Introduction to Functional Areas of Management Unit 7

Questions and Answers

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?

Operations management Signup and view all the answers

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

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

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

Intangible goods Signup and view all the answers

What is the significance of operations management in organizations?

It is essential in all organizations that create goods and services Signup and view all the answers

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

Operations Signup and view all the answers

Who is known as the father of scientific management?

Frederick W Taylor Signup and view all the answers

What was Henry Ford's contribution to Operations Management?

Developing the assembly line Signup and view all the answers

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

To understand what operations managers do Signup and view all the answers

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

Walter Shewhart Signup and view all the answers

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

It reduces production costs by using standardized parts Signup and view all the answers

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

To produce goods and services Signup and view all the answers

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

OM is integrally related to all other business functions Signup and view all the answers

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

It helps to understand how goods and services are produced Signup and view all the answers

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

W.Edwards Deming Signup and view all the answers

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

A large percentage Signup and view all the answers

What is the outcome of Operations Management on an organisation?

It enhances service to society and improves profitability Signup and view all the answers

What are the basic functions of the management process?

Planning, organising, staffing, leading, and controlling Signup and view all the answers

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

Customer service Signup and view all the answers

What is the result of globalisation of world trade?

Greater access to global markets and resources Signup and view all the answers

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

To reduce inventory levels Signup and view all the answers

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

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

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

Shorter product life cycles Signup and view all the answers

What is the goal of mass customisation?

To produce individual products, whenever and wherever needed Signup and view all the answers

What is the outcome of empowered employees?

More competence at the workplace Signup and view all the answers

Why is Operations Management an exciting discipline?

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

What is a key difference between goods and services?

Services are intangible, while goods are tangible Signup and view all the answers

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

High customer interaction Signup and view all the answers

What is an example of a knowledge-based service?

Educational services 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?

50% increase Signup and view all the answers

Which group of carpenters has higher material productivity?

The first group that uses 4 metres of timber Signup and view all the answers

What is the definition of productivity?

The ratio of output to input Signup and view all the answers

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

40% Signup and view all the answers

What is the difference between production and productivity?

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

What is the output in the example of Bakers Bread?

Loaves of bread Signup and view all the answers

How much can a bricklayer lay per day?

500 bricks per day 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?

It increases by 25% Signup and view all the answers

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

Workers Signup and view all the answers

How can a typist improve their productivity?

Enrol on a short course to improve typing skills Signup and view all the answers

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

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

What is a common mistake people make about productivity?

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

What is the first step in improving productivity?

Developing productivity measures for all operations Signup and view all the answers

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

The system as a whole Signup and view all the answers

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

To identify areas that need further improvement 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.

Exciting New Trends in Operations 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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Description

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