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Chapter 1

MGTA02H3 Chapter Notes - Chapter 1: Gantt Chart, Master Production Schedule, Critical Path Method

Management (MGT)
Course Code
Chris Bovaird

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Chapter 1-Producing Goods and Services
successful recall
o measured by proportion of products that are returned
o if there is a risk to children, less than 90% return within 3 months is considered a
service operations
o production activities that yield intangible services
goods production
o production activities that yield tangible products
o historically referred to making physical goods
o today, means services as well
service sector
o focuses more on human element in operations, rather than technology
o usually has more customer involvement than producing goods
operations management
o the control of processes that transform resources into finished goods and services
production managers
o managers responsible for ensuring that operations processes create value and
provide benefits
Operations Processes
operations process
o set of methods and technologies used in the production of a good or service
Goods-Producing Processes
can be classified in 2 ways: type of transformation technology & analytic or synthetic nature of
transformation process
types of transformation technology
o chemical
chemically altering raw materials
o fabrication
mechanically altering shape of a product
o assembly
putting together various components e.g. electronics, automotive
o transport
moving from one location to the other (so that they can be used)
o clerical
combining data on employee absences and etc.
analytic vs. synthetic processes

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(the way that resources are converted into finished goods)
o analytic process
breaks down resources into components e.g. breaking down ore into
o synthetic process
combines raw materials to produce finished product e.g. paint
Service-Producing Processes
high-contact system
o system where the service cannot be provided unless the customer is physically in
the system
low-contact system
o system where the service can be provided without the customer being physically
present e.g. lawn care, bank cheque-processing
Differences between Service and Manufacturing Operations
Focus on performance
o goods are produced, while services are performed
o needs to have a customer-oriented performance
Focus on process and outcome
o while manufacturing only has to focus on the oucome, services focus on
transformation and outcome
Focus on service characteristics
o service products have 3 characteristics
o intangibility
intantgible value e.g. pleasure, satisfaction or feeling of safety
some serices can provide tangible elemnts as well e.g. attorney drafts will
o customization
services are customized
o unstorability
cannot be produced ahead of time and stored
Focus on customer-service link
o since the cx is often part of the operations process itself, they can affect it
o e.g. location of service, hours of operation etc.
Focus on service quality considerations
o it is possible for the quality of work to be good but service is poor, so need to
focus on high level of service as well
Operations Planning
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