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Chapter One

Chapter One. Introduction to Operations Management. Introduction to Operations Management. The management of systems or processes that create goods and/or provide services. Organization. Finance. Marketing. Operations. Operations Management. Introduction to Operations Management.

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Chapter One

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  1. Chapter One Introduction to Operations Management

  2. Introduction to Operations Management The management of systems or processes that create goods and/or provide services Organization Finance Marketing Operations Operations Management

  3. Introduction to Operations Management • Operations Management includes: • Forecasting • Capacity planning • Scheduling • Managing inventories • Assuring quality • Motivating employees • And more . . .

  4. Introduction to Operations Management Operations Marketing Finance Business Operations Overlap

  5. Introduction to Operations Management Steel productionAutomobile fabrication House buildingRoad construction Low service content High goods content Dressmaking Farming Auto Repair Appliance repair Maid Service Manual car wash Increasing goods content Increasing service content Teaching Lawn mowing High service content Low goods content Goods-service continuum

  6. Introduction to Operations Management

  7. Introduction to Operations Management Goods Producing Farming, mining, construction , manufacturing, power generation Storage/Transportation Warehousing, trucking, mail service, moving, taxis, buses, hotels, airlines Exchange Retailing, wholesaling, banking, renting, leasing, library, loans Entertainment Films, radio and television, concerts, recording Communication Newspapers, radio and television newscasts, telephone, satellites Types of Operations Operations Examples

  8. Introduction to Operations Management Value added Inputs Outputs Transformation/ Land Goods Conversion Labor Services process Capital Feedback Control Feedback Feedback Value-Added The difference between the cost of inputs and the value or price of outputs.

  9. Introduction to Operations Management Outputs Inputs Processing Raw Vegetables Cleaning Canned vegetables Metal Sheets Making cans Water Cutting Energy Cooking Labor Packing Building Labeling Equipment Food Processor

  10. Introduction to Operations Management Inputs Processing Outputs Doctors, nurses Examination Healthy patients Hospital Surgery Medical Supplies Monitoring Equipment Medication Laboratories Therapy Hospital Process

  11. Introduction to Operations Management Industrial Maintenance Engineering MIS Public Relations Distribution Operations Purchasing Personnel Accounting Operations Interfaces

  12. Introduction to Operations Management System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment Decision Making

  13. Introduction to Operations Management System operation – personnel – inventory – scheduling – project management – quality assurance Decision Making

  14. Introduction to Operations Management Tangible Act Manufacturing or Service?

  15. Introduction to Operations Management • Customer contact • Uniformity of input • Labor content • Uniformity of output • Measurement of productivity • Quality assurance Key Differences These differences are beginning to fade in many cases

  16. Introduction to Operations Management Characteristic Manufacturing Service Output Tangible Intangible Customer contact High Low Uniformity of input Low High Labor content High Low Uniformity of output Low High Measurement of productivity Difficult Easy Opportunity to correct Low High quality problems High Manufacturing vs Service

  17. Introduction to Operations Management Planning Organizing Capacity Degree of centralization – – Location Subcontracting – – Products & services Staffing – Make or buy – Hiring/laying off – Layout – Use of Overtime – Projects – Directing Scheduling – Incentive plans – Controlling Issuance of work orders – Inventory – Job assignments – Quality – Responsibilities of Operations Management

  18. Introduction to Operations Management Physical – – Schematic – Mathematical Models A model is an abstraction of reality. Tradeoffs What are the pros and cons of models?

  19. Introduction to Operations Management Suboptimization Systems Approach “The whole is greater than the sum of the parts.”

  20. Introduction to Operations Management • Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models Quantitative Approaches

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