CHAPTER 1: INTRODUCTION TO
OPERATIONS MANAGEMENT 2026 STUDY
GUIDE QUESTIONS AND VERIFIED
CORRECT SOLUTIONS 100% PASS
What is operations?
The part of a business organization that is responsible for producing goods or services.
Operations Management
The management of systems or processes that create goods and/or provide services.
*) Convert RM, and Lapro (input) to product either goods or services.
Goods
*) are physical items that include raw materials, parts, subassemblies, and final products.
Example:
1. Automobile
2. Computer
3. Oven
4. Shampoo
Services
*) Activities that provide some combination of time, location, from, and psychological value.
*) Example: Every book you read, every video you watch, every e-mail you send, every
telephone conversation you have, and every medical treatment you receive.
1. Air travel
,2. Education
3. Haircut
4. Legal counsel
Supply and Demand
1. The ideal situation for a business organization is to achieve a match of supply and demand.
2. Supply > Demand is wasteful and means lost opportunity.
3. Supply < Demand is costly and possible customer dissatisfaction.
Business organizations have three basic functional areas
*) Finance, Marketing, and Operations.
It doesn't matter whether the business is a retail store, a hospital, a manufacturing firm, a car
wash, or some other type of business; all business organizations have these three basic functions.
Finance is responsible
for securing financial resources at favorable prices and allocating those resources throughout the
organization, as well as budgeting, analyzing investment proposals, and providing funds for
operations
Marketing and Operations
are the primary, or "line," functions.
Marketing is responsible
for assessing consumer wants and needs, and selling and promoting the organization's goods or
services.
, Operations is responsible
for producing the goods or providing the services offered by the organization.
*) Operations management is responsible for managing that core.
Supply Chain
A sequence of activities and organizations involved in producing and delivering a good or
service.
Supply chain sequences
1. The sequence begins with basic suppliers of raw materials and extends all the way to the final
customer.
2. Facilities might include warehouses, factories, processing centers, offices, distribution centers,
and retail outlets.
3. Functions and activities include forecasting, purchasing, inventory management, information
management, quality assurance, scheduling, production, distribution, delivery, and customer
service.
*) Notice that the value of the product increases as it moves through the supply chain.
Supply chains are both external and internal to the organization.
*) The external parts of a supply chain provide raw materials, parts, equipment, supplies, and/or
other inputs to the organization, and they deliver outputs that are goods to the organization's
customers.
*) The internal parts of a supply chain are part of the operations function itself, supplying
operations
with parts and materials, performing work on products and/or services, and passing the work on
to the next step in the process.
OPERATIONS MANAGEMENT 2026 STUDY
GUIDE QUESTIONS AND VERIFIED
CORRECT SOLUTIONS 100% PASS
What is operations?
The part of a business organization that is responsible for producing goods or services.
Operations Management
The management of systems or processes that create goods and/or provide services.
*) Convert RM, and Lapro (input) to product either goods or services.
Goods
*) are physical items that include raw materials, parts, subassemblies, and final products.
Example:
1. Automobile
2. Computer
3. Oven
4. Shampoo
Services
*) Activities that provide some combination of time, location, from, and psychological value.
*) Example: Every book you read, every video you watch, every e-mail you send, every
telephone conversation you have, and every medical treatment you receive.
1. Air travel
,2. Education
3. Haircut
4. Legal counsel
Supply and Demand
1. The ideal situation for a business organization is to achieve a match of supply and demand.
2. Supply > Demand is wasteful and means lost opportunity.
3. Supply < Demand is costly and possible customer dissatisfaction.
Business organizations have three basic functional areas
*) Finance, Marketing, and Operations.
It doesn't matter whether the business is a retail store, a hospital, a manufacturing firm, a car
wash, or some other type of business; all business organizations have these three basic functions.
Finance is responsible
for securing financial resources at favorable prices and allocating those resources throughout the
organization, as well as budgeting, analyzing investment proposals, and providing funds for
operations
Marketing and Operations
are the primary, or "line," functions.
Marketing is responsible
for assessing consumer wants and needs, and selling and promoting the organization's goods or
services.
, Operations is responsible
for producing the goods or providing the services offered by the organization.
*) Operations management is responsible for managing that core.
Supply Chain
A sequence of activities and organizations involved in producing and delivering a good or
service.
Supply chain sequences
1. The sequence begins with basic suppliers of raw materials and extends all the way to the final
customer.
2. Facilities might include warehouses, factories, processing centers, offices, distribution centers,
and retail outlets.
3. Functions and activities include forecasting, purchasing, inventory management, information
management, quality assurance, scheduling, production, distribution, delivery, and customer
service.
*) Notice that the value of the product increases as it moves through the supply chain.
Supply chains are both external and internal to the organization.
*) The external parts of a supply chain provide raw materials, parts, equipment, supplies, and/or
other inputs to the organization, and they deliver outputs that are goods to the organization's
customers.
*) The internal parts of a supply chain are part of the operations function itself, supplying
operations
with parts and materials, performing work on products and/or services, and passing the work on
to the next step in the process.
