mgmt 339 chap 1 using operations to create value day 2

which should be more valuable in the transformation process: output or input

output

whats an example of physical transformation

manufacturing

whats an example of locational transformation

transportation

whats an example of exchange transformation

retailing

whats an example of storage transformation

warehousing

whats an example of physiological transformation

health care

whats an example of informational transformations

telecommunications

____ use or consume output

customers

what are examples of types of customers

internal customers

intermediate customers

final customers

whats an example of internal customers

distribution center

whats an example of intermediate customers

dealership

whats an example of final customers

people who buy the car (consumers)

what are external customers

Either an end user or an

intermediary buying the firm’s finished services or

products

____ provide inputs

Suppliers

can suppliers be external or internal suppliers

BOTH

whats an example where you would be higher than the supplier in the stream of supply

shipping, or amazon fba

what are some examples of Upstream product suppliers

Raw materials, components, services as supplies

what are some examples of Downstream product suppliers

Assembly, packaging, storage, and transport

what are some examples of Resource and technology suppliers

Including equipment, labor, product and process design

what are some examples of aftermarket suppliers

Maintenance, repair, disposal, recycling

_____ have an interest in organizational

well being and performance

stakeholders

examples of stakeholders

Employees, the local community, government,

investors, unions, social groups, etc…

How do stakeholders affect a firm’s operation?

Increasing concerns and rising expectations on

sustainability

whats the idea of the triple bottom line

A firm maintains a balance between profit (financial) and

the need to be fair and not harmful to people (social) and

planet (environment)

____ is the goal that a corporation’s services,

products, and processes are meeting humanity’s

needs without harming future generations

sustainability

____ resides at the CORE of a firm

operations

Today OM refers more

generally to the study of

business processes. OM

concerns both

____and

____industries.

manufacturing and service

is the service process tangible or intangible

intangible

is the manufacturing process intangible or tangible

tangible

what is tangible and the qualities of something that is tangible

• Can be inventoried

• Low customer contact

• Long response time

• Often capital-intensive

• Quality easily assured

• Material is transformed

what is intangible and the qualities of something being intangible

• Cannot be inventoried

• High customer contact

• Short response time

• Often labor intensive

• Quality harder to assess

• Information or customer is

transformed

which has long response time: intangible or tangible

intangible

can services be patented

no

can customers try out services before purchases

they cant

what type of outcomes do services have with heterogeneity

unpredictable outcomes

Supply Chain (SC):

an interrelated series of

processes within and across firms that produces a

service or product to the satisfaction of customers

Supply Chain Management (SCM):

the

synchronization of a firm’s processes with those of

its suppliers and customers to match the flow of

materials, services, and information with customer

demands

The focus of OM has shifted from internal

production to_______

supply chain management

Productivity equation

output/input

Single-factor productivity

–Productivity of one input variable

–E.g.: labor productivity, machine productivity

Two workers paint tables in a furniture shop. If the

workers paint 22 tables in 8 hours, what is their

productivity?

22/(2×8) =1.375 tables per hour

Multifactor productivity

–Productivity of a group of inputs

Output is worth $382 and labor and material costs

are $168 and $98, respectively. What is a

multifactor productivity measure of our use of

labor and materials?

382/(168+98)=1.436

Bluegill has hired two new workers to paint chairs.

They have painted 10 chairs in 4 hours. What is

their labor productivity?

10/(2×4)=1.25 chairs per hour

On average, Bluegill produces 35 chairs per day.

Labor costs average $480, material costs are

typically $200, and overhead cost is $250. If

Bluegill sells the chairs to a retailer for $70 each,

determine the multifactor productivity.

(35×70)/(480+200+250)=2.634

Last week employees at Bluegill produced 46 chairs

after working a total of 200 hours. Of the 46 chairs

produced, 12 were damaged due to a problem with

the new sanding machine. The damaged chairs can

be discounted and sold for $25 each. The

undamaged chairs are sold to a department store

retail chain for $70 each. What was the labor

productivity ratio for last week? If labor productivity

was $15 in sales per hour the previous week, what

was the change in labor productivity?

damaged+good chairs→ (25×12)+(34×25)=2680$

labor productivity= $2680/200hours=13.40$ per hour

100% → 89.3%

15$/hour → $13.40/hour → decrease of 10.7%

decrease of $1.60/hour

13.40/15= 0.893=89.3%

1.60/15= 10.7%