1. Briefly describe the terms operations management and supply chain.

Operations Management

This term refers to the system of whole production which starts from giving input of raw
materials to arranging the outputs of finished goods. This includes the role of Finance,
Marketing, Operations and Management. The subsections of management – planning,
organizing, leading and controlling also have a great impact on this. Its aim is to secure
maximum efficiency of a business practice. Its job is to design the whole production process and
redesign the process if required – which includes controlling measurement. To some extent, it
shapes the business structure and internal policies and procedures of an organization.

Supply Chain

It implies the whole process of delivering the raw materials to producers from their suppliers and
delivering the finished goods to the final consumers or to other producers from the initial one. It
may include individuals, organizations and their resources which they want to buy or sell. In a
perfectly competitive market, supply chain depends on demand and supply of that good. Even a
country has to have their own supply chain in order to cope up with its residents’ needs.

2. Identify the three major functional areas of business organizations and briefly
describe how they interrelate.

Three major functional areas of business are –

1.      Marketing

2.      Finance

3.      Operations Management

Interrelation                                                                                                                     

Every functional area of the business organizations is interrelated. For example, the Marketing
department does product development and promotional activities of their product. For this
purpose, they need a budget and funding which is taken care of by Finance. Then again, the
product which is designed by the Marketing department is produced by the Operations
Management department. The necessary cost for this activity is again budgeted by Finance.
Basically, in order to run a business efficiently integration of all three departments is required.
Hence, they are interrelated with each other from smaller to bigger scale.
 3. Describe the operations function and the nature of the operations manager’s job.

Operations Function

Operations function refers to the activities which are directly associated with the production
activity. This includes the forecasting to scheduling of raw materials to finished goods. However,
this function requires balanced support from all other functions of the organization in order to
assure resource and organizational efficiency. An effective utilization of this function from
planning to leading can help an organization to have a high growth. Basically, this is the most
basic function for producing products and services.

Nature of Operation Manager’s Job

Operations manager’s job starts from planning the capacity to monitoring the quality and
productivity. They look after every step of production even before the actual production starts.
They plan about the scheduling, production location, whether to produce everything on their own
or to buy it from others and so on. Moreover, they do forecasting, process selection and even
selecting the correct talent pool and labour force for getting the job done. Most importantly, they
look into increasing productivity through better inventory control and by maintaining quality
with lowest cost possible.

4. List five important differences between goods production and service operations;
then list five important similarities.

5 Differences

Goods Services

Nature of output is tangible Nature of output is intangible

Quality measurement and rework for scrap is Quality measurement and rework is very
easy difficult

Needs physical production facilities Always does not need physical operations
facilities
 Output is inventoriable Output is not inventoriable

Skilled labour generates better productivity Interactive employees generates better

5 Similarities

Goods Services

Main aim is to generate profit Main aim is to generate profit

Requires technological know-how Requires technological know-how

Produced based on demand Served based on demand

To succeed, needs to have customer To succeed, needs to have customer

Efficient promotional activity is required Efficient promotional activity is required

5. Why are services important? Why is manufacturing important? What are

Services are the intangible things that we have in our day to day life. Service is the one which
requires a very interactive talent pool in order to provide best quality to their consumers as the
contact point is pretty high. Some important services are education, health, utility services etc.
As we can see service is connected to our everyday life ranging from our home to workplace,
undoubtedly it is very important. Without the proper utilization of service even a country cannot
run smoothly. Moreover, as it is pretty connected with consumers, it helps to gain their loyalty
and brand name for a company.

Goods are tangible products which are also required in everyday life. Though they have
differences with services, in terms of importance they hold almost the same position with
service. However, it helps to run our daily life to work. Basically, service and products are
interrelated and so in order to accomplish one, another one is required. Some examples of goods
are, our technological devices, books, instruments of a doctor etc. Nevertheless, they also help a
company to achieve their financial goal and to have customer loyalty through customer
acquisition and retention.

Non-manufactured goods refer to the goods which are directly not produced in a production
facility. These kinds of products are not produced with the use of any machinery rather more
naturally. For example – raw vegetables produced through farming are of this type.

6.  What are models and why are they important? 

Models are basically ideal representations of a system which are usually tested and proved as
beneficial. It can be of different types but mostly it is used in order to test our hypothetical
assumptions. However, sometimes a model can be biased or due to improper plotting it can
provide wrong or vague outcomes.

In most cases, in order to be successful, we either test our assumptions through previous models
or create our own model and run it to see how good that does work. When we have less time and
a low budget, it is better to follow a previously well-established model so that we can utilize our
resources properly. In order to have accurate forecasting, we usually tend to rely on models.
Moreover, they help us to understand the already existing problems and the potential solutions of
those. Therefore, if a model is being followed, then the organization can face lesser difficulties
on employee incentive plan, product development, operations management and so on. But to be
cautious, we need to be sure enough if the model is accurate and if there is any trace of biasness.

7. Why is the degree of customization an important consideration in process planning?

Degree of customization is pretty important for process planning. Because the process planning
is dependent on the level of customization. Process planning implies the whole plan of the
preparation before the production which includes required raw materials and packaging
decisions. When a product has mass customization, it does not have any differences in its
products for anyone. As a consequence, this process planning becomes pretty simple and
identical for its whole production. For example, production of regular t-shirts, packaged food. On
the other hand, individual customization is a very complicated process and bulk products cannot
be produced in this criterion. Moreover, it may require different kinds of raw materials or
processes. Hence, the process planning needs to have these details. For example, customized
jewelry, m&m candies with names written on that.