lOMoAR cPSD| 6861666
COMM 225 Midterm Study Notes on Operations Management and
Project Management | Graded A+ | New Update 2026
COMM225 – Operations Management
LESSON 1
1.1 Introduction
Three major organizational functions:
1. Finance: Capital is required for running and creating the organization. Finance is all
about arranging and managing the capital.
2. Marketing: It is all about accessing customer’s need, competition, demand, pricing,
promotion, etc.
3. Operations: Transforming various inputs to products/services.
Operations management: the management of processes that create goods and/or provide
services. One of the three major functions and one of the costliest functions of any organization.
Examples:
- Fast food restaurant: managing raw material, cost, inventory; scheduling of
employees/staff; managing orders, controlling the waiting, etc.; managing the delivery
related functions such as promising the time and accepting or refusing the order.
- Airlines: handling the ground support, facility/equipment management, scheduling of the
crews and pricing of the tickets.
- Manufacturing: most OM techniques are developed around manufacturing. Production
planning for complex products, such as vehicles, are all operations related functions.
These include but are not limited to managing the raw material and finished goods
inventory, planning the resources (such as high-tech machines and workforces),
managing the quality of intermediate and finished products.
- Banks: management of various workforces (such as managers, cashiers, security staff),
scheduling the workforces to efficiently manage the customers during peak periods,
locating and servicing (refilling) ATMs, etc.
Value-added: difference between the cost of inputs and the value or price of outputs. Inputs could
be buildings, labour, machines, materials and outputs will be either products or services or both.
- Non-profit organizations: value of outputs (e.g., highway construction, police and fire
protection) is their value to society; the greater the value added, the greater the efficiency
of these operations.
- For-profit organizations: measured by the prices that customers are willing to pay for
those goods or services.
Supporting functions that interface with operations:
1. Logistics: the handling and transportation of goods.
2. Accounting: the summary of capital, assets, work in progress, debt, etc.
3. MIS (Management Information System): IT (Information Technology) based system that
handles various organizational functions such as payroll, ordering, purchasing, etc.
, lOMoAR cPSD| 6861666
4. Purchasing
5. Human Resources (HR)
6. Manufacturing
7. Maintenance
8. Design and development
Manufacturing:
- Physical product.
- Inventoried output.
- Low customer contact.
- Long response time.
- Regional or International market.
- Large facilities.
- Capital intensive.
- Quality can be easily measured.
Services:
- Intangible product.
- Cannot be inventoried.
- High customer contact.
- Short response time.
- Local markets.
- Small facilities.
- Labor intensive.
- Quality measurement is difficult.
Goods vs. Services in Canada: services have been growing faster and now account for more
than 79% of jobs in Canada.
1.2 Competitiveness, Strategic Planning, and Productivity
Cost: unit production of a good or performance of a service to the organization.
Price: the amount a customer must pay for the good or service. If all other factors are equal,
customers will choose the good or service that has the lowest price.
Quality: (from an organization’s perspective) determining customers’ quality requirements,
translating these into specifications for goods or services, and consistently producing goods or
performing services to these specifications.
Flexibility: being able to produce a variety of goods or performing a variety of services in the
same facility (includes customization or being able to easily increase or decrease the production
quantity of goods or performance quantity of services), achieved by having general-purpose
equipment, excess capacity, and multi-skilled worker.
Variety: choice of models and options available to customers, the more variety, the wider the
range of potential customers.
, lOMoAR cPSD| 6861666
Delivery flexibility and speed: being able to consistently meet promised due dates by
producing goods or performing services on time or quickly.
Customers trade-off purchasing criteria: customers compare products based on value
(useful features with respect to price).
1. First pick products based on order qualifiers.
2. Then choose the best valued products (order winners) from the order qualifiers.
Once the product is in the order qualifiers list, customers compare the products with the
competition with respect to the price, services, etc., and pick the winners. So, order winners are
the products which offer order qualifier features at a competitive price and terms.
Operations strategy:
- Strategy: long term plan to give direction (growth) to an organization and it can only be
developed if the organization’s vision or goals are clear.
- Vision: shared perception of the organization’s future, what it will achieve, and its
supporting philosophy.
- Mission: basis of the organization: the reason for its existence, its products, and markets
(example: our mission is to deliver superior quality products and services for our
customers and communities through leadership, innovation, and partnerships).
An organization strategy includes the growth plan, such as new markets, new products,
branding, new channels (such as online retailing), etc.
Corporate strategy:
- Market analysis: what the customer wants and how to provide it. Market analysis gauge
the market for the product based on past sales, surveys, feedback, success of similar
products, etc.
- Market segmentation: identify the needs of each segment.
- Competitive priorities: priorities help in penetrating a group of customers or focusing a
market segment.
