ASSIGNMENT #1

CHARLENE MAE S. ZAMBALE

INTRODUCTION TO OPERATIONS MANAGEMENT

1. Operations Management is
Operations Management is the set of activities that creates value in the form goods
and services by transforming inputs into outputs.OM involves planning, organizing and
supervising processes to make necessary improvement for higher profitability. It is concerned
with converting materials and labor into goods and services as efficiently as possible to
maximize the profit of an organization.

2. What are the three basic functions in business organizations?

A. Finance is a broad term that describes activities associated with banking, leverage
or debt, credit, capital markets, money and investments. Basically, finance represents money
management and the process of acquiring needed funds.

B. Operations is that of business organization that is responsible for producing goods

and services. Operations is the work of managing the inner workings of the business so it
runs as efficiently as possible. Whether making products, selling products, or providing
services, every small business owner has to oversee the design and management of behind-
the-scenes work.

C. Marketing refers to activities a company undertakes to promote the buying and

selling of a product or service. Marketing includes advertising, selling and delivering
products to consumers or other businesses. It is the Marketing’s job to reach out to prospects,
customers, investors and/or the community, while creating an overarching image that
represents your company in a positive light.

3. The operations function oversees a conversion process. Explain briefly.

The creation of goods and services involves transforming inputs into outputs. To
ensure the desired outputs are obtained, an organization takes measurements various points in
the transformation process or the feedback and then compares them with previously
established standards to determine whether corrective action is needed(control).

Operations Management transforms inputs (labor, capital, equipment, land, buildings,

materials and information) into outputs (goods and services) that provide added value to
customers. All organizations must strive to maximize the quality of their transformation
processes to meet customer needs.
4. What is meant by the term value-added?
The term used to describe the difference between the costs of input and the value or
price of outputs. Added value is the difference between the selling price and the cost of price
of a good or service. When a good or service is made more appealing, customers will usually
be willing to pay more. Therefore, adding value increases the amount of profit that a business
can make.

5. The majority of service jobs fall into about seven categories: Mention them.
A. Government
B. Wholesale/Retail
C. Financial Services
D. Healthcare
E. Personal Services
F. Business Services
G. Education

6. Name some ways that manufacturing systems and service systems differ.
Manufacturing is goods-centered while service is service-centered. Tangible items
versus Action oriented. First, manufacturing organizations produce physical, tangible goods
that can be stored in inventory before they are needed. By contrast, service organizations
produce intangible products that cannot be produce ahead of time. Manufacturing and
services are often similar in terms of what is done but different in terms of how it is done.

There are many implications due to the differences between service and
manufacturing operations. In a service firm, because the degree of customer is high, one has
to make sure that employees are better trained in customer service than employees in a
manufacturing industry are. In a pure service industry firm, we build a lot of slack in
scheduling because of the uncertainty of input.

7. Operations management professional make a decisions that affect the entire

organization. Briefly explain each of these categories.
What: What resources are needed and in what amounts?
When: When will each resource be needed? When should work be scheduled? When
should supplies be ordered?
Where: Where will the work be done?
How: How will the product or service be designed? How will the work be done?
How will resources be allocated?
Who: Who will do the work?

8. What are models, and what are some of the ways they are useful?
 A model is an abstraction of reality. Physical models look like their real-life
counterparts. Schematic models are more abstract than their physical physical counterparts;
they have less resemblance to the physical reality. Mathematical models are the most
abstract; they do not look at all like their real-life counterparts.

Models are beneficial. They are easy to use, less expensive. Models require users to
organize and quantify information. Models help increase the understanding of the problem.
Models are standardized format helpful for analyzing a problem.

9. What are trade-off decisions?

A trade-off is a situational decision that involves diminishing or losing one quality,
quantity, or property of a set or design in return for gains in other aspects. In simple terms, a
trade-off is where one thing increases, and another must decrease. It is an exchange where
you give up one thing in order to get something else that you also desire.

