Chapter 1 – Introduction to Operations Management

A comprehensive set of question-and-answer flashcards covering key definitions, concepts, historical milestones, managerial roles, and current issues in Chapter 1: Introduction to Operations Management.

What part of a business organization is responsible for producing goods or services?

The operations function.

How is Operations Management (OM) defined?

The management of systems or processes that create goods and/or provide services.

Give two examples of goods and two examples of services.

Goods: automobiles, shampoo. Services: air travel, haircut.

What is a supply chain?

A sequence of activities and organizations involved in producing and delivering a good or service.

Name the four basic input categories in the transformation process.

Land, labor, capital, and information.

In the transformation process, what is the purpose of feedback?

Measurements taken to assess performance at various points in the process.

What does control do in the transformation process?

Compares feedback to standards to determine if corrective action is needed.

Explain the goods–service continuum.

Most products combine elements of both goods and services rather than being purely one or the other.

List three typical differences between goods production and service provision.

Goods are tangible, have low customer contact, and easier productivity measurement; services are intangible, have high customer contact, and difficult productivity measurement.

Why should non-operations majors study Operations Management?

Because every business function affects or is affected by operations, and many service jobs relate closely to OM.

What are the three basic functions of any organization?

Marketing, operations, and finance.

Give two examples of activities that require cooperation between finance and operations.

Budgeting and economic analysis of investment proposals.

Name three career titles directly related to OM and supply chain.

Operations manager, inventory manager, purchasing manager.

Identify two professional societies relevant to Operations Management.

APICS (Association for Operations Management) and ASQ (American Society for Quality).

Define a business process.

One or more actions that transform inputs into outputs.

What are the three categories of business processes?

Upper-management processes, operational (core) processes, and supporting processes.

What happens when supply exceeds demand?

Resources are wasted and costs are incurred unnecessarily.

List the four sources of process variation.

Variety of goods/services, structural variation in demand, random variation, and assignable variation.

Name four activities included in the scope of Operations Management.

Forecasting, capacity planning, scheduling, and quality assurance.

What is the primary role of an operations manager?

To guide the system by making design and operating decisions.

State the five core OM questions (5W & H).

What, when, where, how, and who concerning resources and work.

Define a model in the context of decision making.

An abstraction or simplification of reality used to analyze problems.

Give an example of each model type: physical, schematic, mathematical.

Physical: scale airplane; Schematic: city map; Mathematical: inventory optimization formula.

List two key benefits of using models.

Simplify complex reality and allow 'what-if' analysis.

What is a major limitation of quantitative models?

They may over-emphasize quantitative data and ignore qualitative factors.

What is meant by a quantitative approach to decision making?

Seeking mathematically optimal solutions, often with computer support.

Name three common performance metrics used in OM.

Cost, quality, and productivity.

Explain a trade-off with an example in OM.

Balancing inventory cost against customer service level; carrying more inventory increases service but raises costs.

Describe the systems perspective.

Viewing an organization as interrelated subsystems whose overall objectives supersede individual parts.

What is the Pareto phenomenon?

A small number of factors often account for a large percentage of an outcome; focus on the critical few.

Who introduced the concept of division of labor and in what year?

Adam Smith in 1776.

What was Eli Whitney’s major OM contribution?

Interchangeable parts (1790).

Which movement emphasized scientific study of work methods and who led it?

Scientific management led by Frederick Winslow Taylor (1911).

What did Henry Ford introduce in 1913 that revolutionized production?

The moving assembly line.

Name two key figures associated with the human relations movement.

Elton Mayo (Hawthorne studies) and Abraham Maslow (hierarchy of needs).

Which Japanese concepts greatly influenced modern OM?

'Quality revolution' and Just-in-Time production.

List three current key issues for operations managers.

Economic conditions, risk management, and cyber-security.

Define sustainability in OM.

Using resources in ways that do not harm ecological systems supporting human life.

Give two areas of business affected by sustainability concerns.

Product/service design and supply chain waste management.

Mention three ethical issues that can arise in operations.

Product safety, worker safety, and environmental impact.

Why has supply chain management become essential?

Increasing outsourcing, globalization, complexity, and need to control inventory and costs.

What is Just-in-Time (JIT) production’s primary goal?

Producing only what is needed, when it is needed, to reduce waste and improve efficiency.

Name three technological or managerial advances of the 1980s that shaped OM.

Lean production, emphasis on flexibility, and quality revolution.

What is the main theme of a systems perspective?

The whole is greater than the sum of its parts.

Give an example of a performance metric related to flexibility.

Time required to change over a production line to a new product.

What do operations managers analyze when making capacity-planning decisions?

Forecasted demand versus available resources.

Which historical figure developed linear programming in 1947?

George Dantzig.

What is meant by agility in modern operations?

The ability to rapidly respond to market and customer changes with flexible processes.

Identify two common risks in global supply chains.

Transportation disruptions and currency fluctuations.

Why is feedback essential in the transformation process?

It allows comparison with standards to trigger corrective actions, ensuring desired output.

What is assignable variation and how is it handled?

Variation with identifiable causes; it can be reduced or eliminated through analysis and corrective action.

How do OM professionals use forecasting?

To predict future demand and align capacity, resources, and schedules accordingly.

