OPMT 303 1st Edition Exam 1 Study Guide chapter 1 6 Lecture 1 January 14 Introduction to Operations Management Informal definition the objective of business id to make a product that cost a dime sells for a dollar and is habit forming Operations Management definition activities whereby resources flowing within a defined system are combined and transferred in a controlled manner to add value in accordance with policies communicated by management The goal of any company is to measure the effectiveness of making money The ideal situation would be to get an economic match of supply and demand Excess is wasteful and costly and too little could lead to customer dissatisfaction and lost opportunity The conversion system is the creation of goods or services involves transforming or converting inputs into outputs and sometimes more than one transformation process if used on inputs Inputs Transformation Output Inputs are raw materials labor equipment money knowledge and information The transformation process involves technological processes such as storing transporting and repairing and the output is the goods are services that come from the transformation process Managers have a few responsibilities These include planning organizing directing and controlling 1 2 3 4 planning all future managerial activities to meet the objective of the organization Organizing bringing together the resources Directing turning plans into realities Controlling evaluating the performance and if necessary taking corrective actions Goods and services can get confused Gods are physical items produced by business organizations and services are activities that provide some combination of time location form and psychological value There are some major differences between each Goods are physical durable products while services are intangible and perishable Goods outputs can be inventoried which services outputs cannot be stored Goods require low customer contact while services involve high customer contact Goods have long time response while services are immediate demand Goods have regional to international markets while services are for local demand Goods require large economic facilities while services need small factories to address individual needs And lastly goods are capital intensive while services are labor intensive There are a few different types of operations They are goods producing storage transportation exchange retailing entertainment and communication 1 Goods producing farming mining power generation construction manufacturing 2 Storage transportation warehousing trucking mail service moving taxis buses hotels and airlines 3 Exchange retailing wholesaling banking renting leasing library loans 4 Entertainment films radio and television concerts recording 5 Communication newspapers radio and tv newscasts telephone Lecture 2 January 21 There are 3 primary areas of technology Product Technology is new products and services designed by engineers Process Technology is new methods to accomplish tasks And information Technology is ways to acquire process and transmit information Technology has been used to achieve social progress commit crimes and threaten social values Some examples are identity theft and the music industry through illegal file sharing online There are six general ethical principles in choosing new technology They are as followed The Golden rule which states do unto others as you would have them do to you Descartes rule of change which states if an actions can t be taken multiple times then it is not the right action to take Immanuel Kant s categorical imperative which states if action is not right for the whole group then it is not right for anyone the Utilitarian Principle which states take action that gets the greatest value the Risk Aversion Principle which says take the action that causes the least potential harm and lastly the No Free Lunch rule which says that virtually all objects are owned by someone else and that owner may want compensation How does marketing influence competitiveness Marketing influences competitiveness by identifying consumer wants and needs by pricing and quality and by advertising and promoting How does operations influence competitiveness Operations influences competitiveness through product and service design cost location quality quick response flexibility in volume and variety inventory management supply chain management service and managers and workers time is the most important critical resources How to improve productivity 1 Develop productivity measures 2 Find bottlenecks a Anything in a system that restricts the flow of products through the system 3 Develop methods for achieving productivity improvements 4 Establish reasonable goals 5 Consider incentives to reward workers for contributions 6 Measure improvements and publicize them 7 Productivity vs efficiency STRATEGIC PLAN When coming up with a strategic plan the objective is to determine the MISSION The mission of a strategic plan should say what kind of business you re looking to start what customer demographic and what goal profit The input of a strategic plan is changes in environment A few examples of his would be competition economic trends technologies social changes political changes and availability of resources The output of the strategic plan would be the business plan and production plan SWOT analysis strengths weaknesses opportunities and threats Who is responsible owner CEO or top management BUSINESS PLAN When coming up with a business plan the objective would be to develop and statement of income projections costs and profits balance sheet and cash flow statement A few characteristics of a business plan are it comes together into one coherent package the plans and expectations of the firm s operations and usually up to two years or on a monthly or quarterly basis Responsible vice president for finance Lecture 3 January 28 There are a few reasons for product and service design The economic reason would come from low demand and high cost warranty claims and the need to reduce cost The social and demographic reason would be aging and population shifts The political or legal would be because of government changes new laws and safety issues The competitive reason would be new products or services enhanced products or services or new advertising The availability reasons would come from availability of raw materials availability of components the labor cost and the resources and lastly the