GMS401 MIDTERM 1 EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED
Management
- Management is a process by which objectives are achieved through the use of
resources
- Management always involves dealing with conflicting objectives and limited resources
Operations
Operations are those activities within an organization that are directly related to
providing goods or services to customers.
Operations Management
Operations management is the transformative process of converting inputs into outputs
(the final product and/or service). The key to OM is how the set of activities create value
by utilizing inputs in order to produce a final product/service
Organizing to Produce Goods and Services
Essential Functions:
Marketing - generates demand
Production/operations - creates the product
Finance/accounting - tracks how well the organization is doing, pays bills, collects the
money
Why Study OM?
,- OM is one of three major functions of any organization. We want to study how people
organize themselves for productive enterprise
- We want (and need) to know how goods and services are produced
- We want to understand what operations managers do
- OM is such a costly part of an organization. (Thought: if operations (production,
distribution, etc.) are not executed efficiently and effectively the business will suffer the
burden of a loss in their investment/enterprise/customers)
What Operation Managers Do
Basic Management Functions:
- Planning
- Organizing
- Staffing
- Leading
- Controlling - if your employees are stealing from you always look for an employee that
never takes a vacation. A good manager will put controls (and prepare for the worst
case scenario) into place to minimize conflict such as theft in the workplace.
Where are the OM Jobs?
- Technology/methods
- Facilities/space utilization
- Strategic issues
- Response time
- People/team development
Operations Function
,1. Inputs:
- Land
- Labour Capital
2. Transformation Process (most significant function b/c there is a significant amount of
value added to the initial input that will become a useful product or service)
3. Outputs:
- Goods
- Services
Differentiating Features of Operation Systems
- Degree of product standardization (standardized or customized)
- Type of process (quantity of output)
- Production of goods vs. services - A belt is worth $9,000. Why? This is a result of the
brand name, which convinces customers that the belt should be worth that price,
however, is it truly worth that price? * It is important to understand the true worth of a
product or service as an operations manager
- Customized products are more costly because they are not a part of the assembly line
(where a series of identical items are manufactured)
- Marketing is about converting people's' wants into needs
Characteristics of Manufacturing Operations
- Physical conversion of "raw materials" into "finished goods" (primary value added)
- Manufacturers usually purchase the inputs and sells the outputs
- Production approaches: make-to-order, make-to-stock, fabricate-to-stock & assemble-
to-order
, - Basic Manufacturing Process Types:
1. Project
2. Job shop
3. Batch process
4. Assembly line
5. Continuous process
Pareto Phenomenon
- This is also known as the "Pareto principle" and the "80-20" rule
- Pareto was a 19th century Italian economist who observed that 80% of wealth in Italy
was held by 20% of the citizens (sometimes referred to as the "vital few"), while only
20% of the wealth was held by 80% of the population (the "trivial many")
- This type of relationship has been observed in a wide range of situations, including
operations
Efficiency
- Efficiency means doing the job well with a small amount of wasted resources
- Efficiency = doing the job well
- Effective = doing the right thing
- A job well done helps us be efficient; developing and using the correct strategy helps
us be effective
How to Increase Productivity
- Cutting costs = increasing productivity
- Having better methods improves productivity (refining the process to increase
WITH COMPLETE SOLUTIONS VERIFIED
Management
- Management is a process by which objectives are achieved through the use of
resources
- Management always involves dealing with conflicting objectives and limited resources
Operations
Operations are those activities within an organization that are directly related to
providing goods or services to customers.
Operations Management
Operations management is the transformative process of converting inputs into outputs
(the final product and/or service). The key to OM is how the set of activities create value
by utilizing inputs in order to produce a final product/service
Organizing to Produce Goods and Services
Essential Functions:
Marketing - generates demand
Production/operations - creates the product
Finance/accounting - tracks how well the organization is doing, pays bills, collects the
money
Why Study OM?
,- OM is one of three major functions of any organization. We want to study how people
organize themselves for productive enterprise
- We want (and need) to know how goods and services are produced
- We want to understand what operations managers do
- OM is such a costly part of an organization. (Thought: if operations (production,
distribution, etc.) are not executed efficiently and effectively the business will suffer the
burden of a loss in their investment/enterprise/customers)
What Operation Managers Do
Basic Management Functions:
- Planning
- Organizing
- Staffing
- Leading
- Controlling - if your employees are stealing from you always look for an employee that
never takes a vacation. A good manager will put controls (and prepare for the worst
case scenario) into place to minimize conflict such as theft in the workplace.
Where are the OM Jobs?
- Technology/methods
- Facilities/space utilization
- Strategic issues
- Response time
- People/team development
Operations Function
,1. Inputs:
- Land
- Labour Capital
2. Transformation Process (most significant function b/c there is a significant amount of
value added to the initial input that will become a useful product or service)
3. Outputs:
- Goods
- Services
Differentiating Features of Operation Systems
- Degree of product standardization (standardized or customized)
- Type of process (quantity of output)
- Production of goods vs. services - A belt is worth $9,000. Why? This is a result of the
brand name, which convinces customers that the belt should be worth that price,
however, is it truly worth that price? * It is important to understand the true worth of a
product or service as an operations manager
- Customized products are more costly because they are not a part of the assembly line
(where a series of identical items are manufactured)
- Marketing is about converting people's' wants into needs
Characteristics of Manufacturing Operations
- Physical conversion of "raw materials" into "finished goods" (primary value added)
- Manufacturers usually purchase the inputs and sells the outputs
- Production approaches: make-to-order, make-to-stock, fabricate-to-stock & assemble-
to-order
, - Basic Manufacturing Process Types:
1. Project
2. Job shop
3. Batch process
4. Assembly line
5. Continuous process
Pareto Phenomenon
- This is also known as the "Pareto principle" and the "80-20" rule
- Pareto was a 19th century Italian economist who observed that 80% of wealth in Italy
was held by 20% of the citizens (sometimes referred to as the "vital few"), while only
20% of the wealth was held by 80% of the population (the "trivial many")
- This type of relationship has been observed in a wide range of situations, including
operations
Efficiency
- Efficiency means doing the job well with a small amount of wasted resources
- Efficiency = doing the job well
- Effective = doing the right thing
- A job well done helps us be efficient; developing and using the correct strategy helps
us be effective
How to Increase Productivity
- Cutting costs = increasing productivity
- Having better methods improves productivity (refining the process to increase
