OPERATIONS MANAGEMENT AND QUALITY
MANAGEMENT
Lesson #1
08/11/2021
OPERATIONS MANAGEMENT – It is the activity of
managing the resources that create and deliver services
and products.
 Resources – source of all resources, man-made
goods capable of producing another good. It
also has resources = raw materials that can be
an output of one production process.
Ex. Wheat to make bread. Where does wheat
first came from before becoming wheat and
before producing it into bread.
TYPES OF RESOURCES:
= Water resources
= Forest resources – raw materials that can’t be found
in lower lands such as huge trees for wood then
furniture production.
= Land resources – raw materials that can’t be found in
the forest such as palay, fruits and vegetables.
= Mineral resources
 Create – redo, innovate, assemble, add
additional inputs to created products.
 Deliver – make product available for consumers
consumptions.
 Services – intangible products. Offered to
people who requires them to pay for the service
rendered and not paying the ownership of the
person who gave service
Ex. You went to a hairdresser, bibilhin yung pag
gupit not the para gupit therefore after ka
magupitan you do not have ownership doon sa
para gupit.
 Product – tangible goods that consumer pays
for and what we want to acquire.
3 FUNCTIONS OF AN ORGANIZATION
MARKETING – responsible for communicating the
organization’s services and products to its market to
generate customer requests. Products are being
delivered.
advertise = tool ; promote = product
2 KINDS OF BUYERS
1. ACTUAL BUYERS – people who knows and buys
the product habitually
+ what marketers prioritize since they’ll refrain
from spending more in advertising.
2. POTENTIAL BUYERS – people who does not
know therefore does not buy. Can be
consumers who knows but still does not buy.
Knowing the demand -> will start the production
FINANCE – secure monetary resources at favorable
price and allocating them throughout the organization.
 Secure = we look for funds
 Monetary resources = amount of money we
need for operations, not too money and not too
little but with little excess to cover up (SAVE
ONLY THE EXCESS AMOUNT)
 Allocate = we distribute them where monetary
resources is needed
ACTIVITIES UNDER FINANCE FUCTION:
1. BUDGETING – budgets must be periodically
prepared to plan financial requirements. Must
be sometimes adjusted, and performance
relative to a budget must be evaluated.
+ if not practiced there will be shortage of
monetary resources.
2. ECONOMIC ANALYSIS OF INVESTMENT
PROPOSALS – evaluation of alternative
investments in plant and equipment requires
inputs from both operations and finance
people.
+ must first think before investing
3. PROVISION FUNDS – the necessary funding of
operations and the amount and timing of
funding can be important and even critical
when funds are tight.
+ careful planning can help avoid cash-flow
problems.

08/25/2021
INPUT-TRANSPUT-OUTPUT PROCESS
- Process that takes in set of input resources and
transform itself into outputs of services and
goods.
INPUT – resources needed to process outputs.
= both are being used and it depends on the
product.
OUTPUT – product or service and should always give
value to the customer.
+ can be extractive = (can’t be used directly and those
that require another transformation process -> never
ending unless you have achieved the product.) or
manufacturing.

6 M’s (management) CONTROLLING -> present in every step

 Money – differs from organization that needs + input – quality, quantity, delivery type because all will
them. Example if yung product na ipproduce affect the entire process.
need ng 10k capital therefore 10k need kesa
+ transformation – needs to be controlled or else it will
doon sa kabilang producer na need lang is 5k
not yield the kind of product we like.
para sa resources.
 Materials – varies to the product that you’ll + output – products should be ready according to the
produce. demand of customers.
 Method – know how to produce the product,
INFORMATION – transformation process changes
ano ang pasunod-sunod.
information properties.
 Machine – we use to produce goods and
services CUSTOMERS – who changes the materials into the
+ simple machines – levers, knife, scissors products that they like. Co-producer/production.
+ complex machines – push button machines
FACILITIES – buildings, equipment, plant and process
 Man power – people that are responsible in
technology of the operation.
converting raw materials to goods and services.
Needs skills that are relevant in production. STAFF – people who operate, plan, maintain, and
+ ex. tao na tatao mag luto banana que para sap manage operation. If >quantity = >staff
ag tinda ning banana que.
 Management – gives direction to the
organization. The one that plans, evaluate, an
direct production system.

INPUT (Economics) – factors of production

+ land

+ labor – man power (6 M’s)/ labor force = needs to be

18-60 yrs old and is capable of doing productive goods.

+ capital

TRANSFORMATION PROCESS/ TRANSPUT – manner to

which we choose to produce goods and services.

How?

1. Capital intensive means of production – users

are 70% machine and 30% labor.
2. Labor intensive means of production – 70%
labor and 30% machine.
 = new facility construction -> buid own factory
or rent?
= choice of technology
09/01/2021 = choice of location
+ middle
Functions of the operations manager = employment level -> look for people suited for
3 FUNCTIONS: the job
= output level -> how much can company
1. Directly responsible for production. produce
- To facilitate and not the one to produce the (output must be 50% above total output)
goods or services. = equipment selection
 2 activities: = allocating financial resources -> money
+ creation of the system design scheduled to buy materials for production.
= system capacity – are we capable of producing + first level
the product? = scheduling of personnel -> some work 24 hrs,
= geographic location of facilities – managers’ shifting.
offices are usually near sa production area to = adjusting output rate -> depende sa customer
observe/view the tasks being done. if magsawa agad sa product.
= arrangement of department and physical = controlling quality
structures = inventory replenishment -> all should know
= product and service planning – be sure that what their tasks is.
you can produce the product.
3. Responsible for the productive use of resources
+ system operations – putting into order the
plans in your system design.
= manage of personnel – must require
skills/technology among the employees
= inventory planning and control – materials
should be available at any time.
= scheduling product management – when to
start, when to stop production must be known.
= quality assurance – should be assured of
resources to acquire what customers want.
2. Engage in the day-to-day decision making
+ top management = for the overall direction of
the organization. Strategic decision making.
+ middle = make decisions in behalf of top but if
overall must seek permission to top. Tactical
decision making.
+ first level = non-managerial. Operational
decision making (actual).

(if pataas = feedbacking) (if pababa = order)

Scope:
+ top
= product selection -> what kind of product na
gusto nila/ mabenta?