Chapter 1 Operations and productivity

Chapter 1 Operations and productivity

1. Definitions

   • Operations managment
     • Set of activities that creates value in the form of goods and services by transforming inputs into outputs
   • Supply Chain
     • Is a global network of organizations and activities that supply a firm with goods and services.
   • Value Chain

2. Primary functions of all organizations

   • Marketing
     • Generates demand or at least takes the order for a product or servic.
   • Production/operations
     • Creates the product
   • Finance/Accounting
     • Tracks howis the organization doing, pays the bills and collects the money.

3. GOODS VS SERVICES

   • Services
     • Economic activities that tipically produce an intangible product such as education, entretainment. 
   • Similarities
     • Quality standards
     • Designed and produced on a schedule that meets the customer demand.
     • Made in a facility where people are amployed

4. Productivity

   • The ratio of outputs/goods and services divided by one or more inputs (labor, capital, managment). Improvement:  -Reducing inputs/constant output -Increasing outputs/constant input
   • Single
     • Indicates the ratio of resource (input) to the goodsand services produced (output)
   • Multifactor
     • indicates the ratio of many or all resources (inputs) to the goods and services produced (output)

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