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Chapter 10

COMMERCE 1BA3 Chapter 10: Chapter 10 Business Environment Notes

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McMaster University
Rita Cossa

Chapter 10 Business Environment Notes • Canada is a large industrial company with many major industries. One of the worlds largest forestry producers. • However, Canada is facing some serious challenges to its ability to remain a modern, competitive industrial country • Research and Development: Work directed toward the innovation, introduction, and improvement of products and processes. • Its how one uses technology is what will give someone an edge • Production: The creation of goods and services using the factors of productions: land, labour, capital, entrepreneurship, and knowledge. • Production management: Described management activities that helped firms create goods. But the nature of business has changed including internet services have increasingly grown • Operations Management: Specialized area in management that converts or transforms resources into goods and services. (Ex. Inventory management, quality control). About creating a good experience for the customer • Using computers is one of they ways the service sector is improving productivity • Facility Location: The process of selecting a geographic location for a company’s operations • In keeping with the need to focus on customers, one strategy is to find a site that makes it easy for consumers to use the company’s services and to communicate about their needs. • Some companies are willing to spend millions of dollars to move their locations because of long-term benefits • Outsourcing (moving certain functions such as call centres to other countries at a cheaper value) has become extremely popular. • Telecommuting: Working from home via computer. This is a major trend in business. • Using telecommuting companies no longer need to locate near sources of labour • Facility Layout: The physical arrangement of resources, including people, to most efficiently produce goods and provide services to customers. • Layouts such in places like hospitals can help improve efficiency within their system • Assembly-line layout: Used for repetitive tasks • Process layout: Frequently used in operations that serve different customers’ needs • Modular: Can accommodate changes in design or customer demand • Fixed position layout: A major feature of planning is scheduling work operations • Materials requirement planning (MRP): Computer based management system that sues sales forecasts to ensure that needed parts and materials are available at the right time and place. • Enterprise resources planning: a newer version of MRP, combines the computerized functions of all the divisions and subsidiaries of the firm—such as finance, human resources, and order fulfillment—into one integrated software program that uses a single database • Purchasing: The function that searches for high-quality material resources, finds the best suppliers, and negotiates the best price for quality goods and services. • Just in time inventory: Keeps a minimum inventory on the premises and delivers parts, supplies, and other needs just in time to go on the assembly line • Quality: Consistently producing what the customer wants while reducing errors before and after delivery to the customer. • Six Sigma quality: Sets a benchmark of just 3.4 defects per million opportunities. This is used to prevent constant occurrence • Statistical quality control: the process some managers use to continually monitor all phases of the production process and assure quality is built into the product from the beginning. • Statistical process control: The process of testing statistical samples of a product at each step of production and displaying it on a graph. • I
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