Production and operations management is essential to organizations that make products as well as those that provide services. It coordinates the resources and activities that turn inputs into outputs while keeping customer needs, quality, and costs in view.
Production is the creation of products and services. It transforms inputs—such as natural resources, raw materials, human resources, and capital—into outputs, which are the goods and services an organization provides. Operations management is the management of this conversion process.
All flashcards
What is production?
Production is the creation of products and services by transforming inputs—such as materials, labor, natural resources, and capital—into outputs.
What is operations management?
Operations management is the management of the processes that convert organizational inputs into goods and services.
What do operations managers oversee?
They manage and supervise the conversion process, including resources, production or service processes, quality, costs, and coordination with other departments.
What are the three stages of operations decisions?
Production planning determines where, when, and how production occurs; production control manages day-to-day scheduling, quality, and costs; improvement develops more efficient production or service methods.
What are the three production-planning horizons?
Long-term planning covers three to five years; medium-term planning covers about two years; short-term planning covers a period within one year.
Quiz questions
What contributed to quality becoming a central concern in operations management in several U.S. industries?Answer: Some firms lost customers when their systems did not deliver desired quality at an acceptable price.
When marketing reports demand for a new product, what should operations managers assess?Answer: The processes, resources, staffing, timing, and costs needed to produce it.
Which resources are identified as a substantial part of the resources affected by operations managers’ decisions?Answer: Inventories, wages, and employee benefits.
What is marketing’s contribution to coordination with operations?Answer: Identifying products or services to offer based on customer needs.
Which trade-off may production planning need to manage?Answer: Providing high-quality service while keeping operating costs low.
Based on Introduction to Business 2e by Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.