1
Introduction to Business
Chapter 10: Achieving World-Class Operations Management
10.1 Production and Operations Management - An Overview
In the 1980s, many U.S. manufacturers lost customers to foreign competitors because their
production and operations management systems did not support the high-quality, reasonably
priced products consumers demanded. Service organizations also rely on effective operations
management in order to satisfy consumers. Operations managers, the personnel charged with
managing and supervising the conversion of inputs into outputs, work closely with other
functions in organizations to help ensure quality, customer satisfaction, and financial success.
10.1 Review Questions
1. Define the following terms:
a. Production
b. Operations Management
c. Operations manager
2. What vital role do operations managers play in an organization?
3. Describe the three main types of decisions
a. Production Planning
b. Production Control
c. Improving Production and Operations
4. What decisions are made at the production stage?
5. What does the final stage of operations management focus on?
6. Describe the three production planning phases?
7. What does long-term planning focus on, and how long is this time frame?
8. What does medium-term planning focus on, and how long is this time frame?
9. What does short-term planning convert broader goals into, and how long is the time
frame?
10. What are the four important decisions that must be made in production planning?
10.2 The Production Process: How Do We Make It?
Products are made using one of three types of production processes. In mass production, many
identical goods are produced at once, keeping production costs low. Mass production,
therefore, relies heavily on standardization, mechanization, and specialization. When mass
customization is used, goods are produced using mass-production techniques up to a point,
after which the product or service is custom-tailored to individual customers by adding special
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
, 2
features. When a firm’s production process is built around customization, the firm makes many
products one at a time according to the very specific needs or wants of individual customers.
1. How do organizations determine which type of production process to use?
2. What are the two ways to classify processes?
3. Define the following terms:
a. Production Process
b. Mass Production
c. Mass Customization
d. Customization
e. Job Shop
f. Process Manufacturing
g. Assembly Process
h. Continuous Process
i. Intermittent Process
4. What was mass production a product of?
5. What is the emphasis of mass production?
6. What is the difference between mass production and mass customization?
7. What does customization involve?
8. Why is the conversion less obvious in the service industry?
9. What are the two basic processes for converting inputs into outputs?
10. What are inputs in process manufacturing and what are they broken down into?
11. How is the assembly process different from process manufacturing?
12. What might be considered in choosing a production process?
a. Why is timing important?
13. Why is continuous process used?
14. When is intermittent process used? What is this process best for?
10.3 Location, Location, Location: Where Do We Make It?
Site selection affects operating costs, the price of the product or service, and the company’s
ability to compete. In choosing a production site, firms must weigh the availability of resources
—raw materials, manpower, and even capital—needed for production, as well as the ability to
serve customers and take advantage of marketing opportunities. Other factors include the
availability of local incentives and the manufacturing environment. Once a site is selected, the
firm must choose an appropriate design for the facility. The three main production facility
designs are process, product, and fixed-position layouts. Cellular manufacturing is another type
of facility layout.
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
Introduction to Business
Chapter 10: Achieving World-Class Operations Management
10.1 Production and Operations Management - An Overview
In the 1980s, many U.S. manufacturers lost customers to foreign competitors because their
production and operations management systems did not support the high-quality, reasonably
priced products consumers demanded. Service organizations also rely on effective operations
management in order to satisfy consumers. Operations managers, the personnel charged with
managing and supervising the conversion of inputs into outputs, work closely with other
functions in organizations to help ensure quality, customer satisfaction, and financial success.
10.1 Review Questions
1. Define the following terms:
a. Production
b. Operations Management
c. Operations manager
2. What vital role do operations managers play in an organization?
3. Describe the three main types of decisions
a. Production Planning
b. Production Control
c. Improving Production and Operations
4. What decisions are made at the production stage?
5. What does the final stage of operations management focus on?
6. Describe the three production planning phases?
7. What does long-term planning focus on, and how long is this time frame?
8. What does medium-term planning focus on, and how long is this time frame?
9. What does short-term planning convert broader goals into, and how long is the time
frame?
10. What are the four important decisions that must be made in production planning?
10.2 The Production Process: How Do We Make It?
Products are made using one of three types of production processes. In mass production, many
identical goods are produced at once, keeping production costs low. Mass production,
therefore, relies heavily on standardization, mechanization, and specialization. When mass
customization is used, goods are produced using mass-production techniques up to a point,
after which the product or service is custom-tailored to individual customers by adding special
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
, 2
features. When a firm’s production process is built around customization, the firm makes many
products one at a time according to the very specific needs or wants of individual customers.
1. How do organizations determine which type of production process to use?
2. What are the two ways to classify processes?
3. Define the following terms:
a. Production Process
b. Mass Production
c. Mass Customization
d. Customization
e. Job Shop
f. Process Manufacturing
g. Assembly Process
h. Continuous Process
i. Intermittent Process
4. What was mass production a product of?
5. What is the emphasis of mass production?
6. What is the difference between mass production and mass customization?
7. What does customization involve?
8. Why is the conversion less obvious in the service industry?
9. What are the two basic processes for converting inputs into outputs?
10. What are inputs in process manufacturing and what are they broken down into?
11. How is the assembly process different from process manufacturing?
12. What might be considered in choosing a production process?
a. Why is timing important?
13. Why is continuous process used?
14. When is intermittent process used? What is this process best for?
10.3 Location, Location, Location: Where Do We Make It?
Site selection affects operating costs, the price of the product or service, and the company’s
ability to compete. In choosing a production site, firms must weigh the availability of resources
—raw materials, manpower, and even capital—needed for production, as well as the ability to
serve customers and take advantage of marketing opportunities. Other factors include the
availability of local incentives and the manufacturing environment. Once a site is selected, the
firm must choose an appropriate design for the facility. The three main production facility
designs are process, product, and fixed-position layouts. Cellular manufacturing is another type
of facility layout.
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
