LAUNGAYAN, ANGELICA Z.

OPERATIONS MANAGEMENT- BASIC PRODUCTION SYSTEM

NICE TO KNOW
The heart of operations management is a production management, producing goods or
services.
NEED TO DO
Companies need production systems to be able to run the production process. The
production system is developed based on the company’s product line and regulated to meet the
company’s goals.
NICE TO EXPAND
 The Basic Production System - every production system is built around a conversion that
takes various inputs and outputs such as products or services.
The production system has three main components:
 INPUT - are all the resources required for the manufacture of a product or service.
 The main inputs include material and supplies, personnel, and capital.
 Other inputs includes competitive information, demographic information, product
information and customer needs.
 Environmental inputs includes data on the legal aspect of doing business, social and
economic trends, and technical innovation.
 CONVERSION SYSTEM (also called the production process or technology) - any production
system that converts inputs (materials and human resources) into outputs (products or
services).
 It has several components. These include the production machinery, and its physical
layout, the transport services that bring in the inputs and deliver the final products to
customers, and storage services for goods awaiting shipment.
 OUTPUT - may be divided into direct output (the actual product or service) or indirect
output (such as taxes, wages and salaries, environmental impact, community impact).
 The same sequence applies to a service business like a public accounting firm. The inputs
include supplies, personnel, information, computers, buildings, office furniture, machines,
and utilities. The conversion system consists of attracts customers, compiles data, supplies
management information, computer taxes.The output/outcome is management
information, tax services, and audited financial statements.
NEED TO END
In the end, all business production can be reduced to four words: product, price, people,
and profits.