COMM 225 Production and Operations Management
Midterm Notes (best way to prepare for 26th Oct 2025 MID
EXAM) Concordia University
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.
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.
Delivery flexibility and speed: being able to consistently meet promised due dates by
producing goods or performing services on time or quickly.
Midterm Notes (best way to prepare for 26th Oct 2025 MID
EXAM) Concordia University
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.
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.
Delivery flexibility and speed: being able to consistently meet promised due dates by
producing goods or performing services on time or quickly.
