Key terms

 agility

the ability of an organization to respond quickly to demands or opportunities.

 

 craft production

system in which highly skilled workers use simple, flexible tools to produce small quantities
of customized goods.
 

 division of labor

the breaking up of a production process into small tasks, so that each worker performs a
small portion of the overall job.
 

 e-business

use of the Internet to transact business.

 

 e-commerce

consumer-to-business transactions.
 

 ethical framework

a sequence of steps intended to guide thinking and subsequent decision or action.

 

 ethics

a standard of behavior that guides how one should act in various situations.
 

 goods

physical items produced by business organizations.

 

 interchangeable parts

parts of a product made to such precision that they do not have to be custom fitted.
 

 lead time

the time between ordering a good or service and receiving it.

 

 lean system

system that uses minimal amounts of resources to produce a high volume of high-quality
goods with some variety.
 

 mass production

system in which low-skilled workers use specialized machinery to produce high volumes of
standardized goods.
 

 model

an abstraction of reality; a simplified representation of something.

 

 operations management

the management of systems or processes that create goods and/ or provide services.
 

 outsourcing

buying goods or services instead of producing or providing them in-house.

 

 Pareto phenomenon

a few factors account for a high percentage of the occurrence

 

 process

one or more actions that transform inputs into outputs.

 

 services

activities that provide some combination of time, location, form, and psychological value.
 

 six sigma

a process for reducing costs, improving quality, and increasing customer satisfaction
 

 supply chain

A sequence of activities and organizations involved in producing and delivering a good or

service.
 

 sustainability

using resources in ways that do not harm ecological systems that support human existence.
 

 system

a set of interrelated parts that must work together.

 

 technology

the application of scientific discoveries to the development and improvement of goods and
services.
 

 value-added

the difference between the cost of inputs and the value or price of outputs.