Scheduled maintenance: Wednesday, February 8 from 10PM to 11PM PST
Upgrade to remove ads
Only $35.99/year

Chapter 6 - Operations

Terms in this set (18)

Operations
The function of the business that transforms factors of production into the goods or services that customers want.

- ie. the business function that creates products
Production operations
Activities that turn inputs into tangible goods.

(operations vs production: production emphasizes Tangible goods)
Service operations
Activities that turn inputs into intangible services.

- eg. How nice the waiter is (input = the waiter himself)
- convenience of opening hours ????

- inputs = the people who provide help/expertise
- outputs = people whose needs have been met
- service operations are performed, and done so immediately (cf goods can be made in advance), so need more planning
- arguably more difficult to provide than goods bc immediacy, customer involvement, customization
Operations management
Management of the creation of goods and services, and their satisfactory provision to the buyer

- Also, trying to do this as efficiently as possible
Immediacy
Characteristic of immediacy makes scheduling services more complex than scheduling production of goods
High-contact services
Service operations that necessarily involve interaction with the customer - adds further complexity bc workers need interpersonal skills :OO
Low-contact services
Don't need customer interaction
Customization
Characteristic of services that means no two customers need the identical service delivered in the same way.

- in contrast, products should be standardized, eg. size 4 means same thing everywhere
- this means that services are harder to schedule, bc they need to predict which services are more likely to be needed when (eg. when the restaurant will be busier)
What operations managers do
1) Forecast/demand planning
2) Capacity planning
3) Location planning
4) Layout planning
5) Scheduling
1) Forecast/demand planning
An estimate of the future demand for a business' goods and services
2) Capacity (planning)
The quantity of product that a business plans to produce under normal working conditions. Or making sure your stores have room and staff for everyone

- too small and you can't serve everyone
- too large and you're wasting money on unused resources
3) Location planning
Decision as to where best to locate the business' facilities and operations

- need to take into account raw materials, employees, electricity, distribution intermediaries, etc.
- eg. high contact service business should be located close to the customer
- businesses producing tangible goods have more flexibility, but transportation and dis. intermediary costs become more relevant, so need balance between close to customers and close to inputs/factories
4) Layout planning
Designing the business' factories, shops and offices to maximize efficiency and effectiveness

- eg. retail: layout draws customers in, and easy to navigate
- fast food: easy for workers to make food
- supermarkets: put common products at the back so people need to walk all the way and maybe buy more stuff ;)
5) Scheduling
Deciding when an activity should take place to accomplish a goal by its target completion date

- eg. businesses producing products to coincide with seasonal demand
Lead time
Gap between the time a customer wants a product, and when producer needs to begin making it
Gantt chart
Visual representation of all activities required to complete a goal and the time needed for each

- Shows sequence of activities
- When each one begins and ends
- Overlapping activities
Supply chain
The flow of materials and services between all the businesses that provide inputs into a finished product

- string of dependencies of supplies/resources
Supply chain management
Coordinated planning and scheduling, and the flow of info between the various members of the chain
Sets found in the same folder