CHAPTER 2

• Production and Operation Management - deals with the creation of goods and services through the application of the business concept. They are also vital in both service and manufacturing firms.
• Production and Operation Management - has a primary objective, which is to employ the company’s resources to produce goods and services fit for the market.
• production system - of an organization is that part, which produces products of an organization.
• production system - It is that activity whereby resources, flowing within a defined system, are combined and transformed in a controlled manner to add value in accordance with the policies communicated by management.
• The production system has the following characteristics:

  A) ORAGANIZED ACTIVITY

  B) objective

  C) various inputs to useful outputs

  D) it does not operate in isolation

  E) feedback

  
• Classification of Production Systems

  continuous production

  mass production

  batch production

  job-shop production
• production system

  A) continuous production

  B) mass production

  C) batch production

  D) job-shop production

  
• job-shop Production - are characterized by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost.
• Job-shop Production - The distinguishing feature of this is low volume and high variety of products.
• Job-shop Production - compromises of general purpose machines arranged into different departments.
• Job-shop Production - Each job demands unique technological requirements, demands processing on machines in a certain sequence.
• Batch Production is defined by American Production and Inventory Control Society
• batch production - form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing.
• batch production - It is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales.
• mass production - Manufacture of discrete parts or assemblies using a continuous process
• mass production - This production is justified by very large volume or production. The machines are arranged in a line or product layout.
• mass production - Product and process standardization exists and all outputs follow the same path.
• continuous production - Production facilities are arranged as per the sequence of production operations from the first operations to the finished product.
• continuous production - The items are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices, etc.
• Production function - is that part of an organization, which is concerned with the transformation of a range of inputs into the required outputs (products) having the requisite quality level.
• production is defined as:

  A) step by step

  B) value addition process

  C) goods and services

  
• examples of production?

  manufacturing custom made product

  manufacturing standardized product
• Manufacturing Custom-Made Products -boilers with a specific capacity, constructing flats, some structural fabrication works for selected customers, etc.
• Manufacturing Standardized Products - car, bus, motor cycle, radio, television etc.
• operation - is defined in terms of the mission it serves for the organization, technology it employs and the human and managerial processes it involves.
• Operations - in an organization can be categorized into manufacturing operations and service operations.
• Operating system - converts inputs in order to provide outputs which are required by a customer.
• operating system - It converts physical resources into outputs, the function of which is to satisfy customer wants i.e., to provide some utility for the customer.
• Operating system - function of an organization is the part of organization that produces the organization’s physical goods and services.
• Operating system - is a configuration of resources combined for the provision of goods and services.
• Manufacturing operations and service operations are often different in terms of what is done but quite similar in terms of how it is done.
• difference between manufacturing operations and service operations

  degree of customer contact

  labor content of jobs

  measurement of productivity

  quality assurance

  inventory

  wages

  ability to patent
• Degree of customer contact - Many services involve a high degree of customer contact, although services such as Internet providers, utilities, and mail service do not.
• When there is a high degree of contact, the interaction between server and customer becomes a “moment of truth” that will be judged by the customer every time the service occurs.
• Labor content of jobs - Services often have a higher degree of labor content than manufacturing jobs do, although automated services are an exception.
• manufacturing operations - often have a greater ability to control the variability of inputs, which leads to more-uniform job requirements.
• Measurement of productivity can be more difficult for service jobs due largely to the high variations of inputs.
• Quality assurance - is usually more challenging for services due to the higher variation in input, and because delivery and consumption occur at the same time.
• services - tend to involve less use of inventory than manufacturing operations, so the costs of having inventory on hand are lower than they are for manufacturing
• manufactured goods - can be stored