DISCUSSION AND REVIEW QUESTIONS

1. Operation management is the management of systems or processes that create goods and/or provide services. Supply chain is a
sequence of organization – their facilities, functions, and activities that are involved in producing and delivering a product or
service.

2. The three major functional business organizations are finance, marketing, and operations. Finance is responsible for securing
financial resources, marketing is responsible with promoting and/or selling goods or services, and operations is responsible for
creation of goods and services.

3. Operation function consists of all activities that related in producing goods and providing services. It is the core of most business
organizations because it is responsible for the creation of goods or services.

4. The five differences between goods production and service operations

a. Degree of customer contact

b. Labor content of jobs

c. Uniformity of inputs

d. Measurement of productivity

e. Quality assurance

The five similarities between goods production and service operations

a. Forecasting and capacity planning to match supply and demand

b. Process management

c. Managing variations

d. Monitoring and controlling costs and productivity

e. Supply chain management

5. a. The Industrial Revolution began in the 1770s in England, and spread to the rest of Europe and to the U.S. during 19 th century.
A number of inventions such as the steam engine, the spinning Jenny, and the power loom helped to bring about this change.
There were also ample supplies in coal and iron ore to provide the necessary materials for generating the power to operate and
build the machines that were much stronger and more durable that the simple wooden ones they replaced.

b. The scientific management era brought widespread changes to the management of factories. The movement was spearheaded
by the efficiency engineer and inventor Frederick Winslow Taylor, who is often referred to as the father of scientific management.
The science of management was based on observation, measurement, analysis, improvement of work methods, and economic
incentives. Management should be responsible for planning, carefully selecting and training workers, finding the best way to
perform each job, achieving cooperation between management and workers, and separating management activities from work
activities.

c. Parts of the product made to such precision that each part would fit any of the identical items bring produced. It meant that
individual parts would not have to be custom made because they were standardized.

d. Breaking up a production process into a series of tasks, each performed by a different worker. It enabled workers to learn jobs
and become proficient at them more quickly, avoiding the delays of workers shifting from one activity to another.
6. Services is important

Manufacturing is important because it supplies a large proportion of exports and many services jobs.

The example of non-manufacturing goods is farm products because there is no production and products naturally grow without
human intervention.

7. Physical models, schematic models and mathematical models. They are important because models play a significant role in
operation management decision making, they are heavily integrated into the material of this text.

8. Degree of customization has important implications throughout a business organizations. Higher degrees of customizations
involve more complexity in terms of production or service and require higher worker skills, and have lower productivity.

9. a. repairs, initial cost, taxes, parking

b. productivity, cost, technology, cost

c. monthly payment and interest, repairs, warranty, initial cost

d. class participation, control of the situation

e. It depends of customers type on what is being offered of the product or services

10. Craft production is the system in which highly skilled workers use simple, flexible tools to produce small quantities of
customized goods.

Mass production is the system in which low-skilled workers use specialized machinery to produces high volumes of standardized
goods.

Lean production it involves producing more variety of goods than most production at moderate to high volume of output. It
requires high skilled workers, teamwork, quality, employee involvement.

11. More worker is stress to level of responsibility that why some workers prefer not to work in lean production.

12. a. Marketing supply and demand is important objective in business organization. Opportunity cost and dissatisfied customer is
the result of undersupply. Reduce and dispose is the result of additional cost of oversupply.

b. Managing a supply chain is important in reducing transportation costs, managing inventories, and achieving supply chain
visibility.

13. Four basic sources of variations

1. The variety of goods or services being offered. The greater the variety of goods and services the variation in production or
service requirements.

2. Structural variation in demand. This is important in capacity planning.

3. Random variation. This variability present some all processes and cannot be influenced by managers.

4. Assignable causes of variation. The incorrect work methods, defective inputs, are the cause of variation.

14. People do things that are unethical because they are lack of morals and lack of sensitivity towards a given issue.

15. The value added is the difference between the cost of inputs and the value or price of outputs.

16. Outsourcing can result loss of control and result in lower cost.

17. Sustainability is using resources in ways that do not harm ecological system that support human existence. Business
organizations increasingly sustainability to go beyond traditional environmental and economic measures.
CASE STUDY: HAZEL

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