COMM 225 Midterm Study Notes on Operations Management and
Project Management | Graded A+ | New Update 2026
COMM225 – Operations Management
LESSON 1
1.1 Introduction
Three major organizational functions:
1. Finance: Capital is required for running and creating the organization. Finance is all
about arranging and managing the capital.
2. Marketing: It is all about accessing customer’s need, competition, demand, pricing,
promotion, etc.
3. Operations: Transforming various inputs to products/services.
Operations management: the management of processes that create goods and/or provide
services. One of the three major functions and one of the costliest functions of any organization.
Examples:
- Fast food restaurant: managing raw material, cost, inventory; scheduling of
employees/staff; managing orders, controlling the waiting, etc.; managing the delivery
related functions such as promising the time and accepting or refusing the order.
- Airlines: handling the ground support, facility/equipment management, scheduling of the
crews and pricing of the tickets.
- Manufacturing: most OM techniques are developed around manufacturing. Production
planning for complex products, such as vehicles, are all operations related functions.
These include but are not limited to managing the raw material and finished goods
inventory, planning the resources (such as high-tech machines and workforces),
managing the quality of intermediate and finished products.
- Banks: management of various workforces (such as managers, cashiers, security staff),
scheduling the workforces to efficiently manage the customers during peak periods,
locating and servicing (refilling) ATMs, etc.
Value-added: difference between the cost of inputs and the value or price of outputs. Inputs could
be buildings, labour, machines, materials and outputs will be either products or services or both.
- Non-profit organizations: value of outputs (e.g., highway construction, police and fire
protection) is their value to society; the greater the value added, the greater the efficiency
of these operations.
- For-profit organizations: measured by the prices that customers are willing to pay for
those goods or services.
Supporting functions that interface with operations:
1. Logistics: the handling and transportation of goods.
2. Accounting: the summary of capital, assets, work in progress, debt, etc.
3. MIS (Management Information System): IT (Information Technology) based system that
handles various organizational functions such as payroll, ordering, purchasing, etc.
, lOMoAR cPSD| 6861666
4. Purchasing
5. Human Resources (HR)
6. Manufacturing
7. Maintenance
8. Design and development
Manufacturing:
- Physical product.
- Inventoried output.
- Low customer contact.
- Long response time.
- Regional or International market.
- Large facilities.
- Capital intensive.
- Quality can be easily measured.
Services:
- Intangible product.
- Cannot be inventoried.
- High customer contact.
- Short response time.
- Local markets.
- Small facilities.
- Labor intensive.
- Quality measurement is difficult.
Goods vs. Services in Canada: services have been growing faster and now account for more
than 79% of jobs in Canada.
1.2 Competitiveness, Strategic Planning, and Productivity
Cost: unit production of a good or performance of a service to the organization.
Price: the amount a customer must pay for the good or service. If all other factors are equal,
customers will choose the good or service that has the lowest price.
Quality: (from an organization’s perspective) determining customers’ quality requirements,
translating these into specifications for goods or services, and consistently producing goods or
performing services to these specifications.
Flexibility: being able to produce a variety of goods or performing a variety of services in the
same facility (includes customization or being able to easily increase or decrease the production
quantity of goods or performance quantity of services), achieved by having general-purpose
equipment, excess capacity, and multi-skilled worker.
Variety: choice of models and options available to customers, the more variety, the wider the
range of potential customers.
, lOMoAR cPSD| 6861666
Delivery flexibility and speed: being able to consistently meet promised due dates by
producing goods or performing services on time or quickly.
Customers trade-off purchasing criteria: customers compare products based on value
(useful features with respect to price).
1. First pick products based on order qualifiers.
2. Then choose the best valued products (order winners) from the order qualifiers.
Once the product is in the order qualifiers list, customers compare the products with the
competition with respect to the price, services, etc., and pick the winners. So, order winners are
the products which offer order qualifier features at a competitive price and terms.
Operations strategy:
- Strategy: long term plan to give direction (growth) to an organization and it can only be
developed if the organization’s vision or goals are clear.
- Vision: shared perception of the organization’s future, what it will achieve, and its
supporting philosophy.
- Mission: basis of the organization: the reason for its existence, its products, and markets
(example: our mission is to deliver superior quality products and services for our
customers and communities through leadership, innovation, and partnerships).
An organization strategy includes the growth plan, such as new markets, new products,
branding, new channels (such as online retailing), etc.
Corporate strategy:
- Market analysis: what the customer wants and how to provide it. Market analysis gauge
the market for the product based on past sales, surveys, feedback, success of similar
products, etc.
- Market segmentation: identify the needs of each segment.
- Competitive priorities: priorities help in penetrating a group of customers or focusing a
market segment.
