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MGTA02H3 (363)
Chapter 1

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Department
Management (MGT)
Course
MGTA02H3
Professor
Tarun Dewan
Semester
Summer

Description
Lecture 1 Value Chain: Factors of Production => Organize Human Resources  Operations ManagementManagement Information Systems Marketing Accounting Finance => $$$$$$$$$ Operations: The process of turning factors of production into saleable goods and services. Transforming things Fabrication, Assembly, Chemical , Transportation Production implies that we make products. Products are tangible goods. Capacity Planning; forecast likely demand, are the facilities (shop, factory, warehouse, restaurant) big enough? Location Planning: figure out best place to locate facility. Close to –skilled labour, market, suppliers, sources of capital Layout Planning: Design the facility in a logical fashion Scheduling: When is your facility open? Many services are “high contact”. Services cannot be stored. Principal Topics Covered in this Lecture Operations defined - making the good or service Production vs. Operations - why we call it "operations" Producing "goods" vs. "services" - why services more difficult to provide What Operations Managers do The Importance of Operations Management Remember definition of business: "An organised effort to produce something that customers will buy.... " Definition of "business" implies: ability to make / produce / provide / supply the things people want. Customers will pay money if product or service you offer provides benefits. But: You must manage business in way that the product you claim to be offering is indeed what you offer. Trivial example: A coffee shop must be able to make coffee have it available around coffee time. Therefore: Business must be able to make / produce / provide / supply good or services: on time, (when people want it) on budget, (at a price they can afford) on specification, (according to customers' needs). Production management, or "operations" management is function of business concerned with producing things: as quickly, as cheaply, as reliably, as possible, to provide value or benefit to customers. Operations Management - 2 useful definitions The systematic direction and control of the processes that transform resources into finished goods The management of the creation of goods and services using the factors of production: land, labour, capital, entrepreneurship Operations Create Value Business is a "box" that takes factors of production (raw material, labour, capital) and transforms them into products or services which customers value. Operations involve taking raw materials/other factors of production and adding value or utility. Here's how you turn barley, and water, into beer: HOW TO MAKE BEER Examples of operations Fabrication: Cut something in half, bend it. Make a tree into paper. Assembly: Put pieces/different ingredients together. Make bread and cheese into a sandwich. Transport: Moving products/raw material f
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