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Flashcards in Business Exam 2 Deck (35)
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The creation of goods using land, labor, capital, entrepreneurship and knowledge (the factors of production).


Production Management

All the activities managers do to help firms create goods


Operations Management

A specialized area in management that converts or transforms resources into goods and services.


Form Utility

The value producers add into a finished good or service.
Ex.Putting services together to create a vacation package



1.To build and deliver products in response to the demands of the customer at the scheduled delivery time.
2.To provide an acceptable quality level.
3.To provide everything at the lowest possible cost.


Process Manufacturing

The part of production that physically or chemically changes materials.
ex. boiling the egg


Assembly Process

The part of the production process that puts together components.
ex. eggs, coffee, toast = breakfast


Continuous Process

Long production runs turn out finished goods over time.
ex.long conveyor belt with eggs that continuously are dropped into water – continuous stream of 3 minute eggs


Intermittent Process

Production runs are short and the producer adjusts machines frequently to make different products
ex.a toaster in a diner or oven in a bakery


Computer-Aided Design (CAD)

The use of computers in the design of products.


Computer-Aided Manufacturing (CAM)

The use of computers in the manufacturing of products


Computer-Integrated Manufacturing (CIM)

The uniting of computer-aided design with computer-aided manufacturing.
SIG. CIM is expensive but it cuts as much as 80% of the time needed to program machines to make parts


Flexible Manufacturing

Designing machines to do multiple tasks so they can produce a variety of products.


Lean Manufacturing

Using less of everything than in mass production.

Compared to others, lean companies:
-Take half the human effort.
-Have half the defects in finished products.
-Require one-third the engineering effort.
-Use half the floor space.
-Carry 90% less inventory.


Mass Customization

Tailoring products to meet the needs of a large number of individual customers


Operations management

a specialized area in management that converts or transforms resources into goods and services through Facility location, Facility layout, Materials requirement planning, Purchasing, Inventory control, Quality control


Facility Location

The process of selecting a geographic location for a company’s operations

future: Telecommuting -- Working from home via computer.


Facility Layout

The physical arrangement of resources, including people, to most efficiently produce goods and provide services.


Facility Layout Options

1.Assembly Line Layout – Workers do only a few tasks at a time.
2.Modular Layout – Teams of workers produce more complex units of the final product.
3.Fixed-Position Layout – Allows workers to congregate around the product (like bridge or airplane)
4.Process Layout – Similar equipment and functions are grouped together and the order in which the product visits the equipment depends on the design of the product.


Materials Requirement Planning (MRP)

A computer-based operations management system that uses sales forecasts to make sure parts and materials are available when needed.


Enterprise Resource Planning (ERP)

A newer version of MRP, combines computerized functions into a single integrated software program using a single database.



The function that searches for high-quality material resources, finds the best suppliers and negotiates the best price for goods and services.


Just-in-Time (JIT) Inventory Control

The production process in which a minimum of inventory is kept and parts, supplies and other needs are delivered just in time to go on the assembly line.



Consistently producing what the customer wants while reducing errors before and after delivery.


Six Sigma Quality

A benchmark quality measure that allows only 3.4 defects per million opportunities.


Statistical Quality Control

A process used to continually monitor all phases of the production process.


Statistical Process Control

A process of testing statistical samples of product components at each stage of production.


The International Organization for Standardization (ISO)

ISO 9000 -- The common name given to quality management and assurance standards.The standards require that a company determine customer needs and determine how to handle complaints.

ISO 14000 -- A collection of the best practices for managing an organization’s impact on the environment.

Certification as ISO 900 and 1400 means that a company had a world-class management system in both quality and environmental standards


Program Evaluation and Review Technique (PERT)

Project management technique that shows the time taken by each component of a project, and the total time required for its completion. PERT breaks down the project into events and activities, and lays down their proper sequence, relationships, and duration in the form of a network. Lines connecting the events are called paths, and the longest path resulting from connecting all events is called the critical path. The length (duration) of the critical path is the duration of the project, and any delay occurring along it delays the whole project. PERT is a scheduling tool, and does not help in finding the best or the shortest way to complete a project.


Gantt Chart

A type of bar chart that illustrates a project schedule at any given moment. Helpful for Managers to supervise projects every step of the way


Intrinsic & Extrensic Rewards

Intrinsic- Personal Satisfaction when achieving a goal
Extrinsic- Rewards from someone else for completing goals


Frederick Taylor & The Principles of Scientific Management

One of the first people to study management, the father of scientific management. He conducted time-motion studies to learn the most efficient of doing the job and then trained workers through his results.


Principle of motion economy

Theory developed by Frank and Lillian Gilbreth that every job can be broken down into a series of elementary motions.


Elton Mayo & the Hawthorne effect

Elton Mayo conducted a scientific management study on the Hawthorne Plant to see if specific conditions to the worker's atmosphere would make them work differently. Instead, they came to the conclusion that the motivation of being watched made the employees work harder.


Human Resource Management

The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals.