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The Operation System

1) Inputs
- People
- Technology
- Capital
- Equipment
- Materials
- Information
2) Transformation Process
3) Outputs
- Goods
- Services

Operation Management

The study and application of the transformation process.

Transformation Process

The process that converts resources into finished goods and services.

Manufacturing Organizations

Organizations that produce physical goods.

Service Organizations

Organization that produce nonphysical products in the form of services.


The performance characteristics, features, attributes, and other aspects of goods and services, for which customer are willing to give up resources.

Value Chain

The entire series of work activities that add value at each step from raw materials to finished product.

Value Chain Management

The process of managing the sequence of activities and information along the entire value chain.

Requirements For Successful Value Chain Management

Value Chain Strategy:
1) Coordination and collaboration
2) Technology investment
3) Organizational processes
4) Leadership
5) Employees
6) Organizational culture and attitudes

Business Model

A strategic design for how a company intends to profit from its broad array of strategies, processes, and activities.

Organizational Processes

The way organizational work is done.

Obstacles To Successful Value Chain Management

Obstacle to value chain management:
1) Culture attitudes
2) Required capabilities
3) People
4) Organizational barriers

What is Quality?

1) Product quality dimensions
2) Service quality dimensions

Product Quality Dimensions

1) Performance
2) Features
3) Flexibility
4) Durability
5) Conformance
6) Serviceability
7) Aesthetics
8) Perceived quality

Service Quality Dimensions

1) Timeliness
2) Courtesy
3) Consistency
4) Convenience
5) Completeness
6) Accuracy

ISO 9000

A serie of international quality standards that set uniform guidelines for processes to ensure that products conform to customer requirements

Six Sigma

A quality standard that establishes a goal of no more than 3.4 defects per million units or procedures.


A one-time-only set of activities with a definite beginning and ending point.

Project Management

The task of getting project activities done on time, within budget, and according to specifications.

Gantt Chart

A planning tool that shows in bar graph form when tasks are supposed to be done and compares that with the actual progress on each.

Load Chart

A modified version of Gantt chart that list either whole department or specifics resources.

PERT Network Analysis

A flowchart-like diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity.


End points that represent the completion of major activities.


Action that take place

Critical Path

The longest and most time-consuming sequence of events and activities required to complete a project in the shortest amount of time.

Slack Time

The time difference between the critical path and all other path.

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