CBME: MIDTERM EXAMINATION REVIEWER
Production/Operations Management -
process which combines and transforms
various resources used in the
production/operation system of the
organization.
Production Management - set of
interrelated activities which are involved in
manufacturing.
Operation Management - set of managerial
activities extended to services management.
NATURES OF PRODUCTION AND
OPERATIONS MANAGEMENT
Production/Operations as a system -
views any organization or entity as an
arrangement of interrelated parts that interact.
● Production - collects input into a desired
output.
Production/Operation as a
Organizational Function - to create goods
and services.
● Marketing - generates demand.
● Production/Operations - produce goods
and services.
● Finance - keeps track, take care of cash
inflow and outflow.
INTER-ORGANIZATIONAL - relationship
exists between the suppliers and department.
INTRA-ORGANIZATIONAL - cross
functional coordination.
Utility - power of satisfying the human needs.
TYPES OF UTILITY
Form Utility - changing in size and shape.
Time Utility - storage or preservation of raw
materials.
Place Utility - changing of places of input.
Possession Utility - transforming possession
from one place to another.
Service Utility - rendering service to
customers.
Knowledge Utility - impairing knowledge to
one person.
Production Management - refers to
management principle to the production
system.
OBJECTIVES OF PRODUCTION
MANAGEMENT
Right Quality - based on customer’s needs.
Right Quantity - production of products in
numbers.
Right Time - timeliness of delivery.
Right Manufacturing Cost - manufacturing
date.
Operations Management - refers to the
activities that creates value in the form of goods
and services.
OBJECTIVES OF OPERATIONS
MANAGEMENT
Right Principle - actions should respect and
protect moral rights.
Fairness Principle - equals should be held
to.
Common Good Principle - actions should
contribute to common goods.
Virtue Principle - consistent with ideal
virtue.
1
CBME: MIDTERM EXAMINATION REVIEWER
BS ACCOUNTANCY 1-B

FORMULA OF FORECAST ERROR

ACTUAL - FORECAST
Mass Production - large amount of volume
of production.
Location of Facilities - location of the
business/operation.
Contribution Margin - represent the total
earnings available to pay for the fixed
expenses.
Contribution Margin Ratio - the difference
between the company’s sale and variable
expenses, expressed in percentage.
Product Design - conversion of ideas into
reality.
Process Design - is a macroscopic decision-
making.
Plant Layout - design a physical arrangement
that meets the required output quality and
quantity.
Material Handling - art and science of
moving, packing and storing of products in any
form.
Process Yield - ratio of output of a good
product.
Planning - establishes a course of action
Organizing - establishes a structure of task or
authority.
Controlling - assures that the actual
performance in accordance to the planned
performance.
Batch Production - limited amount of
products only depends on the regular interval
or stocks awaiting sales.
Frederick Winslow Taylor - Father of
Scientific Management
Productivity - index that measures output
relative tp the input used to produce it.
FORMULA OF PRODUCTIVITY
PRODUCTIVITY = INPUT/OUTPUT
The formulas used to compute MAD,
MSE, and MAPE are as follows:

Variable Cost - cost that vary directly with

the level of output. FORMULA OF FORECAST ERROR
TWO TYPES OF VARIABLE COST

Direct - directly attributable to the

production.
Indirect - cannot be directly attributable.

2
CBME: MIDTERM EXAMINATION REVIEWER
BS ACCOUNTANCY 1-B

FORMULA OF BREAKEVEN ANALYSIS 8 SCOPES OF PRODUCTION AND

OPERATIONS MANAGEMENT
1. Location of Facilities
2. Plan Layout and Material
Handling
3. Product Design
4. Process Design
5. Production Planning and Control
6. Quality Control
7. Material Management
8. Maintenance Management
FORMULA OF PRODUCTIVITY

4 OBJECTIVES OF PRODUCTION
MANAGEMENT
1. Right Quality
2. Right Quantity
3. Right Time
4. Right Manufacturing Cost
6 TYPES OF UTILITY
1. Form Utility
3 ROLES OF FORECAST
2. TimeUtility
1. Basis of Planning
3. Place Utility 2. Facilitating Co-ordination and
4. Possession Utility Control
3. Success in Organisation
5. Service Utility

6. Knowledge Utility

3
CBME: MIDTERM EXAMINATION REVIEWER
BS ACCOUNTANCY 1-B

5 KEY ISSUES FOR TODAY’S

7 ELEMENTS OF A GOOD FORECAST BUSINESS OPERATIONS
1. Economic Conditions
1. The Forecast should be timely.
2. Innovating
2. The Forecast should be accurate
3. Quality Problems
and the degree of accuracy should
4. Risk Management
be stated
5. Competing in a Global Economy
3. The Forecast should be reliable
4. The Forecast should be expressed
in meaningful units
5. The Forecast should be in writing
6. The Forecasting Technique should
be simple to understand and use
7. The Forecast should be cost-
effective

5 ROLES OR RESPONSIBILITIES OF
AN OPERATION MANAGER
1. Meeting requirements of quality
demanded by customers
2. Establishing realistic delivery or
completion dates
3. Producing the required volume of
products to meet the demand
4. Selection and application of most
economic methods or processes
5. Controlling the cost of inputs and
conversion process and thereby
keeping the cost of outputs within
the desired limits