study guide exam 1 - Buad 306 Exam 1 Important Topics Chap...

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Buad 306: Exam 1 Important Topics Chap 1: Introduction Operations and supply chains are intrinsically linked. Operations management: management of systems/processes that provide goods/services Supply chain: sequence of organizations that are involves in producing and delivering a product/service. Operations Process: Inputs Transformation Process Outputs Inputs: land, labor, capital, information Transformation process: transporting, storing, building, repairing. o Value Added – the essence of the operations function is to add value during the transformation process. Value added is used to describe the difference between the costs of inputs and the value/price of outputs. Outputs: goods/services. Goal is to satisfy customer and make a profit Evolution of the operations process: Add value to the transformation process Continually improve, meet or exceed customer needs Improve the process, decrease cost, improve efficiencies Example: Campbell soup – (transformation changed from condensed to not condensed, based off feedback), change to outputs: feedback; change to inputs: demand, technology, cost; change to transformation process: technology, automation, processes. Transformation Process: 1. Physical transformation: physical change to how it looks/how it is used o Ex: wood chair; cotton shirt 2. Logistical transformation: movement through the supply chain, changes in location o Moving objects from point A – point B (business to customer; factory to business) o Ex: shipping cocoa beans from rain forest to America for Starbucks to use 3. Exchange transformation: exchange of objects – paying money for a product/service o Ex: buy raw materials with cash 4. Physiological transformation: change in physical structure. Change in the product. o Ex: water bottle – smaller cap, changes in plastic material 5. Psychological transformation: change an individual’s thoughts/opinions o Ex: advertising (make them want to buy product) 6. Information transformation: research, development, gathering data, learning o Ex: conduct search on customer’s preferences *(Starbucks uses all of these transformation processes) Impacts of the transformation process: Demand (is it high or low) Materials Suppliers Schedules People Design Technology Cost considerations Related Functions in the transformation process : operations management works with all departments of an organization. Decision-making Inventory management Capacity planning Location selection Forecasting Project management
Buad 306: Exam 1 Important Topics Materials/suppliers Managing quality Capacity planning: process of determining the production company Process Management: key aspect of operation management Processes enable delivery of product and services to customers on a consistent basis o Ex: all Starbucks drinks are made exactly the same – Why? – because they have a process to make the same drink at all locations.

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