers

    What are the basic functions of the management process?

    <p>Planning, organising, staffing, leading, and controlling</p> Signup and view all the answers

    Which of the following is NOT a function within an organisation?

    <p>Customer service</p> Signup and view all the answers

    What is the result of globalisation of world trade?

    <p>Greater access to global markets and resources</p> Signup and view all the answers

    What is the goal of Just-in-Time performance?

    <p>To reduce inventory levels</p> Signup and view all the answers

    Why do operations managers build long-term partnerships with suppliers?

    <p>Because suppliers supply up to 80% of the value of products</p> Signup and view all the answers

    What is the result of rapid international communication of news, entertainment, and lifestyles?

    <p>Shorter product life cycles</p> Signup and view all the answers

    What is the goal of mass customisation?

    <p>To produce individual products, whenever and wherever needed</p> Signup and view all the answers

    What is the outcome of empowered employees?

    <p>More competence at the workplace</p> Signup and view all the answers

    Why is Operations Management an exciting discipline?

    <p>Because the operations manager is confronted with an ever-changing environment</p> Signup and view all the answers

    What is a key difference between goods and services?

    <p>Services are intangible, while goods are tangible</p> Signup and view all the answers

    What is a characteristic of services that makes them difficult to standardize and automate?

    <p>High customer interaction</p> Signup and view all the answers

    What is an example of a knowledge-based service?

    <p>Educational services</p> Signup and view all the answers

    What is the productivity of land if the harvest tonnage increases from 1 to 1.5 tons per hectare?

    <p>50% increase</p> Signup and view all the answers

    Which group of carpenters has higher material productivity?

    <p>The first group that uses 4 metres of timber</p> Signup and view all the answers

    What is the definition of productivity?

    <p>The ratio of output to input</p> Signup and view all the answers

    What is the percentage increase in the number of bricks laid per day after the method was improved?

    <p>40%</p> Signup and view all the answers

    What is the difference between production and productivity?

    <p>Production is the conversion of raw materials into finished goods, while productivity is the ratio of output to input</p> Signup and view all the answers

    What is the output in the example of Bakers Bread?

    <p>Loaves of bread</p> Signup and view all the answers

    How much can a bricklayer lay per day?

    <p>500 bricks per day</p> Signup and view all the answers

    What happens to the machine productivity if the load and unload time is reduced from 3 minutes to 1 minute?

    <p>It increases by 25%</p> Signup and view all the answers

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

    <p>Workers</p> Signup and view all the answers

    How can a typist improve their productivity?

    <p>Enrol on a short course to improve typing skills</p> Signup and view all the answers

    What is a characteristic of services that makes them frequently dispersed?

    <p>They are frequently brought to the client/customer via a local office, a retail outlet, or even a house call</p> Signup and view all the answers

    What is a common mistake people make about productivity?

    <p>That it's only achieved by getting employees to work harder</p> Signup and view all the answers

    What is the first step in improving productivity?

    <p>Developing productivity measures for all operations</p> Signup and view all the answers

    What should be considered when deciding which operations to concentrate on for productivity improvement?

    <p>The system as a whole</p> Signup and view all the answers

    Why is it essential to measure productivity improvements and publicise them?

    <p>To identify areas that need further improvement</p> Signup and view all the answers

    Study Notes

    Introduction to Operations Management

    • Production is the creation of goods and services, and Operations Management (OM) is the set of activities that creates goods and services through the transformation of inputs into outputs.
    • OM activities take place in all organizations, including manufacturing firms and service providers like banks, hospitals, and airlines.

    History of Operations Management

    • The field of OM is relatively young, but its history is rich and interesting.
    • Key contributors to OM include:
      • Eli Whitney (1800): popularized interchangeable parts, standardization, and quality control in manufacturing.
      • Frederick W. Taylor (1881): father of scientific management, contributed to personnel selection, planning, and scheduling, motion study, and ergonomics.
      • Henry Ford and Charles Sorensen (1913): developed the assembly line concept.
      • Walter Shewhart (1924): combined statistics with quality control, providing the foundation for statistical sampling.
      • W. Edwards Deming (1950): believed management must do more to improve the work environment and processes to improve quality.

    Reasons to Study Operations Management

    • OM is one of the three major functions of any organization, along with marketing and finance.
    • Understanding OM helps us know how goods and services are produced.
    • Studying OM prepares students for careers in operations management.
    • OM is a costly part of an organization, and improving it can increase profitability and enhance service to society.

    Functions and Duties of Operations Managers

    • Operations managers perform the basic functions of the management process: planning, staffing, leading, organizing, and controlling.
    • Key decisions made by operations managers include:
      • Design of goods and services
      • Managing quality
      • Process and capacity design
      • Location strategy
      • Layout strategy
      • Human resources and job design
      • Supply chain management
      • Inventory management
      • Scheduling
      • Maintenance and reliability

    Operations and Productivity

    • There is a strong inter-relationship between the four major functions within an organization: marketing, production/operations, finance/accounting, and human resource management.
    • Productivity is a ratio of output to input, and can be affected by factors such as methods, capital, quality, technology, and management.
    • Global focus: rapid decline in communication and transportation costs has made global markets more accessible.
    • Just-in-time performance: reducing inventory at every level to improve response to dynamic changes in the marketplace.
    • Supply-chain partnering: building long-term partnerships with suppliers to improve supply chain management.
    • Rapid product development: using design technology to respond to rapid changes in material and process technology.
    • Mass customization: producing individual products to cater to individual customer whims.
    • Empowered employees: moving decision making to individual workers to improve competence and motivation.

    Operations in the Service Sector

    • The service sector is defined as including repair and maintenance, government, food and lodging, transportation, insurance, trade, finance, real estate, education, legal, medical, entertainment, and other professional occupations.
    • Differences between goods and services include:
      • Intangibility
      • Simultaneous production and consumption
      • Uniqueness
      • High customer interaction
      • Knowledge-based products
      • Dispersion
    • Operations management in the service sector involves transforming resources into products, establishing quality standards, designing and processing products on a schedule, and employing human resources.

    Productivity

    • Production is the conversion of raw materials into finished goods, while productivity is a ratio of output to input.
    • Productivity can be improved by:
      • Developing methods for achieving productivity improvements
      • Studying how other companies have improved productivity
      • Re-examining the way work is done
      • Establishing reasonable goals for improvement
      • Obtaining support of top management
      • Measuring improvements and publicizing them

    Factors that Affect Productivity

    • Methods
    • Capital
    • Quality
    • Technology
    • Management
    • Improving productivity can be achieved by:
      • Developing productivity measures for all operations
      • Finding bottleneck operations and improving them
      • Getting ideas from workers
      • Improving typing skills, replacing typewriters with computers, or outsourcing typing work.

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    Learn about the basics of Operations Management, including the creation of goods and services through the transformation of inputs into outputs.

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