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Some important observations business operations

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Unformatted text preview: er understood Values added to an entity when changed in space, in time, or even just in our mind Operations Management is the management (design, operation, and improvement) of the transformation processes that create value. Some important observations Business “operations” management has traditionally been associated with physical goods – Manufacturing and logistics, etc. Outputs can be goods (products), services, or more typically, a combination of the two Services may be divided into: – government: local, state, federal – wholesale and retail sales – other services: transportation, logistics, public utilities, communication, health, financial services, real estate, insurance, repair services, business services (e.g. consulting), education, personal services  ­ Services account for over 70% of GDP for rich countries OM and other business specialties  ­ Accountants – Understand basics of inventory management, capacity utilization, labor standards to develop accurate cost data, perform audits, and prepare financial reports  ­ Financial managers – Use inventory and capacity concepts to judge the need for capital investments, to forecast cash flow, and to manage current assets. Make decisions on procurment, plant expansion and relocation  ­ Marketing spets – Need to understand what operations can do: customer due date, product customization, new product introduction, marketing, etc.  ­ Personnel spets – How jobs are designed, the relationship between standards and incentive plans, and production skills needed  ­ MIS spets – Install operations information systems(often involved in design too).e.g. Production control  ­ Entrepreneurs – Often fail because they run out of working capital due to poor production planning and inventory management...
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