Chapter 9 Flashcards
Production management process
creates value to satisfy customers wants and needs
Purchasing function
Procurement of resources needed by production function and departments
Production function must (ITOA)
Use the input to transform resources into goods/services based on the target markets wants and needs
Marketing function
Goods/services produced are marketed to the target market
Land/raw materials
All the natural resources used in production
Capital
Money and fixed assets that are used in production
Entrepreneurship process
Opportunities identified to combine factors of production
Labour/ human capital
Skills, knowledge, and experience
Information technology
The use of technology to satisfy customers wants and needs
Tasks of production function
Input
Transformation
Output
Acceptance
Input
To ensure the correct raw materials are there and quality control mechanisms
Transformation
Manager needs to ensure the correct facilities Labour and capital
Output
Output goods must meet the correct standards
Acceptance
The goods/services that meet the requirements must be accepted by customers
Specific tasks
Long term
Short term
Medium term
Long term tasks
Require research, consultation, discussions and implemented and can’t be rushed
Medium term tasks
Can be adapter quarterly or monthly
Short term takes
Made on a day to day basis
Choosing factory location
Proximity to resource
Availability of Labour and skills
Availability of services
Room for expansion
Availability for transport
Availability of Labour and skills
Locate the business in area where the required skills are already available
Proximity to resource VS proximity to market
If the resource is perishable it it better to be closer to the product
Availability of services
The business locate itself close to services such as infrastructure
Availability of transport
The business will identify what type of transport system it will need near by
Room for expansion
The business should consider space that will accommodate the future
