Operations Management Quiz

Chapter 1: Introduction to Operations Management

• Operations management is the management of systems and processes that create goods and/or provide services.
• Operations is the part of a business organization responsible for producing goods or services.
• Supply chain is a sequence of activities and organizations involved in producing and delivering a good or service.

Chapter 1: Learning Objectives

• Define the terms operations management and supply chain.
• Identify similarities and differences between production and service operations.
• Explain the importance of learning about operations management.
• Identify the three major functional areas of organizations and explain how they interrelate.
• Summarize the two major aspects of process management.
• Describe the operations function and the nature of the operations manager's job
• Explain the key aspects of operations management decision making.
• Briefly describe the historical evolution of operations management.
• Describe the current issues in business that impact operations management.
• Explain the importance of ethical decision making
• Explain the need to manage the supply chain.

Goods or Service?

• Goods are physical items (automobile, computer, oven, shampoo).
• Services are activities that provide a combination of time, location, form or psychological value (air travel, education, haircut, legal counsel).

Supply Chain

• A chain of activities and organizations involved in producing and delivering a good or service.
• Typical components include suppliers' suppliers, direct suppliers, producers, distributors, and final customers.

The Transformation Process

• Inputs (land, labor, capital, information) are transformed into outputs (goods and services).
• Feedback and measurement at various points in the process are essential for control and improvement.

Goods-Service Continuum

• Products are typically neither purely service- or purely goods-based.
• Various examples of products and services are listed in order of the goods-service continuum.

Illustrations of the Transformation Process (Table 1.2)

• Examples show how inputs are transformed to outputs, demonstrating the process in different sectors.

Manufacturing vs. Service (Table on page 9)

• Comparing manufacturing and service operations based on characteristics like customer contact, labor content, input uniformity, output uniformity, productivity measurement, quality assurance, inventory amount, work evaluation, and patentability.

Typical Differences between Production of Goods and Provision of Services (Table 1.3)

• Summarizes key characteristics differentiating goods from services, including tangibility of output, level of customer contact, labor intensity, input uniformity, productivity measurement, and potential for corrective actions.

Degree of Customization

• High customization typically involves more labor, time, skilled labor, and flexible equipment.
• Products/services are less standardized and can result in higher prices but affect other departments. The degree of customization is important to the entire organization.

Why Study Operations Management?

• Every business aspect is impacted.
• Many service jobs are directly related to the operations.

Function Overlap (Table on page 14 and page 13)

• Operations, Finance, and Marketing functions in an organization often overlap by sharing information and interfacing to make cooperative decisions.
• Examples illustrating the overlap
• Understand the role of others in the organization.

OM and Supply Chain Career Opportunities

• A list of available career opportunities

Process Management (LO 1.5)

• Processes transform inputs into outputs and fall into three categories: Upper-management processes, Operational processes, and Supporting processes.

Supply & Demand (LO 1.5)

• Illustrates the relationship between supply and demand.

Scope of Operations Management (LO 1.6)

• Operations function encompasses diverse interdependent activities to create goods and services.
• Activities include Forecasting, Capacity Planning, Facility Location, Layout Planning, Scheduling, Inventory Management, Quality Assurance, and Employee Motivation.

Role of the Operations Manager (LO 1.6)

• Operations managers guide system operation through decision making.
• System design decisions (e.g., capacity, facility location, layout, product planning)
• System operation decisions (e.g., personnel management, inventory control, scheduling, quality assurance).

System Design Decisions (LO 1.6)

• Defines strategic decisions in operations management, such as capacity, facility location and layout, and product and service planning. A crucial aspect of managing the long-term resources.

System Operation Decisions (LO 1.6)

• Focuses on the tactical and operational decisions in operations management, such as personnel management, inventory management, scheduling, and quality assurance.

OM Decision Making (LO 1.7)

• Typical operations decisions involve considering various alternatives and their impact on costs and profits.

General Approach to Decision Making (LO 1.7)

• Models are important tools in decision-making, abstracting real-world complexities.

Benefits of Models (LO 1.7)

• Models are easier to use, less expensive, more organized, provide standardized formats, and enhance problem understanding.

Metrics and Trade-Offs (LO 1.7)

• Performance metrics enable managers to monitor and control operations. Crucially, they include Trade-offs, such as higher inventory levels potentially impacting customer service.

Establishing Priorities (LO 1.7)

• Managers prioritize issues according to criticality, with the Pareto principle representing a useful tool for guiding decision-making.

Historical Evolution of OM (LO 1.8)

• Key historical periods of operations management, including the Industrial Revolution, Scientific Management, Human Relations movement, use of decision models (management science), and Japanese influence.

Industrial Revolution (LO 1.8)

• Details the key events and developments during the pre-industrial era, focusing on early manufacturing advancements.

Scientific Management (LO 1.8)

• Emphasizes the importance of using scientific methods to improve organizational efficiency, worker training, and job planning as led by Frederick Winslow Taylor.

Human Relations Movement (LO 1.8)

• Highlights the importance of human factors in job design, introducing concepts like worker motivation (e.g., Maslow, Herzberg, McGregor), and applications in psychology.

Decision Models & Management Science (LO 1.8)

• Explains how mathematical models (e.g., inventory management, statistical process control) were introduced and further developed to guide operations decision-making.

Influence of Japanese Manufacturers (LO 1.8)

• Briefly summarizes the impacts of Japanese manufacturing on improving management techniques with an emphasis on quality and efficiency. Their practices influenced production.

Operations Today (LO 1.9)

• Summarizing current challenges and opportunities associated with operations management.

Key Issues for Operations Managers Today (LO 1.10)

• Identifying current economic, innovation, quality, risk, cyber security, and global competition challenges in operations management.

Environmental Concerns (LO 1.10)

• Discusses sustainability in operations, encompassing environmental, social, and economic measures to guide operations decisions.

Ethical Decision Making (LO 1.10)

• Briefly defines ethics and how many organizations have implemented frameworks to help with employee conduct.

Ethical Issues in Operations (LO 1.10)

• Lists key ethical issues arising in various aspects of operations management including financial statements, worker and product safety, quality, environmental and community considerations, hiring/firing practices, and worker rights.

The Need for Supply Chain Management (LO 1.11)

• Describes how poor supply chain management in the past created significant problems.

Supply Chain Issues (LO 1.11)

• Operational challenges related to supply chain management such as, improving operations, Increasing outsourcing, increasing transportation costs, competitive pressures, increasing globalization, increasing importance of e-commerce, the complexity of supply chains and inventory management.

Test your knowledge on the key concepts of Operations Management. This quiz covers definitions, characteristics, and major functional areas related to goods and services. Evaluate your understanding of process management and the distinct features of operational systems.