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study guide

Management (MGT)
Course Code
Ingrid L.Stefanovic

of 8
Management Lecture 1
Outline: Midterm (3-4 short answers) and a Final Test (4-5 short answers)
Slide 1;
Managing production (of goods) in a business; how to do it? How to accomplish? What is
the real role of management throughout this whole thing?
The Production Process
-Backing Bread:
-Raw materials- flour, oil, salt, yeast
-Equipment- Bread pans, oven
-Timing- Time in oven, cooling
-Packaging- getting the bread ready to ship
-Shipping-sending the bread to the customer
All steps need to be managed; If making best yeast of steps we want to minimize the time,
dont waste time; minimize the steps we have to go though and increase the through-put,
dont want the oven sitting ideal, we want to sell as much bread as we can make, we want to
make as much bread as equipment can produce. That is why business Management is
important. Best use of about, best use of labour (finance).
Operations Management
-Systematic direction and control
-That transforms resources
-Into finished goods and services
Key Processes
-Planning production by mobilizing materials, equipment, labour and information
-Scheduling operation to make efficient use of resources
-Controlling the work, costs, quantity and quality of production
-each step role of needs business management
-planning; to produce a quantity of an item you need the proper amount of resources to
make those goods or services. Cannot run out of resources
-have to make sure everyone is doing their duty/jobs. Control what people do, to some
extent. Production planning; when people make mistakes; what do you do with mistakes.
Operations Management
-The different between producing goods and producing services
-Services are more customized to the client
-Services are much harder to store and thus keep in inventory
-Providing services means engaging people skills
-Service quality is not the same as the quality of the work provided
-Produce what you are producing and hope people will want them. A doctor does not
market his services in that way. Services are supposed to be responsive to customers’ needs,
-Customized production of goods, started in North America with the Automobile
-Segment market, style of car changes every year
-Laptops (dell) you can customize it, production becomes more like a service
Operation Planning
-Capacity planning
-What will you need to produce
-How will you allocate resources
-Will you allocate for average production or maximum production
-If you allocate for average production, how will you handle periods of maximum
-Example; Producing Ice Cream: Assume may-Aug max out in ice cream and then the
rest of the time minimizes production. Some people like ice cream more in the summer time
rather than the winter time and vice versa. Solution; deal with resource company and make
sure they can ship on time and deal with what you need, with raw materials. (just-in-time
inventory systems). If you dont carry lts of inventory you expect suppliers to supply you
just-in-time for example the Dell computers (vustomizing your dell and purchasing. Bring
equipment in from supplier and then mark computer, and then send it to customers. Do not
need big/heavy inventory, no big warehouse, or story it and being it back, do not need
money, inventory/ warehouses are expensive. To buy stuff and carry it for 6 months it is
expensive. For machinery; should you over buy machinery? Typical problem with modern
machine production. Use machinery to produce product, in alternate use. Rent?
-Farm production, most farmers have big tractor, and few have corn machines to collect
machines because they run around in corn season and harvest them all, makes more sense
for one farmer to do his farm and other farmers corn (renting equipment)depends if you can
be effective rather than efficient.
-plan for maximum production (blood clinc and getting blood, do not want to go to clint and
realize there is not any blood for you)
Operations Planning
-Location Planning
-Where will you locate the plant, or the service office
-How will you balance the costs of transportation of resources and the costs of
moving finished goods.
- Location planning is important but not something that happens very often, do not
move plant around on weekly basis.