Operations Management and Operations Function

Comprehensive vocabulary terms and concepts derived from the lecture on Operations Management, covering functional areas, process types, decision-making, and productivity measures.

Management Science

The study and development of techniques for the formulation and analysis of management and related business problems.

Operations Research

The application of techniques developed in mathematics, statistics, engineering, and the physical sciences to the solution of problems in business, government, industry, economics, and the social sciences.

Quantitative Methods

Methods that employ mathematical models to reach a wide variety of business decisions, giving modern managers a competitive edge.

Qualitative Methods

Methods that focus on sources of data such as one's own immediate experience or others' experiences understood through speech, writing, behaviors, and products.

Production

The creation of goods and services.

Production and/or Operations Management (POM)

The activities that transform resources into goods and services.

Marketing

The functional area responsible for assessing consumer wants and needs, and selling and promoting the organization's goods or services.

Operations

The functional area responsible for producing the goods or providing the services offered by the organization.

Finance/Accounting

The functional area responsible for securing financial resources, allocating those resources, budgeting, analyzing investment proposals, and providing funds for operations.

Operations Management (OM)

The science and art of ensuring that goods and services are created and delivered successfully to customers.

Process

One or more actions that transform inputs into outputs.

Upper-management processes

Processes that govern the operation of the entire organization, such as organizational governance and organizational strategy.

Operational Processes

The core processes that make up the value stream, including purchasing, production and/or services, marketing, and sales.

Supporting processes

Processes that support the core processes, such as accounting, human resources, and IT (information technology).

Production system

The way a firm acquires inputs and then converts and disposes outputs.

Operations managers

Personnel responsible for managing the transformation process from inputs to outputs.

System Design Decisions

Strategic decisions that usually require long-term commitment of resources and determine parameters of system operation, such as capacity and facility location.

System Operation Decisions

Tactical and operational decisions where operations managers spend the most time, including management of personnel, inventory, and scheduling.

Efficiency

The amount of input required to produce a given output; the less input required, the lower the cost and waste.

Continuous Improvement

A foundation of OM where companies have processes in place to consistently seek better ways of doing things to remain competitive.

Process design

The determination of the best way to produce a new product, involving the charting of detailed steps needed for production.

Inventory management

The tight control of inventory to keep costs down and avoid unnecessary production.

Scheduling Capacity

The creation of production schedules to ensure product availability for retail and wholesale customers based on inventory and capacity.

Quality Management

The ensuring of goods and services are reliable and perform correctly to meet customer expectations.

Responsiveness to customers

Actions taken by a firm to react quickly and correctly to customer needs as they arise.

Productivity

The ratio of outputs to inputs, calculated as $\text{Productivity} = \frac{\text{Outputs}}{\text{Inputs}}$.

Partial measures

A productivity measure calculated as $\frac{\text{Output}}{\text{Single Input}}$.

Multi-factor measures

A productivity measure calculated as $\frac{\text{Output}}{\text{Multiple Inputs}}$.

Total measure

A productivity measure calculated as $\frac{\text{Output}}{\text{Total Inputs}}$.

Good

A physical product that can be seen, touched, or consumed, such as oranges, televisions, or industrial machines.

Service

Any primary or complementary activity that does not directly produce a physical product.