OM Chapter 1: Intro to OM

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. This increased level of _____________ is leading to increased emphasis on ____________ management.

outsourcing; supply chain

In order to increase value, an organization must:

decrease price or cost while holding perceived benefits constant.

Which of the following is a similarity between goods and services?

Both can be standardized for the mass market or customized to individual needs

! Organizational functional areas that interface with OM 3 Basic Functions of Business Organizations

Finance, Operations, Marketing The major functional areas must interact to achieve the organization's goals Marketing - responsible for assessing customer wants and need (demand) Operations - need info about demand over the short to intermediate term e.g. purchase materials or schedule work or product design Finance - info on what funds might be available (short term) and what funds might be needed for new products or services (intermediate to long term)

Included in the general management process in a business?

General management processes in a business include accounting and information systems, human resource management, and marketing.

Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's

Internal supply chain

Which of the following is not an element of supply chain management?

Logistics XXXXXXXX Operations Customers Location Operations is a function, not an element, of supply chain management. Customers and logistics are key elements in supply chain management. Processing occurs within each component of the supply chain. Location is a major decision in supply chain management, due to the decisions of where to establish production and distribution facilities and locations' effectiveness or ineffectiveness.

Supply Chain

OM and supply chain are directly linked = the sequence of the organizations and activities that are directly involved in producing and delivering a good/service Suppliers' suppliers, direct suppliers, producer, distributor, final customers a network of facilities and processes that describes the flow of materials, finished goods, services, information, and financial transactions from suppliers, through the facilities and processes that create goods and services, and those that deliver them to the customer.

Which of the following statements is true of operations management (OM)?

OM is the only function by which managers can directly affect the value provided to all stakeholders

! Importance of Operations Management

Operations = the part of a business organization that is responsible for producing goods or services OM = The management of systems or processes that create goods and/or provide services OM ransforms inputs to outputs Forecasting Strategic planning Capacity planning Locating facilities Facilities and layout Scheduling Managing inventories Assuring quality

! Differences between OM with products and service

SERVICES Intangible product Product cannot be inventoried High customer contact Short response time Labor intensive Variability in inputs Shorter forecasting horizons GOODS Tangible product Product is inventoried Low customer contact Longer response time Capital intensive Uniform inputs Longer forecasting horizons

________ refers to an organization's ability to strategically address current business needs and successfully develop a long-term strategy that embraces opportunities and manages risk for all products, systems, supply chains, and processes to preserve resources for future generations.

Sustainability

Which of the following is the least likely decision to be made by Operations Managers?

a) How to use quality techniques to reduce waste b) XXXX Deciding which market areas to manufacture products for c) Selecting the location and layout of a facility d) How much capacity is required to balance demand

Which of the following statements is true of service facilities?

a) XXXX They need to be in close proximity to customers. b) They store their services as physical inventory. c) They require employees with stronger technical skills than behavioral skills. d) They rely more on hard technology than soft technology to perform work.

The essence of the operations function is to _____ during the transformation process.

add value

If one organization is better able than most to respond to changes in demands or opportunities, we say that organization exhibits higher _________

agility

A _____ is a sequence of activities that is intended to create a certain result, such as a physical good, a service, or information.

process