Which of the following best defines operations management?

a) The part of a business organization responsible for marketing goods.

b) The management of financial assets and liabilities.

c) The management of systems or processes that create goods and/or provide services.

d) The process of selling products to customers.

c) The management of systems or processes that create goods and/or provide services

Which of the following is an example of a service?

a) An automobile.

b) An oven.

c) Haircut.

d) Shampoo.

c) haircut

The transformation process involves inputs, transformation, and which of the following as outputs?

a) Land, labor, and capital.

b) Feedback and control.

c) Goods and services.

d) Raw materials and subassemblies.

c) goods and services

In the context of the goods-service continuum, which pair is typically closer to the "service" end?

a) Automobile Assembly, Steelmaking.

b) Home Remodeling, Retail Sales.

c) Computer Repair, Restaurant Meal.

d) Surgery, Teaching

d) Surgery, Teaching

Which characteristic typically distinguishes services from goods?

a) Low customer contact.

b) High uniformity of input.

c) Easy measurement of productivity.

d) High labor content.

d) high labor content

According to the sources, why is it important to study operations management?

a) It solely focuses on marketing strategies.

b) Every aspect of business affects or is affected by operations.

c) It is only relevant for manufacturing jobs.

d) It primarily deals with financial budgeting.

b) every aspect of business affects or is affected by operations

Which of the following is NOT listed as a basic function of a business organization?

a) Marketing.

b) Human Resources.

c) Operations.

d) Finance.

b.) Human resources

When supply is greater than demand, the result is typically:

a) Opportunity loss and customer dissatisfaction.

b) An ideal balance.

c) Wasteful and costly.

d) Increased revenue.

c) wasteful and costly.

Which of the following sources of variation can typically be reduced or eliminated by analysis and corrective action?

a) Random variation.

b) Structural variation in demand.

c) Assignable variation.

d) Variety of goods or services being offered.

The primary function of an operations manager is to guide the system by:

a) Focusing solely on financial statements.

b) Making marketing decisions.

c) Decision making.

d) Managing only the supply chain.

A model that is an abstraction of reality and a simplification of something is a key tool used by:

a) Only finance managers.

b) All decision makers.

c) Only marketing personnel.

d) Production line workers.

A benefit of using models is that they:

a) Are always more expensive than dealing with the real system.

b) Guarantee good decisions.

c) Enable managers to analyze "What if?" questions.

d) Emphasize qualitative information at the expense of quantitative.

What is a "trade-off" in operations management?

a) A situation where all performance metrics are simultaneously optimized.

b) Giving up one thing in return for something else.

c) The process of acquiring new inventory.

d) A measure of productivity.

Which concept is credited with fueling the "quality revolution" and was refined by Japanese manufacturers?

a) Craft production.

b) Linear programming.

c) Just-in-Time production.

d) Scientific management.

The "Pareto Phenomenon" suggests that:

a) All factors in a process are equally important.

b) Managers should focus on a few critical factors that account for a high percentage of events.

c) Variation in processes cannot be influenced by managers.

d) Historical events have no bearing on current operations.

Which historical figure is associated with the concept of "interchangeable parts" in the Industrial Revolution?

a) Adam Smith.

b) Eli Whitney.

c) Frederick Winslow Taylor.

d) Henry Ford.

The "Human Relations Movement" emphasized the importance of the:

a) Mechanical aspects of job design.

b) Financial incentives for workers.

c) Human element in job design.

d) Strict separation of management and worker activities.

Which of the following is listed as a key issue for operations managers today? a) Only local market competition. b) Decreasing levels of outsourcing. c) Risk management. d) Stable economic conditions.

Sustainability in operations often involves measures that go beyond traditional environmental and economic measures to include which criteria?

a) Profit maximization.

b) Shareholder value.

c) Social criteria.

d) Competitor analysis.

One of the past problems that led to the need for improved supply chain management was:

a) Decreasing transportation costs.

b) Consistent inventory levels.

c) Quality problems.

d) Reduced outsourcing.

Goods are physical items, while services are activities that provide value such as time or location value. t or f

true

A supply chain is defined as a sequence of activities and organizations involved in producing and delivering a good or service. t or f

true

Products are typically purely service- or purely goods-based, with no continuum in between. t or f

false

Explanation: Products typically fall along a goods-service continuum, meaning they are rarely purely one or the other.

 Manufacturing jobs generally have a higher degree of customer contact than service jobs. t or f

false

Explanation: Service jobs generally have a higher degree of customer contact.

Measurement of productivity is typically easier for services than for goods. t or f

false

Explanation: Measurement of productivity is typically more difficult for services due to their intangible nature and variability.

Learning about operations and supply chains helps one understand why companies succeed or fail. t or f

true

The Finance function provides demand data and competitor analysis to Operations. t or f

False

Explanation: The Marketing function typically provides demand data and competitor analysis to Operations. Finance is concerned with budgeting and funds.

Operational processes are those that govern the operation of the entire organization. t or false

False.

Upper-management processes govern the operation of the entire organization; operational processes are the core value stream.

When supply is less than demand, it leads to wasteful and costly outcomes. t or f

False.

When demand is less than supply, it leads to wasteful and costly outcomes (e.g., excess inventory). When supply is less than demand, it can lead to lost sales and customer dissatisfaction.

Random variation in a process can generally be influenced by managers to reduce it.

False.

Random variation is natural and inherent in a process and cannot generally be influenced by managers to reduce it. Assignable variation, however, can be identified and reduced.

Forecasting and capacity planning are among the many interrelated activities within the scope of operations management.

true

System design decisions relate to how the product or service will be designed.

true