Professional Documents
Culture Documents
Topic 8 Page 1
Topic 8 Page 2
Topic 8 Page 3
What is Utility?
A products ability to satisfy a human want. Four kinds: time,
place, possession and form
Topic 8 Page 4
Topic 8 Page 5
Topic 8 Page 6
Topic 8 Page 7
Operations Processes
1. Operations process is a set of methods and
technologies used in the production of a good
or a service
a. Goods classification is based on whether
an operations process combines
resources or breaks them into
component parts
b. Services classification is based
on the extent of customer contact
required
Topic 8 Page 8
Topic 8 Page 9
Topic 8 Page 10
Topic 8 Page 11
1.
2.
3.
Focus on Performance
Focus on Process and Outcome
Focus on Service Characteristics
a. Intangibility
b. Customization
c. Unstorability
4.
Topic 8 Page 12
Operations Planning
1. Managers from many departments contribute to
decisions about operations.
2. The business plan and forecasts developed by top
managers guide operations planning.
a. Forecast is a facet of a long-range
production plan that predicts
future demand
Topic 8 Page 13
Topic 8 Page 14
What is Capacity?
Amount of a product that a company can produce under normal
working conditions
Topic 8 Page 15
Capacity Planning
1. Capacity Planning for Producing Goods
a. Capacity planning for goods means ensuring
that a firms capacity slightly exceeds normal
demand for its product.
2. Capacity Planning for Producing Services
a. In low-contact processes, maintaining inventory
lets managers set capacity at the level of
average demand.
b. In high-contact processes, managers must plan
capacity to meet peak demand.
Topic 8 Page 16
Location Planning
1. Location Planning for Producing Goods
a. Location decisions are influenced by proximity
to raw materials and markets, availability of
labor, energy and transportation costs and other
factors.
2. Location Planning for Producing Services
a. Low-contact services can be located near
resource supplies, labor or transportation
outlets.
b. High-contact services must locate near the
customers who participate in the system.
Topic 8 Page 17
Topic 8 Page 18
Topic 8 Page 19
Topic 8 Page 20
Topic 8 Page 21
Topic 8 Page 22
Topic 8 Page 23
What is Quality?
The American Society for Quality defines quality as the
combination of characteristics of a product or service that
bear on its ability to satisfy stated or implied needs.
Topic 8 Page 24
Methods Planning
1. Methods Improvement in Goods
a. Process flowchart is a diagram included in a
detailed description of methods
2. Methods Improvement in Services
a. Service flow analysis shows the flow of
processes that make up a given service
b. Designing to Control Employee
Discretion in Services
c. Design for Customer Contact in Services
Topic 8 Page 25
Topic 8 Page 26
Operations Scheduling
1.
Topic 8 Page 27
Topic 8 Page 28
Topic 8 Page 29
Topic 8 Page 30
What is Follow-Up?
Production control activity for ensuring that production
decisions are being implemented
Topic 8 Page 31
Materials Management
1. Materials management allows managers
not only to control but also to plan and
organize materials flow
a. Standardization is the use of standard
and uniform components in the
production process
Topic 8 Page 32
Topic 8 Page 33
Purchasing Processes
1. Holding costs are costs of keeping extra supplies or
inventory on hand
2. Opportunity costs are additional earnings that the
company must pass up because funds are tied up in
inventory
3. Lead time is the gap between the customers order
placement and the sellers shipment
4. Supplier selection is the process of deciding which
suppliers to buy from
Topic 8 Page 34
1. Worker Training
2. Lean Production Systems:
Just-in-Operations
Topic 8 Page 35
Topic 8 Page 36