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GMS 401 (200)
Chapter 1

Chapter 1

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Ryerson University
Global Management Studies
GMS 401
Robert Meiklejohn

Chapter  1  –  Introduction  to  Operations  Management   Functions  within  Organizations   Operations   o Performs all activities directly related to producing goods or providing services o Core of most organizations § Inputs are used to obtain goods or services using one or more transformation processes (storing, transporting, cutting) § Measurements are taken along the way of this process (feedback) and then compared with standards § This determines what correct action needs to be taken (control) o Value-added is the term used to describe the difference between the cost of inputs and the value or price of outputs Finance   o Finance and operations management cooperate by exchanging information and expertise in activities such as: § Provision of funds § Economic analysis of investment proposals Marketing   o Focuses on selling or promoting the goods or services o Lead time: the time it between ordering a product and receiving it; a number marketing needs to know from operations Differentiating  Features  of  Operations  Systems   Degree  of  Product  Standardization   o How uniform the product is or if its customizable Type  of  Process   o The degree of standardization and the volume of output influences the way a firm organizes its production process Production  of  Goods  versus  Services   o Goods - Results in a tangible output o Services – Implies an act o Differences involve the following § Customer contact, use of inventories, and demand variability § Uniformity of input § Labour contact of jobs § Uniformity of output § Measurement of productivity § Quality assurance The  Operations  Manager’s  Job   • Has the ultimate responsibility for the creation of the goods or provision of services • All positions are managerial o Meaning, in every case the operations manager must coordinate the use of resources through the management processes of planning, organizing, directing, and controlling Operations  Managers  and  Decision  Making   Models   o Models are abstractions of reality; a simplified representation of something. o They ignore the irrelevant details so that attention can be on the most important aspects of a situation Quantitative  Approaches   o Attempts to obtain optimum solutions to the mathematical models of managerial problems. § Linear Programming – Allocation of scarce resources § Queuing Techniques – Used where lines form § Inventory Techniques – Control inventories § Project Scheduling Techniques – For large scale projects § Forecasting Techniques – Forecasting demand § Statistical Techniques – Used in decision making/quality control Analysis  of  Trade-­‐offs   o Using trade-off analysis to approach two solutions Systems  Approach   o Whenever something is being changed, the system must be taken into account Establishing  Priorities   o Pareto Phenomenon § A few factors account for a high percentage of the occurrence of some event(s) Ethics   o When making decisions, managers must make decisions based on how it will affect others. The  Historical  Evolution  of  Operations  Management   Craft  production  
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