Textbook Notes (368,128)
Canada (161,665)
MGTA02H3 (363)
Chapter 1

Chapter 1

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Management (MGT)
Chris Bovaird

Chapter 1 Producing Goods and Services Service operations are production activities that yield intangible services. o Provides services such as entertainment, transportation, education, and food preparation. Goods production is production activities that yield tangible products. o Firms make tangible products such as radios, newspapers, buses, and textbooks WHAT DOES PRODUCTION MEAN TODAY? Although the term production has been referred to as the making of physical goods, the concept as we now use it also means services. Many of the things we need or want, from health care to fast food, are produced from service operations. Service-sector managers focus less on equipment and technology than on the human element in operations because success or failure may depend on provider-customer contact. Consumers today are increasingly involved in all kinds of production because electronic communications are key components in winning and keeping customers in a huge range of competitive industries. o Orders are placed faster, schedules are accelerated, and delivery times are shrinking. The Growth of Global Operations Production operations have also become much more environmentally friendly. www.notesolution.comCREATING VALUE THROUGH PRODUCTION Products provide businesses with both economic results (profits, wages, goods purchased from other companies) and non-economic results (new technology, innovations, pollution). Because the term production has historically been associated with manufacturing, it has been replaced by operations. Operation is a term reflecting both services and goods production. Operation management is the systematic direction and control of the processes that transform resources into finished goods and services. Operation managers are ultimately responsible for creating utility for customers. Production managers are managers responsible for ensuring that operations processes create value and provide benefits. o As demand for good increases, they must schedule and control work to produce amount required. Meanwhile, they must control costs, quality levels, inventory, and plant and equipment. Not all production managers work in factories. Farmers are also production managers. As production managers, farmers have the option of employing many workers to plant and harvest their crops. Operations Processes An operations process is a set of methods and technologies used in the production of a good or a service. We can describe goods according to the kind of transformation technology they require, or according to whether their operation process combines resources or breaks them into component parts. We can describe services according to the extent of customer contact required. Goods-Producing Processes All goods-manufacturing processes can be classified in two different ways: by the type of transformation technology that transforms raw materials into finished goods www.notesolution.com
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