Operations Management is management of system or processes that create goods or provide service. The term operations management includes interrelated activities such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, and deciding where to locate facilities and more. 2. Identify the three major functional areas of business organization and briefly describe how they interrelate? Answer: The three major functional areas of business are finance, operations and marketing.
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. Moreover, operations function is responsible for producing products and delivering services and it needs the support as well as input from others areas of the organization such as finance and marketing. And finally, marketing is responsible for assessing consumer wants and needs, as well as selling and promoting goods or services.
Marketing and Operations are the primary or line function. 3. Describe the operations function and the nature of the operations manager’s job? Answer: Operations is responsible for producing the goods or providing the service offered by the organization. Therefore, the nature of the operations manager’s job is to guide the system by decision making. Certain decision affects the design of the system, and others affect the operation of the system. System design involves decisions that relate to system capacity, the geographic location of the facilities and acquisition of equipment.
4. List five important differences between goods production and service operation; then list five important similarities? Answer: Five important differences between good production and service operation are degree of customer contact, uniformity of input, labor content of jobs, uniformity of output and measurement of productivity. Five important similarities: both goods production and service operation involve design and operating decisions. Goods production must decide what size factory is needed and service operations must decide what size building is needed.
Both must make decisions on location, work schedules, capacity and allocation of scare resources. 5. Briefly discuss each of these term related to the historical evolution of operations management: industrial revolution, scientific management, interchangeable parts and division of labor. Answer: Industrial Revolution began in 1770s in England and spread to the rest of Europe and to the United States during the 19th century. Then, a number of innovations in the 18th century changed the face of the production forever by substituting machine power for human power.
A major change occurred that gave the Industrial Revolution a boost: the development of standard gauging systems. This greatly reduced the need for custom-made goods. Factories began to spring up and grow rapidly, providing the jobs for the countless people who were attracted in large number form rural areas. Scientific Management era brought widespread changes to the management of the factories. The movement was spearheaded by the efficiency engineer and inventor Frederick Winslow Taylor.
Taylor believed in a “science of management” based on observation, measurement, analysis, and improvement of work method, and economic incentives. Interchangeable parts are parts of a product made to such precision that they do not have to be custom fitted. Division of labor means the breaking up of production process into small tasks, so that each worker perform small portion of the overall job. II. Critical Thinking Exercise: 1. Many organizations offer a combination of goods and service to their customers.
As you learned in this chapter, there are some key differences between production of goods and delivery of service. What are the implications of these differences relative to managing operation? Answer: It is good to combine between goods and service to their customers. Although goods is physical items produced by business organizations and services include activities that provide some combine of time, location, from, and psychological value, goods and services have a relationship to increase number of customers.
Beside the company sell the goods, the company need to take care customer with services. It helps the customers trust and pleasure the goods as much as possible. Nowadays, the sale department and customer services department have to connect together to get profit and have potential customers. A good example for that is coffee shop. When you sell cups of coffee for customer, customers not only concern taste as well as the quality of coffee, but also they concern how they are serviced, the coffee is brought quickly or not.
Therefore, it is necessary to combine and improve quality of goods and services. III. Case: Hazel 1. In what ways are Hazel’s customers most likely to judge the quality of her lawn care services? Answer: Most Hazel’s customers judge the quality of her lawn care service depend on the way Hazel take care, how long she take care their garden, after Hazel take care, how their garden look, it is beautiful or not. For example, when Hazel mows lawns, she use good material, she work carefully and finish her job on time. It makes her customers satisfy and her job is considered successfully. 3.
What are some the trade-offs that Hazel probably considered related to: Working for a company instead of for herself, Expanding the business, Launching the website: Answer: a. Working for a company instead of for herself: If Hazel continues to find the job, she can find the good and satisfy job. However, she will not realize that she can be able to manage and do business. She can continue lose the job and she have to find other the job. She can earn less money with her job than her business. b. Expanding the business: When Hazel expand the business, there are some trade-offs for her.
Firstly, she has to spend more money instead of saving her money in the account bank. Secondly, it takes long time for her to do business, and she does not enough time to take care her family. And finally, her business can be unsuccessful and she can lose many things. c. Launching the website: The biggest trade-off for launching the website is her time. When she has the website, there are a lot of customers knows her business. The problem can be that she does not have enough time to cover, if she does not have enough employees.