chpt1.docx

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23 Apr 2012
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CHAPTER 1: PRODUCING GOODS AND SERVICES
Service operations: provide tangible and intangible service products (e.g. entertainment, transportation)
Goods production: provide tangible products (e.g. newspapers, buses)
Operations (production) management:
systematic direction and control of the processes that transform resources into finished goods
Management of the creation of goods/services using the factors of production (land, labour, capital,
entrepreneurship)
Production managers:
plan, organize, schedule, control
responsible that operation processes must create value & provide benefits (e.g. farmers)
Operations process: set of methods & technologies used in production
5 Types of Transformation Technology:
- Chemical- through heat/cold/mixture change material’s composition
- Fabrication- alter the form of a product (cut something, bend it)
- Assembly- put things together
- Transport- moving raw material/product from A to B
- Clerical- transforms information
2 Types of Production Process:
Analytic: resources are broken down
Synthetic: resources are combined
Customer contact:
High-contact: cannot be provided without the customer being physically in the system (e.g. transit
systems)
Low-contact: can be provided without the customer being physically in the system (e.g. lawn care
services)
Differences between Service and Goods Operation
Service
Goods
Performance
Performed
Produced
Process and Outcome
Process and outcome
Outcome
Service Characteristics
Intangibility: cannot be seen or touched
Customization: unique to a particular customer
Unstorability: cant store 2 hair cuts (perishable)
Customer-Service Link
Acknowledgement of customer
Service Quality Considerations
Quality of work does not equal to quality of service
Forecasts: estimates of future demand
Capacity Planning
Ensure enough time, money, factory space, warehousing,
employees, to meet demand
Capacity: Amount of a good that can produce under normal
working conditions
Goods- exceed slightly
Service-low-contact: average
high-contact- peak
Location Planning
Find best locations for getting parts, skilled employees,
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