Chapter 1: Introduction to Operations Management

A comprehensive set of Q&A flashcards covering definitions, concepts, historical evolution, decision making, and contemporary issues in Chapter 1: Introduction to Operations Management.

What is operations management?

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

Within a business organization, what is meant by the term “operations”?

The part of the organization responsible for producing goods and services.

How do goods differ from services?

Goods are tangible physical items, while services are activities that provide time, location, form, or psychological value.

Define a supply chain.

A sequence of organizations—their facilities, functions, and activities—that are involved in producing and delivering a product or service.

What are the three basic functional areas of any business organization?

Finance, Operations, and Marketing.

List the typical stages in a simple product supply chain (in order).

Suppliers’ suppliers → Direct suppliers → Producers → Distributors → Final customers.

Name four common inputs to the operations function and two common outputs.

Inputs: Land, Labor, Capital, Information. Outputs: Goods, Services.

What fundamental difference distinguishes the production of goods from the provision of services?

Goods production creates tangible outputs that can be seen or touched, whereas service provision generally implies an intangible act.

Give three examples of professional service jobs.

Financial services, healthcare, legal services.

Give three examples of mass service jobs.

Utilities, internet services, communications services.

State two career-related reasons for learning operations management, even if it is not your major.

(1) Operations affects every aspect of business, so its knowledge benefits any career; (2) The skill set gained (e.g., process analysis, decision making) is valuable in many fields.

In which three activities do finance and operations personnel most often cooperate?

Budgeting, economic analysis of investment proposals, and provision of funds.

What are marketing’s key responsibilities that interact with operations?

Assessing customer wants and needs and communicating them to operations (short term) and design (long term).

What information can operations supply to marketing and design teams?

Information about production capacities and manufacturability of proposed designs.

What information can the finance function supply to operations and design teams?

Data on available funds and funding needs for new products or services.

Name five supporting functional areas that frequently interface with operations.

Legal, Public Relations, Human Resources/Personnel, MIS (Management Information Systems), Accounting.

Why must the legal department be consulted by operations managers?

To address contracts with employees, customers, suppliers, transporters, and liability or environmental issues.

What key information does accounting provide to operations management?

Costs of labor, materials, overhead, and reports on scrap, downtime, and inventory levels.

What are the three broad categories of business processes?

Upper-management processes, Operational processes, and Supporting processes.

Define an upper-management process.

A process that governs the operations of the entire organization, including governance and strategy.

Define an operational process.

A core value-stream process such as purchasing, production or service delivery, marketing, and sales.

Define a supporting process.

A process that supports core operations, e.g., accounting, human resources, and IT.

What are the FOUR basic sources of process variation?

(1) Variety of goods or services offered, (2) Structured variation in demand, (3) Random variation, (4) Assignable variation.

List at least five key activities included in the scope of operations management.

Product/service design, process selection, technology management, work-system design, location planning, facilities planning, quality improvement.

Name five interrelated activities performed within the operations function.

Forecasting, capacity planning, facility location, layout planning, scheduling, inventory management, quality assurance, employee motivation and training.

What is the purchasing function responsible for?

Procuring materials, supplies, and equipment needed by the organization.

What is the chief role of an operations manager?

Planner and decision maker who influences how well organizational goals and objectives are met.

List the five fundamental questions an operations manager must answer.

WHAT resources are needed? WHEN are they needed? WHERE will the work be done? HOW will the product or service be designed? WHO will do the work?

In operations management, what is a model?

An abstraction or simplified representation of reality used for analysis and decision making.

Differentiate between physical, schematic, and mathematical models.

Physical models look like the real object; schematic models are more abstract diagrams or charts; mathematical models use equations or data relationships and do not resemble the physical object.

What is meant by taking a system perspective in decision making?

Viewing an organization as interrelated parts working together, recognizing that the whole is greater than the sum of its parts.

State the Pareto phenomenon.

A small percentage of factors often accounts for a large percentage of an outcome (e.g., 20% of causes yield 80% of results).

Define craft production.

A system where highly skilled workers use simple, flexible tools to produce small quantities of customized goods.

Who is regarded as the father of scientific management?

Frederick Winslow Taylor.

What is meant by mass production?

A system in which low-skilled workers use specialized machinery to produce high volumes of standardized goods.

What are interchangeable parts?

Parts made to such precision that they can be swapped without custom fitting.

Explain “division of labor.”

Breaking a production process into small tasks so each worker performs only a portion of the overall job.

Differentiate e-business from e-commerce.

E-business uses electronic technology for any business transactions; e-commerce refers specifically to consumer-to-business transactions on the internet.

In operations terms, what is technology?

The application of scientific discoveries to develop/improve products, services, and processes.

What is Six Sigma?

A process and methodology for reducing costs, improving quality, and increasing customer satisfaction.

Define agility in an organizational context.

The ability of an organization to respond quickly to demands or opportunities.

Define a lean system.

A system that uses minimal resources to produce high-quality, high-volume goods with some variety.

List at least five high-priority issues facing today’s business operations.

Economic conditions, innovation, quality problems, risk management, cyber-security, and competing in a global economy.

Why is supply chain management receiving increased attention from businesses?

Rising pressure to improve operations, higher outsourcing levels, increasing transportation costs, competitive and globalization pressures all require better supply chain management.