Assignment 1- Operations Management

202102769 Tejas Cyril Elias

1. Operations Management is the management of the various process which

are used to make goods/services. It is important to all organizations
because it overlooks and coordinates with various departments in order to
achieve the organizational goals efficiently and effectively. It is very
important to any organization because it helps to reduce expenses and
increase profits. Operations Management involves various other
departments of the organization to achieve the goals of the business.

2. The major functional areas of an organization are – Operations, Finance,

and Marketing. Operations are important as it takes the raw materials
or inputs and coordinates with other departments to convert them into the
final product for sale. Ex. Conversion of wheat into whisky, a lot of
processes are involved such as wheat, fermenting the wheat, distillery,
and packaging, These won’t go smoothly without Operations.
Finance- It provides the necessary funds to cover the costs of the
materials and services needed to run the organization. Ex. It provides the
fund to buy the wheat, pay for the factory and workers, etc.
Marketing- It helps in procuring the orders so that the organization can
make sales and then profits. Ex. Ads during a public event cause people
to remember the product while they go shopping, hence creating demand.
Only when these 3 coordinate and work hand in hand the company can
achieve its goals, As together they can communicate and reduce costs and
provide the best customer satisfaction.

3. Services are important because they are intangible in nature and deals
with customers directly. They can’t be measured and usually, the cost
inputs are lower. These are easy for organizations to make a profit from.
Ex. Hotels are relatively cheaper to set up than a factory to make beer, If
the hotel staff is polite and courteous to the customer and provides them a
 nice room to stay in, the customer is likely to be satisfied and return. The
labor cost is cheaper as well to the factory, hence the organization can
easily make a profit. That’s why services are important. Example 2-
Library provides book renting service to its customers, if the librarian is
kind and helpful and the library has the books the customers need the
customer will return.
Manufacturing is important because the inputs and outputs are tangible,
There is less customer contact, easy to track the level of productivity and
quality. The cost of labor is low. If the organization manufactures a
product that is high in demand with the right process they can make a lot
of profit. Ex. Toyota manufactures cars through kaizen, zero wastage, and
makes a lot of profit. Apple manufactures phones in China where the cost
of labor and raw materials is less, they assemble it in the US.

4. Strategy planning is the various plans the organization makes in order to

achieve the goals of the organization while keeping in mind the mission,
vision, and values of the organization. Strategy planning gives the
organization a direction and path to move towards. It is important because
it ensures everyone is on the same page and knows what they have to do
in order to achieve the goals. It keeps the employees motivated and
focused. It also helps in making decisions as it keeps the manager from
diverting their attention to other projects.

5. The four key purchasing criteria are – price, variety, on-delivery time,
and quality.
 Price – It plays an important role when customers want to purchase
a product. Customers tend to go for the lowest price but in some
cases, they prefer the other options as well. If 2 products are
identical in nature ex. Vendor A sells apples at $1 and vendor B
sells them for $.75, the customer would choose B.
 Variety -This refers to the other various types, models or versions
of a product available to the customer. Ex. A customer has an
option to buy a car, which has a sports version and an electric
version as well. The customer will buy which version he prefers, he
has the ability to choose.
 On-time Delivery – If a product will reach a customer within his
preferred timeline, he would purchase the product. If the delivery
time is longer compared to his timeline, he may look for other
 options. Ex Seller A can deliver a book in 3 days whereas Seller B
can sell the same book in 2days. Customers usually would go with
B because of faster delivery.
 Quality – Customer will also look at the quality of a product before
purchasing it, this involves the way the product is made,
sustainability, skilled craftsman, design, handiness, performance,
creativity, etc. Ex. A person looking for a laptop has 2 options- A
which is a regular laptop with a good performance. Or B a laptop
with good performance, good design and made by a well-reputed
company. The customer may let go of the cost and settle with B as
it has a better quality.

6. Productivity = Output/ Input

Output = snowblowers
Input =workers

Last week = 400 snowblowers/8 workers

= 50 snowblowers per worker

This week =255 snowblowers/5 worker

= 51 snowblowers per week

This week has the higher productivity as this week each worker was
able to produce more snowblowers, compared to last week where
snowblowers produced by each worker were lesser. This could be
because more skilled workers were present this time leading to higher
productivity.