Op Exam Review
Chapter 1
1. Operation Management: administration of business practices to create the highest level of efficiency possible within an organization
a. Concerned with converting materials and labor into goods/services as efficiently as possible to maximize profit of organization
2. Why Study OM?
a. One of he three major functions -> marketing/finance/operations
b. Want & Need to know how goods/services are produced
c. Understand what operations managers do
d. Costly part of organization
3. Characteristics of Service
a. Intangible/produced & consumed at same time/often unique/high customer interaction/inconsistent product definition
4. Goods vs. Services
a. Can be resold -> reselling unusual
b. Can be inventoried -> difficult to inventory
c. Some aspects of quality measureable -> difficult to measure
d. Selling is distinct from production -> selling is part of services
e. Product is transportable -> provide, cannot be transportable
f. Site of facility important for cost -> site is important for customer contact
g. Often easy to automate -> difficult to automate
h. Revenue generated from tangible product -> revenue generated from intangible product
i. Maintain their value for a longer time -> value declines quickly
j. Produced by manufacturers -> provided by service oriented organizations
5. Measurement Problems
a. Quality may change while the quantity of inputs/outputs remains constant
b. External elements may cause an increase/decrease in productivity
c. Precise units of measure may be lacking
6. Productivity Variables
a. Labor: contributes to 10% of annual increase
b. Capital: continues to 32% of annual increase
c. Management: contributes about 52% of annual increase
Chapter 2
1. Defining Global Operations
a. International Business: engages in cross-border transactions
b. Multinational Corporation: has extensive involvement in international business, owning or controlling facilities in more than one country
c. Global
1. Operation Management: administration of business practices to create the highest level of efficiency possible within an organization
a. Concerned with converting materials and labor into goods/services as efficiently as possible to maximize profit of organization
2. Why Study OM?
a. One of he three major functions -> marketing/finance/operations
b. Want & Need to know how goods/services are produced
c. Understand what operations managers do
d. Costly part of organization
3. Characteristics of Service
a. Intangible/produced & consumed at same time/often unique/high customer interaction/inconsistent product definition
4. Goods vs. Services
a. Can be resold -> reselling unusual
b. Can be inventoried -> difficult to inventory
c. Some aspects of quality measureable -> difficult to measure
d. Selling is distinct from production -> selling is part of services
e. Product is transportable -> provide, cannot be transportable
f. Site of facility important for cost -> site is important for customer contact
g. Often easy to automate -> difficult to automate
h. Revenue generated from tangible product -> revenue generated from intangible product
i. Maintain their value for a longer time -> value declines quickly
j. Produced by manufacturers -> provided by service oriented organizations
5. Measurement Problems
a. Quality may change while the quantity of inputs/outputs remains constant
b. External elements may cause an increase/decrease in productivity
c. Precise units of measure may be lacking
6. Productivity Variables
a. Labor: contributes to 10% of annual increase
b. Capital: continues to 32% of annual increase
c. Management: contributes about 52% of annual increase
Chapter 2
1. Defining Global Operations
a. International Business: engages in cross-border transactions
b. Multinational Corporation: has extensive involvement in international business, owning or controlling facilities in more than one country
c. Global