lOMoAR cPSD| 63316909
Chapter 1
What is Operations Management?
The set of activities that create value in the form of goods and services by transforming
inputs into outputs
―Creating value by efficiently/effectively transforming inputs into outputs
What are the 3 main functions of any business?
Marketing (generates demand), Finance/Accounting (Tracks how well the organization
is doing, pay bills, collects the money) Operation/Production (creates, produces and
delivers the product)
What types of decisions do Operations Managers make?
10 OM Decisions
1) Design of goods and services
2) Managing Quality
3) Process and capacity design
4) Location and Strategy
5) Layout strategy
6) Human resources and job design
7) Supply-chain management
8) Inventory management
9) Scheduling
10)Maintenance
Differences between goods and services
Productivity – What is it? How is it calculated?
―Single- and Multi-factor productivity calculations
Productivity is the measure of process improvement, represents output relative to input.
Single Factor: (Units Produced)/(Labor hours used)
, lOMoAR cPSD| 63316909
Multifactor: (Output)/(Labor + Material + Energy + Capital + Misc)
Percent Change: (New - Old) / (Old)
Which 3 factors affect productivity?
Not sure on this one*** Quality( may change while the quantity of inputs remains
constant. External Elements (may cause an increase or decrease in productivity.
Precise Units of Measure (may be lacking)
Chapter 2
A global view of operations
―Examples of global companies Sony - Headquartered in Japan, but have
manufacturers across the world
Volvo- Sweedish company, but actually owned by a chinese company, but operates
across the world
Haier- Chinese Company, Owns GE appliances, Haier produces products in Lexington
Kentucky that they sell across the entire world
Boeing
―Why companies choose to expand globally
6 reasons domestic business operations decide to change to some form of international
operation
1) Improve the supply chain by locating in countries with unique resources
available
2) Reduce costs (lower direct costs, Trade agreements help reduce tariffs)
3) Improve Operations (Learn from management innovations in other countries,
Reduce Response time to customer’s needs)
4) Understand Markets (Interaction with global customers and suppliers can lead to
new opportunities, Extend product life style i.e how long people are willing to
purchase it)
5) Improve Products (Sharing ideas across industries and around the globe helps
firms develop/create better goods and services)
6) Attract and retain global talent (More Job opportunities for growth and protection
from economic downturn)
Developing mission and supporting strategies
Mission Statement: tells an organization where it is going
Strategy: Tells the organization how it will get there
Chapter 1
What is Operations Management?
The set of activities that create value in the form of goods and services by transforming
inputs into outputs
―Creating value by efficiently/effectively transforming inputs into outputs
What are the 3 main functions of any business?
Marketing (generates demand), Finance/Accounting (Tracks how well the organization
is doing, pay bills, collects the money) Operation/Production (creates, produces and
delivers the product)
What types of decisions do Operations Managers make?
10 OM Decisions
1) Design of goods and services
2) Managing Quality
3) Process and capacity design
4) Location and Strategy
5) Layout strategy
6) Human resources and job design
7) Supply-chain management
8) Inventory management
9) Scheduling
10)Maintenance
Differences between goods and services
Productivity – What is it? How is it calculated?
―Single- and Multi-factor productivity calculations
Productivity is the measure of process improvement, represents output relative to input.
Single Factor: (Units Produced)/(Labor hours used)
, lOMoAR cPSD| 63316909
Multifactor: (Output)/(Labor + Material + Energy + Capital + Misc)
Percent Change: (New - Old) / (Old)
Which 3 factors affect productivity?
Not sure on this one*** Quality( may change while the quantity of inputs remains
constant. External Elements (may cause an increase or decrease in productivity.
Precise Units of Measure (may be lacking)
Chapter 2
A global view of operations
―Examples of global companies Sony - Headquartered in Japan, but have
manufacturers across the world
Volvo- Sweedish company, but actually owned by a chinese company, but operates
across the world
Haier- Chinese Company, Owns GE appliances, Haier produces products in Lexington
Kentucky that they sell across the entire world
Boeing
―Why companies choose to expand globally
6 reasons domestic business operations decide to change to some form of international
operation
1) Improve the supply chain by locating in countries with unique resources
available
2) Reduce costs (lower direct costs, Trade agreements help reduce tariffs)
3) Improve Operations (Learn from management innovations in other countries,
Reduce Response time to customer’s needs)
4) Understand Markets (Interaction with global customers and suppliers can lead to
new opportunities, Extend product life style i.e how long people are willing to
purchase it)
5) Improve Products (Sharing ideas across industries and around the globe helps
firms develop/create better goods and services)
6) Attract and retain global talent (More Job opportunities for growth and protection
from economic downturn)
Developing mission and supporting strategies
Mission Statement: tells an organization where it is going
Strategy: Tells the organization how it will get there