When deciding to take an action there are usually consequences of that action and
advantages and disadvantages of taking that action. In other words, before making a decision,
one must weigh the pros and cons of that decision. For example, if a decision maker decides
to increase the level of inventory, he or she has to consider the trade-off between increased
level of customer service and the additional inventory carrying cost.

10. What is a systems approach, and why is a system approach useful?

An organized enterprise does not exist in a vacuum, it is dependent on its external
environment; it is a part of larger systems such as the industry to which it belongs, the
economic system, and society. Thus, the enterprise receives inputs, transforms them, and
exports the outputs to the environment. However, this simple model needs to be expanded
and developed into a model of operational management that indicates how the various inputs
are transformed through the managerial functions of planning, organizing, staffing, leading,
and controlling. Clearly, any business or other organization must be described by an open
system model that includes interactions between the enterprise and its external environment.

11. What are some areas of ethical responsibility in the management of operations?
Reducing packaging, materials, water and energy use, and the environmental impact
of the supply chain, including buying locally; reconditioning used equipment and recycling.

12. Why is there a need for the various functional areas of an organization to
collaborate?
It is important for the various functional areas to collaborate because collaboration
will lead to improved communication among the departments (functions) that in turn will
improve the performance of the firm. Collaboration will reduce the chance of sub-
optimization by a functional area due to the possibility that a particular functional area does
not have enough information about the other areas and their constraints or decisions.

13. Explain these terms:

a. Craft Production. Craft Production is the process of manufacturing by hand with
or without the aid of tools. The term refers to a manufacturing technique applied in the
hobbies of handicraft but was also the common method of manufacture in the pre-
industrialized world , such as in the production of pottery.

b. Mass Production. Mass Production is the manufacturing of large quantities of

standardized products, often using assembly lines or automation technology. Mass
production facilitates the efficient production of a large number of similar products.

c. Division of Labor. Division of Labor, the separation of a work process into a

number of tasks, with each task performed by a separate person or group of persons. It is
most often applied to systems of mass production and is one of the basic organizing
principles of the assembly line.

d. Interchangeable Parts. Identical components that can be substituted one for

another, particularly important in the history of manufacturing. Mass production, which
transformed the organization of work, came about by the development of the machine-tool
industry by a series of 19th century innovators.

14. List the five major trends in business organizations.

A. The Internet, E-Commerce, E-Business
B. Management technology
C. Globalization
D. Management of Supply Chains
E. Agility

15. What is a supply chain and why is it important?

A supply chain is a network between a company and its suppliers to produce and
distribute a specific product to the final buyer. The supply chain also represents the steps it
takes to get the product or service from its original state to the customer. It is well known that
supply chain management is an integral part of most businesses and is essential to company
success and customer satisfaction.
Retailers depend on supply chains to quickly deliver expensive products to avoid
holding costly inventories in stores any longer than necessary. Manufacturers depend on
supply chains to reliably deliver materials to assembly plants to avoid material shortages that
would shutdown production. Firms value supply chain managers because they help control
and reduce supply chain costs.
 Lesser known, is how supply chain plays a critical role in society. Supply chain
knowledge and capabilities can be used to support medical missions, conduct disaster relief
operations, and handle other types of emergencies. Whether dealing with day-to-day product
flows or dealing with an unexpected natural disaster, supply chain experts roll up their
sleeves and get busy. They diagnose problems, creatively work around disruptions, and
figure out how to move essential products to people in need as efficiently as possible.

16. List seven continuing trends in business.

A. Ethical Behavior
B. Operations Strategy
C. Working with fewer resources
D. Cost control and productivity
E. Quality and process improvement
F. Increased regulation and product liability
G. Lean production

17. Explain the term lean production.

Lean production is an approach to management that focuses on cutting out waste,
whilst ensuring quality. It aims to cut costs by making the business more efficient and
responsive to market needs. The goals of lean production are to improve the quality products,
eliminate unnecessary wastes, reduce production times and reduce total costs.