GMS 401 Chapter Notes - Chapter 1: Cost Accounting, Time And Motion Study, William Ouchi

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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
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o Finance and operations management cooperate by
exchanging information and expertise in activities such
as:
! Provision of funds
! Economic analysis of investment proposals
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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
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o How uniform the product is or if its customizable
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o The degree of standardization and the volume of output
influences the way a firm organizes its production
process
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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
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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
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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
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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
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o Using trade-off analysis to approach two solutions
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o Whenever something is being changed, the system
must be taken into account
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o Pareto Phenomenon
! A few factors account for a high percentage of the
occurrence of some event(s)
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o When making decisions, managers must make decisions
based on how it will affect others.
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o System in which highly skilled workers use simple,
flexible tools to produce small quantities of customized
goods.
o No economies of scale
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o Innovations allowed for faster and a bigger volume of
goods to be produced by substituting machine power for
human power
o Division of labour
! An operation is divided up into smaller tasks and
individual workers assigned to each task
o Interchangeable parts
! Made it so parts were standardized
! Decreased assembly time and cost
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o Spearheaded by American efficiency engineer and
inventor Frederick Taylor
! He studied the most efficient and best way to
perform tasks
! Emphasized maximizing output, which some
workers thought should increase their pay as well.
! Frank Gilbreth
" Father of motion study that was applied to
small portions of a task
! Lillian Gilbreth
" Focused on the human factor in work and
dealt with worker fatigue

Document Summary

Chapter 1 introduction to operations management. Marketing: performs all activities directly related to producing goods or providing services, 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. Economic analysis of investment proposals: focuses on selling or promoting the goods or services, 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: how uniform the product is or if its customizable. Type of process: the degree of standardization and the volume of output influences the way a firm organizes its production process. Production of goods versus services: goods - results in a tangible output, services implies an act, differences involve the following. Customer contact, use of inventories, and demand variability. Operations managers and decision making.