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MGTA01H3 (583)
Chapter 1

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 1 Producing Goods and ServicesTermsService operations produces intangible servicesGoods operations produces tangible productsCreating Value through ProductionTermsOperation production management the systematic direction and control of the processes that transform resources into finished goods They are ultimately responsible for creating utility for customersProduction managers managers responsible for ensuring that operations processes create value and provide benefits As demand increases they must schedule and control work to produce amount required Meanwhile they must control costs quality levels inventory and plant and equipment An example of a production manager who does not work in a factory is a farmer converting soil seeds human labour and gas into agricultural products livestock and related products eggs milk They have the option of employing many workers to help them with the work or use automated machinery in order to do most of it for themExamples of Production SystemFarm Inputs land tractors equipment labour buildings fertilizer farmers management skillsTransformation cultivation of plants and livestockOutputs food products profit for owner jobs for farmers familyJewellery StoreInput fashionconscious customers merchandise sales clerks showroom fixtures equipmentTransformation exchange of merchandise between buyer and sellerOutput satisfied jewellery customersTire ProducerInputs rubber and chemical compounds blending equipment tire moulds factory and human skillsTransformation chemical reactions of raw materials Output tires for autos airplanes trucks trailers and other vehiclesGoodsProducing ProcessesTypes of Transformation Technology Chemical Processes raw materials that are chemically altered Such techniques are common in the aluminium steel fertilizer petroleum and paint industries Fabrication Processes the basic shape or form of a product that is mechanically altered Fabrication occurs in the metal form woodworking and textile industries Assembly Processes put together various components These techniques are common in the electronics appliance and automotive industries Transport Processes goods acquire place utility by being moved from one location to another An example can be seen in trucks moving finished bicycles from manufacturing plants to consumers through warehouses and discount stores Clerical processes transform information Combining data on employee absences and machine breakdown into a productivity report is a clerical process So is compiling inventory reports at a retail outlet
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