Operations Management Exam #1.Final Test 2026\2027.
Organizations Have 3 Basic Functions
Marketing
Operations
Finance
What is Operations?
The part of a business organization that is responsible for producing goods or services
Influences all of the rest of the organization
The actual doing part of the business process
What is Operations Management?
The management of systems or processes that create goods and/or provide services
Operations Management affects:
Companies' ability to compete
Why study OM?
Every aspect of business affects or is affected by operations
There is a significant amount of interaction and collaboration amongst the functional areas
The Operations Function
The creation of goods and services through the transformation of inputs into outputs
Feedback
measurements taken at various points in the transformation process
Control
The comparison of feedback against previously established standards to determine if
corrective action is needed.
Value Added
value/price of output - cost of input
,Operations Management Exam #1.Final Test 2026\2027.
Processes
(Managing to Meet Demand)
Operations & Supply Chains vs Sales and marketing
Supply ≥ Demand is wastefully costly
Supply < Demand causes Opportunity Loss/Customer Dissatisfaction
Supply = Demand is Ideal
Processes
(Variation)
Variations can be disruptive to operations and processes.
They may result in additional costs, delays and shortages, poor quality, and inefficient work
systems.
Manufacturing
goods-oriented (tangible things)
physical items that include raw materials, parts, subassemblies, and final products.
Automobile
Computer
Oven
Shampoo
Service
act-oriented
activities that provide some combination of time, location, form or psychological value.
Air travel
Education
, Operations Management Exam #1.Final Test 2026\2027.
Haircut
Legal counsel
Goods-service Continuum
Products are typically neither purely service- or purely goods-based.
Products Package
combinations of goods and services
Key Differences
Scope of Operations Management
The operations function includes many interrelated activities such as:
Forecasting (we won't cover, but important)
Capacity planning
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
Role of the Operations Manager
The Operations Function consists of all activities directly related to producing goods or
providing services.
A primary role of the operations manager is to guide the system by decision making.
-System Design Decisions
-System Operation Decisions
System Design Decisions
-Capacity
-Facility location
-Facility layout
-Product and service planning
Organizations Have 3 Basic Functions
Marketing
Operations
Finance
What is Operations?
The part of a business organization that is responsible for producing goods or services
Influences all of the rest of the organization
The actual doing part of the business process
What is Operations Management?
The management of systems or processes that create goods and/or provide services
Operations Management affects:
Companies' ability to compete
Why study OM?
Every aspect of business affects or is affected by operations
There is a significant amount of interaction and collaboration amongst the functional areas
The Operations Function
The creation of goods and services through the transformation of inputs into outputs
Feedback
measurements taken at various points in the transformation process
Control
The comparison of feedback against previously established standards to determine if
corrective action is needed.
Value Added
value/price of output - cost of input
,Operations Management Exam #1.Final Test 2026\2027.
Processes
(Managing to Meet Demand)
Operations & Supply Chains vs Sales and marketing
Supply ≥ Demand is wastefully costly
Supply < Demand causes Opportunity Loss/Customer Dissatisfaction
Supply = Demand is Ideal
Processes
(Variation)
Variations can be disruptive to operations and processes.
They may result in additional costs, delays and shortages, poor quality, and inefficient work
systems.
Manufacturing
goods-oriented (tangible things)
physical items that include raw materials, parts, subassemblies, and final products.
Automobile
Computer
Oven
Shampoo
Service
act-oriented
activities that provide some combination of time, location, form or psychological value.
Air travel
Education
, Operations Management Exam #1.Final Test 2026\2027.
Haircut
Legal counsel
Goods-service Continuum
Products are typically neither purely service- or purely goods-based.
Products Package
combinations of goods and services
Key Differences
Scope of Operations Management
The operations function includes many interrelated activities such as:
Forecasting (we won't cover, but important)
Capacity planning
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
Role of the Operations Manager
The Operations Function consists of all activities directly related to producing goods or
providing services.
A primary role of the operations manager is to guide the system by decision making.
-System Design Decisions
-System Operation Decisions
System Design Decisions
-Capacity
-Facility location
-Facility layout
-Product and service planning
