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Chapter Eight. Production and Operations Management. Operations Management. The development and administration of the activities involved in transforming resources into goods and services. 8-1. The Transformation Process. 8-2.

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chapter eight

Chapter Eight

Production andOperations Management

operations management
Operations Management

The development and administration of the activities involved in transforming resources into goods and services.

8-1

operations in service businesses
Operations in Service Businesses
  • Service providers use human and mechanical processes to provide products that are intangible.
  • The transformation process requires inputs such as employees, equipment and supplies.
  • Outputs provide a benefit from a performance, event or type of involvement with the service provider.

8-4

differences between manufacturers and service providers
Differences between Manufacturers and Service Providers
  • Nature and consumption of output
  • Uniformity of inputs
  • Uniformity of outputs
  • Labour required
  • Measurement of productivity

8-5

steps in planning and designing operations systems
Steps in Planning and Designing Operations Systems

1. Planning the product

2. Designing the operations process a. standardization b. modular design c. customization

3. Planning capacity

8-6a

steps in planning and designing operations systems1
Steps in Planning and Designing Operations Systems

4. Planning facilities a. facility location b. facility layout 1. fixed position layout 2. process layout 3. product layout c. technology 1. CAD 2. CAM 3. flexible manufacturing 4. CIM

8-6b

facility layouts
Facility Layouts

Fixed-position layout All resources needed for a product are brought to a central location.

Process layout Layout is organized into departments that group related processes.

Product layout Production is broken down into relatively simple tasks assigned to workers positioned along a line.

8-7

logistics

Purchasing

Inventory Control

Routing and Scheduling

Distribution

Logistics

8-8

types of inventory

rawmaterials

work inprocess

finishedgoods

transformation process

Types of Inventory

8-10

managing inventory
Managing Inventory
  • Economic order quantity (EOQ)model
  • Just-in-time inventory management (JIT)
  • Material-requirements planning (MRP)

8-11

a hypothetical pert diagram for a mcdonald s big mac

Grill beef

patties

(120)

Remove buns,

2

2 beef patties,

cheese,

sauce,

Start

6

7

4

5

E

1

8

lettuce,

n

onions,

d

pickle

Place

(20)

Top

Place

Place

Serve to

3

cooked

with

Big Mac in

package

customer

patties

cheese

package

in heated

(5)

on bun

and

(5)

bin

(5)

Apply

vegetables

(5)

sauce

(15)

to bun

(10)

5

(185) Time to complete

Critical path

Activity

Event

event (seconds)

A Hypothetical PERT Diagram for a McDonald’s Big Mac

8-13

national quality institute principles of business excellence
National Quality InstitutePrinciples of Business Excellence
  • Leadership through involvement
  • Primary focus on stakeholders/customers and the market place
  • Cooperation and teamwork
  • Prevention based on process management

8-14a

national quality institute principles of business excellence1
National Quality InstitutePrinciples of BusinessExcellence

5. Factual approach to decision making

6. Continuous learning and people involvement

7. Focus on continuous improvement

8. Fulfillment of obligations to all stakeholders and society

8-14b

total quality management

Total Quality Management

8-15

A philosophy and set of guiding principles that provide a foundation for the continuous improvement of an enterprise.

enterprise resource planning

Enterprise Resource Planning

8-16

The integration of all departments and functions of a company into one computer system

is0 9000 internal organization for standardization
IS0 9000Internal Organization for Standardization
  • Designed to ensure consistent quality
  • Requires documenting record keeping on training, testing and responding to defects
  • Independent auditor must verify standards required by ISO
  • ISO 9002 certification has been established for service providers

8-17

solve the dilemma
Solve the Dilemma
  • What mistake did McKing make in approaching the introduction of pizza?
  • How could this product introduction have been coordinated to avoid the problems that were encountered?
  • If you were an executive at McKing, how would you proceed with the introduction of pizza into the restaurants?

8-18

explore your career options
Explore Your Career Options

How can an understanding of total quality management (TQM) or ISO 9000 series certification assist in developing a career?

8-19

additional discussion questions and exercises
Additional Discussion Questions and Exercises

1. What is the purpose of inventory control?

2. PERT charts can show a sequence of activities in days rather than seconds. Draw a PERT chart for the chairperson of a banquet committee showing the most efficient path for these projected events:January 5 Confirm banquet room reservation.

January 6 Publicize banquet.

January 19 Count number of banquet reservations; phone in total to hotel.

January 20 Phone chairpersons of banquet decorating committee and hospitality committee to review preparations for banquet.

8-20a

additional discussion questions and exercises1
Additional Discussion Questions and Exercises

Question 2 continued.

January 27 Decorating committee places decorations on tables.

(2-4 p.m.) Hospitality committee prepares registration table and banquet booklets.

January 27 Banquet(6 p.m.)

January 30 Send thank-you notes to all committee persons and hotel staff.

8-20b

additional discussion questions and exercises2
Additional Discussion Questions and Exercises

3. Prepare a Gant Chart for the sequence of activities described in question #2

8-20c

chapter 8 quiz
Chapter 8 Quiz

1. An assembly line is an example of a. a product layout b. a process layout c. a fixed-position layout d. an intermittent organization

2. Which of the following identifies the optimum number of items to order to minimize the cost of ordering them? a. just-in-time (JIT) b. material-requirements planning (MRP) c. economic-order quantity model d. program evaluation and review technique (PERT)

8-21a

chapter 8 quiz1
Chapter 8 Quiz

3. Which of the following characteristics is most typical of a continuous manufacturing organization? a. The firm manufactures customized products. b. The firm has a low volume of production. c. The firm has a relatively low unit cost of production. d. The firm creates many different products with many different characteristics.

4. Inspection is concerned with a. standards of quality. b. labor and energy. c. routing and scheduling. d. modular design and customization.

8-21b

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