Operations and Production Management

MGMT 405

Answer set 1

MGMT 405 Operations and Production Management Answer set 1 (Reference chapters 1 William J. Stevenson-2007, ninth edition) Discussion Questions 1. What do you understand by the term Operations Management? ANS: Operations Management is the management of that part of an organization that is responsible for producing goods and/or services. The management of systems or processes that create goods and/or provide services. i.e. Every book you read, every e-mail you send or every medical treatment you receive involves the operation function of one or more organizations 2. Identify the three major functional areas of business organizations and briefly describe how they interrelate. ANS: Finance- is responsible for securing financial resources at favourable prices as well as analysing investment proposal and providing funds for marketing and operations. Marketing is responsible for assessing consumer needs or wants and selling and promoting the organizations goods and services. Operations is responsible for producing the goods or providing the services offered by the organization. 3. Describe the nature of operations function. ANS: The operations function consists of all activities that directly related to producing goods or providing services. It is the core of most business organizations because it is responsible for the creation of organizations goods or services. Its essence is to add value during the
2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.

Operations and Production Management

MGMT 405

Answer set 1

transformation process. The operations function involves the conversion of inputs into outputs. In other words, this process (value added) is the difference between the cost of inputs and the value or price of outputs.

4. List

five important differences between (Manufacturing) and service operation.

goods

production

ANS: 1. The nature and consumption of output 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 5. Briefly discuss each of these terms related to the historical evolution of operations management? a. Industrial Revolution b. Science management c. Interchangeable parts d. Division of Labor ANS: a. The Industrial revolution was the transformation of a society from peasant and local occupation into a society with world wide connections in terms of great use of machinery and large-scale commercial operations. It began in the 1770s in England, and spread to the rest of Europe and to the USA in the late eighteenth century and early nineteenth century. A number of inventions such as the steam engine, the spinning Jenny, and the power loom helped to bring about this change. Ample supplies of coal and iron ore are also help for generating the power to operate and build the machines. b. Frederick Taylor (1911) who is often referred to as the father of scientific management, published the priciples of scientific management. The science of management was based on observation, measurement, analysis, improvement of work methods and economic incentives. Management should be responsible for planning and
2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.

Operations and Production Management

MGMT 405

Answer set 1

finding the best way to perform each job as well as achieving cooperation between management and workers. c. Eli Whitney (1798) found out and introduced the concepts of standardised parts and interchangeable parts. Interchangeable parts are parts of a product made to such precision that each part would fit any of the identical items bring produced. This meant that individual parts would not have to be custom made because they were standardized. d. Adam Smiths The wealth of nations (1776) pointed out the importances and advantages of the division of labor where the production process was broken down into series of small tasks and each performed by a different worker. It enabled workers to learn jobs and become proficient at them more quickly as well as avoding the delays of workers shifting from one activity to another.

6. What are the main differences between manufacturing and services sectors? Use examples to justify your answer. ANS: Manufacturing and Service are often different in terms of what is done but quite similar in terms of how it is done. For example, manufacturers decide what size factory needed and service organizations must decide what size building is needed. Manufacturing and Service differ because manufacturing is goodsoriented and service is act-oriented. 7. Can you think of a business that does not have operation management? ANS: No, operations of function consists of all activities directly related to producing goods or providing services. Therefore operation management is a core function for any type of business and it exists in manufacturing and service organizations regardless of the type and the nature of business.
2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.

Operations and Production Management

MGMT 405

Answer set 1

8. Describe each of these systems: craft production, mass production, and lean production? ANS: Craft production involves producing high variety of customized goods, low volume output with skilled workers, and utilizing general-purpose equipment. The main advantage is the flexibility to produce a wide variety of outputs providing many choices for the need of customers. The main disadvantage is its inability to produce at low cost. Example: tailoring, machine shop, print shop, and landscaping. Mass production involves producing a few standardized goods at high volume of output with low skilled workers utilizing specialized equipment. The main advantage is the low cost, efficient production. The main disadvantage is that it does not allow easy changes in volume of output, product or process design. Example: automobiles, computer, mail sorting, appliances, paper, soft drink bottling, etc. Lean production involves producing more variety of goods than most production at moderate to high volume of output. It requires high skilled workers, quality, employee involvement, teamwork and flatter organizational structure with fewer levels of management. It combines the advantages of both mass production (high volume, low cost) and craft production (variety, flexibility). Example: similar to mass production. Multiple Choice Questions
Choose the one alternative that best completes the statement or answers the question.

1) Production/Operations Management is A) responsible for producing goods B) responsible for providing services C) system that create goods or services D) often referred to as the core of scientific management Ans: C
2) Operations Management does not affect A) The collective success or failure of companies POM B) companies financial resources C) Nations ability to compete internationally D) Companies ability to compete

Ans: B
2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.

Operations and Production Management

MGMT 405

Answer set 1

3) Which of the following part indicates the three Basic Functions?

A) Finance, marketing and management B) Finance, human resources and management C) Marketing, operations and finance D) Operations, finance and scientific management

Ans: C 4) The steps of the conversion of inputs into outputs are:

A) Input, process, transformation B) Labor, control, goods C) capital, land, service D) Input, conversion process, output

Ans: D 5) The operations function involves __________

A) The transformation process of inputs into outputs B) Feedback control C) Value added process D) Only goods process

Ans: A
6) Which of the following is not one of the input concepts? A) Labor B) Information C) Services D) Legal constraints

Ans: C 7) In profit organization, value-added of output __________

A) is measured by prices that customers are willing to pay for only those goods B) is measured by prices that customers are willing to pay for those goods and services. C) is their value to society. D) none of the above

Ans: B 8) Which of the following shows that it is the roots of the Industrial Revolution?
A) Egyptian pyramids B) Ancient Roads C) Ancient aqueduct D) The great wall.

Ans: A

2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.

Operations and Production Management

MGMT 405

Answer set 1

9) The steam engine and advanced the use of mecanical power to increase productivity indicate__________
A) The concepts of standardised parts and interchangeable parts. B) The handicraft era C) The Industrial revolution era D) The advantages of the division of labor

Ans: C 10) Lean production indicates__________

A) efficiency B) quantity C) The Industrial revolution era D) The Industrial globalization era

Ans: D

2010/11, Sami Fethi, EMU, All Right Reserved, Stevenson, Mcgraw-Hill, 2007, 9th. Ed.