Study guide midterm 1

Study guide midterm 1 - CHAPTER 1: introduction to...

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CHAPTER 1: introduction to operations management What is operations? The part of a business organization that is responsible for producing goods or services The management of systems or processes that create goods and/or provide services Supply > Demand =wasteful costly Supply < Demand = opportunity loss, customer dissatisfaction Supply = Demand = ideal Basic functions of the business Organization: Marketing, operations, Finance Supply Chain Definition: a sequence of activities and organizations involved in producing and delivering a good or service Suppliers’ suppliers direct suppliers producer distributor final customers The transformation process Feedback- measurements taken at various points in the transformation process Control- the comparison of feedback against previously established standards to determine if corrective action is needed Control: Inputs: land, labor, capital, information Transformation/ conversion process Outputs: goods, services Goods-service Continuum Products are typically neither purely service- or purely goods based Manufacturing vs. service Manufacturing and service organizations differ chiefly because manufacturing is goods-oriented and service is act-oriented Challenges of managing services: 1. Jobs in services are often less structured than in manufacturing 2. Customer contact is generally much higher in services compared to manufacturing 3. In many services, worker skill levels are low compared to those of manufacturing employees 4. Services are adding many new workers in low-skill, entry-level positions 5. Employee turnover is high in services, especially in low-skill jobs 6. Input variability tends to be higher in many service environments than in manufacturing 7. Service performance can be adversely affected by many factors outside of the manager’s control (e.g., employee and customer attitudes) Process management Process- one or more actions that transform inputs into outputs Three categories of business processes: 1. Upper management processes- these govern the operation of the entire organization 2. Operational processes- these are core processes that make up the value stream 3. Supporting processes- these support the core processes. Process variation Variations can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems Four sources of variation: 1. Variety of goods and services being offered- the greater the variety of goods and services offered, the greater the variation in production or service requirements 2. Structural variation in demand- these are generally predictable. They are important for capacity planning
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3. Random variation- natural variation that is present in all processes. Generally, it cannot be influenced by managers 4. Assignable variation- variation that has identifiable sources. This type of variation can be
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This note was uploaded on 07/14/2011 for the course IDS 355 taught by Professor Naiman during the Spring '06 term at Ill. Chicago.

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Study guide midterm 1 - CHAPTER 1: introduction to...

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