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Major function in business organization

 Marketing-generate demand
 Production/operation-create the product
 Finance/accounting-pay bills and collect money
2. Value added to operation management
A key objective for an Operations Management is the ability to increase the value-
added during the transformation process. Value-added is the difference between the
cost of inputs and the value or price of outputs. This is an indicator of the
effectiveness of the operation. On the other hand, if an activity does not add value, it
will most likely get eliminated or re-examined for improvement. In this case it falls
into its main function of more planning and decision making.
3. Difference between manufacturing and service organization
Service- provide intangible products, product cannot be inventoried, high customer
interaction, inconsistent product definition
Manufacturing- tangible products, product can be inventoried, low customer
interaction, consistent product definition
4. Different between strategy and tactical decision
Strategic intelligence is future-oriented, allowing a company to make educated
decisions regarding future conditions in its marketplace or industry.
Tactical intelligence deals with the here and now. It provides decision makers with the
necessary information to watch for changes in the company's current operating
environment and helps them discover new opportunities.
strategic planning focuses on the long term and tactical planning on the short term
strategic is doing the right things -- tactical is doing things right.
5. Productivity definition
A measure of the efficiency of a person, machine, factory, system, etc., in converting
inputs into useful outputs. Productivity is computed by dividing average output per
period by the total costs incurred or resources (capital, energy, material, personnel)
consumed in that period. Productivity is a critical determinant of cost efficiency.
6. Definition of operation strategy
A plan specifying how an organization will allocate resources in order to support
infrastructure and production. An operations strategy is typically driven by the overall
business strategy of the organization and is designed to maximize the effectiveness of
production and support elements while minimizing costs.
7. Category of competitive priority
Quality, time, cost and flexibility
8. Three productivity variables
1) Basic education appropriate for an effective labour force. 2) Diet of the labour
force. 3) Social overhead that makes labour available, such as transportation and
9. Four stage of product design process
1. Introduction: During the first stage, the product is introduced into the
market. Proper research and forecasting should be done to ensure the
product/service is adequate for a specific market and for a specific time. It
is crucial to have a proper amount of supply that can meet the expected
demand for the product/service.
2. Growth: The second stage involves the increase in demand for the
product/service. Reputation for the product grows and an accurate
forecast of demand is needed to determine the length of time the
product/service will remain in the market. Enhancements and
improvements are common in this stage.
3. Maturity: This third stage deals with the product reaching a steady
demand. Few or no improvements or product changes are needed at this
stage. Forecasting should provide an estimate of how long it will be before
the market dies down, causing the product to die out.
4. Decline: The last stage involves choosing to discontinue the
product/service, replacing the product with a new product, or finding new
uses for the product.
10. Difference between intermittent and repetitive operation

11. Element of service package purchases by a customer

12. Main component of supply chain
Every company needs a strategy on how to manage the resources in order to achieve
their customers demand for their products and services. The supply chain management
is developing a set of metrics to monitor the supply chain so that it can deliver high
qualities and values to customers.
To create their products, companies need to be very careful when choosing suppliers to
deliver their goods and services needed. The managers need to develop a set pricing
and delivery system in the supply chain. They can also put processes for managing their
goods and goods inventory, for example; receiving shipments.
In manufacturing the supply chain manager should always schedule the activities that
are needed for the production, packaging, testing and preparation for delivery.The most
metric-intensive portion of the supply chain, production output and measure levels.
This part is mainly referred to as logistics by the supply chain management. In this case
companies coordinate receipts of orders, pick carriers to get products to customers and
develop a network of warehouses.
In many companies this is usually where the problem is – in the supply chain.The
planners should create a flexible and responsible network for receiving a flaw and
excess products sent back to them (from customers).
13. Cause of bullwhip effect
The bullwhip effect exists in all supply chains — it’s the root of the boom and bust
cycles that occur in many operations — and it can be devastating if not properly
managed. Fortunately, you have ways to manage the bullwhip and minimize its impact.
The bullwhip effect is triggered by several different causes. Here are four of the most
prevalent causes.
14. Roles of purchasing

15. Advantages of cross docking

 Reduces material handling.

 Reduces need to store products in warehouse.
 No need for large warehouse areas
 Reduced labour costs (no packaging and storing).
 Reduced time to reach customer.
 Transportation has fuller loads for each trip therefore a saving in transportation costs
while also being more environmentally friendly.

 Products are moved more quickly through a cross dock.

 Easier to screen product quality.
 Elimination of processes such as ‘pick-location’ and ‘order picking’
 Cross docking terminals are less expensive to construct than your average warehouse.
 High turnover of products with everything moving quickly through the cross docking
terminal. Products usually spend less than 24 hours here.
 Products destined for a similar end point can be transported as a full load, reducing
overall distribution cost.