Chapter 3 - The Operations Management Function

Question 1

What are the key elements of operations management

Answer 1

• inputs
• transformations/processes
• outputs

Question 2

Define ‘tangible’ and ‘intangible’

Answer 2

Tangibles are goods which can be touched.

Intangibles include services which cannot be touched.

Question 3

What are the differences between a ‘manufacturing’ and a ‘service’ organisation

Answer 3

One difference between a manufacturing organisation and a service organisations is that a manufacturing organisation would produce more tangible products than intangible, while a service organisation would focus on producing intangible products, for example a performed service such as a haircut.
Another difference is that a service organisation can’t store their products and the customer will most likely have to be present e.g learning new skills at a course, while a manufacturing organisation depending on the products produced can store them, e.g. groccery stores storing goods such as bread and milk.

Question 4

Define inputs

Answer 4

Inputs are resources used in the process of production

Question 5

list the six categories of inputs and describe them

Answer 5

• materials (raw, components)
• capital equipment (machines/ovens, plant >transform into other inputs)
• information (related to the transformation and statistics)

Question 6

Define transformation

Answer 6

Transformation is the conversion of inputs (resources) into outputs (goods or services)

e.g.s being “ing” words

Question 7

Define outputs

Answer 7

Outputs refer to the end result of an organisation’s efforts - the service or product that is delivered or provided to the consumer.

Question 8

Define productivity

Answer 8

Productivity is a measure of efficiency - the amount of output produced compared to the amount of input required in production.

Question 9

Define business competitiveness

Answer 9

Business competitiveness refers to the ability of an organisation to sell products in a market.

• organisations essentially compete in two ways being ‘cost’ (providing customers with lower priced goods and services) and ‘differentiation’ (providing customers with superior value in terms of service flexibility, speed, quality or added features compared to lower priced competitors

Question 10

Define operations management

Answer 10

Operations management consists of all the activities in which managers engage to produce goods and services.

Question 11

List ways an organisation can compete on cost

Answer 11

• decrease costs
• work ‘smarter’ by finding new ways to produce more
• achieve economies of scale
• bulk buy inputs
• eliminate waste
• produce standardised products to larger markets
• produce high volume output
• use automated production systems