Lesson 1

• Operation management - The management of systems or processes that create goods and/or services.
• • OPERATION Refer to the part of an organization that is responsible for producing goods and/or services.
• Goods - are physical items inclusive or raw materials, parts, sub-assemblies such as engine systems used in cars and final products such as computers.
• Services -  are activities that provide a combination of time, location, form, and psychological values.
• FINANCE - is responsible for securing financial resources at favorable prices and allocating those resources throughout the organization, as well as budgeting, analyzing investment proposals, and providing funds for operations
• MARKETING -  is responsible for assessing consumer wants and needs, and selling and promoting the organization’s goods or services.
• • OPERATIONS are responsible for producing the goods or providing the services offered by the organization.
• VALUE ADDED -  the difference between the cost of inputs and the value or price of outputs.
• MANUFACTURING and SERVICE are often different in terms of what is done but quite similar of how it is done. Both involve design and operating decisions.
• • Manufacturers must decide what size of  building is needed.
  • Service organization (e.g., hospitals)  must decide what size factory is needed
• The operations function includes many interrelated activities such as;

  • Forecasting
  • Capacity Planning
  • Scheduling
  • Managing Inventories
  • Assuring Quality
  • Motivating and Training employees
  • Location Facilities
• The chief role of an operation managers is that a planner and decision maker. Operation Management professionals make a number of key decisions that affect the entire organization.