Goods vs Services in Operations Management

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9 Questions

Which of the following statements best describes the main difference between goods and services?

Goods are tangible, while services are intangible.

What historical event is associated with the introduction of the concept of division of labor in operations management?

Adam Smith's division of labor

Which operations management principle is linked to the idea of moving assembly lines?

Principles of scientific management by Fredrick Taylor

Which individual is associated with the Quality Revolution and the development of JIT (just-in-time) manufacturing?

Taiichi Ohno

What was a significant contribution of Operations Research in the 1950s?

Linear programming by George Dantzig

In the context of goods and services, what does 'customer contact' refer to?

The degree to which customers are directly involved in the service delivery.

'Interchangeable parts' introduced by Eli Whitney aimed to address which issue in manufacturing?

Low uniformity of input

What was a significant development in operations management associated with the Hawthorne studies conducted by Elton Mayo?

Motivation theories

Which concept is closely related to 'linear programming' in the field of operations research?

Decision theory

Study Notes

Manufacturing Organizations

  • Manufacturing organizations produce physical goods, whereas service organizations produce nonphysical outputs.

Goods vs Services

  • Goods have tangible outputs, low customer contact, low labor content, high uniformity of input, easy measurement of productivity, and opportunities to correct problems before delivery.
  • Services have intangible outputs, high customer contact, high labor content, low uniformity of input, difficult measurement of productivity, and few opportunities to correct problems before delivery.

Historical Events in Operations Management

Industrial Revolution

  • 1769: James Watt invented the steam engine.
  • 1776: Adam Smith introduced the concept of division of labor.
  • 1790: Eli Whitney introduced interchangeable parts.

Scientific Management

  • 1911: Fredrick Taylor developed principles of scientific management.
  • 1911: Frank and Lilian Gilbreth conducted time and motion studies.
  • 1912: Henry Gantt developed the activity scheduling chart.
  • 1913: Henry Ford introduced the moving assembly line.

Human Relations

  • 1930: Elton Mayo conducted the Hawthorne studies.
  • 1940s: Abraham Maslow developed motivation theories.
  • 1950s: Frederick Herzberg developed motivation theories.
  • 1960s: Douglas McGregor developed motivation theories.

Operations Research

  • 1947: George Dantzig developed linear programming.
  • 1951: Remington Rand introduced the digital computer.
  • 1950s: Simulation, waiting line theory, decision theory, and PERT/CPM were developed.
  • 1960s and 1970s: Operations research groups, MRP, EDI, EFT, and CIM were developed by Joseph Orlicky, IBM, and others.

Quality Revolution

  • 1970s: Taiichi Ohno (Toyota) developed just-in-time (JIT) production.
  • 1980s: Total quality management (TQM) was developed.

Test your knowledge on the differences between goods and services in operations management for manufacturing and service organizations. Learn about characteristics, outputs, customer contact, labor content, and more.

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