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Final

MGTA02H3 Study Guide - Final Guide: Investment, Gross Margin, Global Positioning System


Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird
Study Guide
Final

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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
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Service Goods
Performance PerformedProduced
Process and OutcomeProcess and outcomeOutcome
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 ConsiderationsQuality 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 PlanningFind best locations for getting parts, skilled employees,
storage, transport to market
Layout PlanningSmooth flow of materials, good communications, no transport
or storage problems
Productive facilities- workstations, equipment
Non-productive facilities- storage and maintenance
Support facilities- offices, restrooms, parking lots etc
Process Layout: equipment and people are grouped together according to
their function
Cellular Layout: family of products follow a fixed flow path
Product Layout: equipment and people are set up to produce 1 type of
product (arranged in fixed sequence of steps)
Assembly line: partially finished product moves through a plant on a
conveyor belt
U-shaped production line: machines are places in a narrow U shape
Flexible manufacturing system (FMS): 1 factory produces small batches of
different products (wide-variety)
Soft manufacturing: Reducing FMS operations to smaller, more manageable
groups of machines
Quality PlanningEnsure goods are produced to meet the firm’s quality standards
Methods Planning Examine processes used in production. Analyze wasteful activities, delays, bottlenecks and other inefficiencies
Or Methods improvementProcess flow chart- identifies the sequence of production activities, movements of materials, and work performed at each stage as the product
flows through production
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Service flow analysis: shows the flow of processes that make up a given service, it helps managers decide whether all those processes are necessary
Operations scheduling: If you want to get something done on time, know when to start
Master production schedule: shows which products will be produced, when production will occur, and what resources will be used during
Tools of Scheduling
Gantt chart: breaks down large projects into steps and specify the time required to perform each one
PERT chart: (Program Evaluation & Review Technique) like Gantt chart, but also identifies the critical path for meeting the project goals
Operations control: monitor production performance by comparing results with plans and schedules
Follow-up: Checking to ensure that production decisions are being implemented
Materials management: Planning, organizing, and control the flow of materials (logistics)
Standardization: Using standard and uniform components rather than new or different components
4 Major Areas of Materials Management:
Transportation: transporting resources to the company and finished goods to buyers
Warehousing: storage of materials for production and finished goods
Inventory control: receiving, storing, handling, and counting all raw materials, partly finished goods, and finished goods
Purchasing: the acquisition of all raw materials and services that a company needs to produce its products
Forward buying: routinely buy materials enough to fill long-term needs
Holding costs: Costs of keeping extra supplies or inventory on hand
Opportunity costs: additional earnings that the company must pass up b/c funds are tired up in inventory
Hand-to-mouth pattern: placing small orders frequently
Lead times: the gap between the customers order placement and the seller’s shipment and delivery reliability
Supplier selection: Finding and determining which suppliers to buy from
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