Service operations - production activities that yield intangible services.
Goods production - production activities that yield tangible products.
Operations (production) management - systematic direction and control of the processes that
transform resources into finished goods and services.
Production managers - managers responsible for ensuring that operations processes create value and
Operations process -a set of methods and technologies used in the production of a good or service.
Analytic process - any production process in which resources are broken down.
Synthetic process – any production process in which resources are combined.
High-contact system – a system in which the services cannot be provided without the customer being
physically in the system.
Low-contact system – a system in which the services can be provided without the customer being
physically in the system.
Forecast – estimates of future demand for both new and existing products.
Capacity – the amount of a good that a firm can produce under normal working conditions.
Process layout – way of organizing production activities such that equipment and people are grouped
together according to their function.
Cellular layout – used to produce goods when families of products can follow similar flow paths.
Product layout – way of organizing production activities such that equipment and people are set up to
produce only one type of good.
Assembly line – type of product layout in which partially finished goods move through a plant on a
conveyor belt or other equipment.
Service flow analysis – analysis that shows the process flows that are necessary to provide a service to
a customer; it allows managers to determine which processes are necessary.
Master production schedule – schedule showing which products will be produced, when production
will take place, and what resources will be used.
Gantt chart – production schedule diagramming the steps in a project and specifying the time
required for each.
PERT chart - production schedule specifying the sequence and critical path for performing the steps
in a project.
Control - managers monitor production performances by comparing results with plans
Follow-up - checking to ensure that production decisions are being implemented.
Management - planning, organizing, and controlling the flow of materials from purchase to
distribution of finished goods
Standardization - using standard and uniform components in the production process. Transportation - means of transporting resources to the company and finished goods to buyers.
Warehousing - storage of both incoming materials for production and finished goods for
physical distribution to buyers.
Inventory control - in materials management, receiving, storing, handling, and counting of all raw
materials, partly finished goods, and finished goods.
Purchasing - acquisition of all the raw materials and services that a company needs to
produce its products.
Holding costs - costs of keeping extra supplies or inventory on hand.
Lead times - in purchasing control, the gap between the customer’s placement of an order
and the seller’s shipment of merchandise.
Supplier selection - finding and determining suppliers to buy from.
JIT production system - Just-in-time method of inventory control in which materials are acquired and
put into production just as they are needed.
Productivity – measure of efficiency that compares how much is produced with the resources
used to produce it
Quality - product’s fitness for use in terms of offering the features that consumers want.
Labour productivity - partial productivity ratio calculated by dividing gross domestic product by total
number of workers.
Management - concept that emphasises that no defects are tolerable and that all employees
are responsible for maintaining quality standards.
Performance quality - overall degree of quality; how well the features of a product meet consumers’
needs and how well the product performs.
Quality reliability - consistency of quality from unit to unit of a product.
Quality ownership - concept that quality belongs to each employee who creates or destroys it in
producing a good or service; the idea that all workers must take responsibility
for producing a quality product.
Re-engineering - redesigning of business processes to improve performance, quality, and
Supply chain - flow of information, materials, and services that starts with raw materials
suppliers and continues through other stages in the operations process until the
product reaches the end customer.
Management - principle of looking at the chain as a whole to improve the overall flow through
the system. Chapter 3
Information manager - manager responsible for the activities needed to generate, analyse, and
disseminate information that a company needs to make good decisions.
Management - internal operation that arranges the firm’s information resources to support
business performance and outcomes.
Data - raw facts and figures.
Information - a meaningful, useful interpretation of data.
Information system - an organized method of transforming data into information that can be used for
Technologies - information system applications based on telecommunications technologies.
Fax machine - a machine that can quickly transmit a copy of documents or graphics over
Voice mail - a computer-based system for receiving and delivering incoming telephone calls.
Email system - electronic transfer of letters, reports, and other information between
Conferencing - allows people to communicate simultaneously from different locations via
telephone, video, or email group software.
Groupware - a system that allows two or more individuals to communicate electronically
between desktop PCs.
Networks - global networks that permit users to send electronic messages quickly and
Internet - giganti