OPERATION MANAGEMENT

Answer the following short questions

1. Scope of Operations Management

Operations Management (OM) encompasses the planning, organizing, and supervising of processes
involved in production, manufacturing, or the provision of services. Key areas include:

 Production Planning: Determining what products to produce, when, and in what quantities.
 Quality Management: Ensuring products/services meet quality standards through techniques
like Six Sigma.
 Supply Chain Management: Overseeing the flow of goods from suppliers to customers.
 Inventory Control: Managing stock levels to minimize costs while meeting customer
demands.
 Process Design: Creating efficient workflows and processes to optimize productivity.
 Capacity Planning: Assessing the production capacity needed to meet changing demands.

2. Differentiate Between Product and Service Design

 Product Design: Focuses on creating tangible goods. Involves considerations like materials,
aesthetics, functionality, and manufacturability. The goal is to develop products that meet
customer needs and can be produced efficiently.
 Service Design: Concerns intangible offerings. It emphasizes the user experience, service
delivery, and interaction between the service provider and the customer. Key aspects include
service environment, service blueprinting, and employee training.

3. Transportation Models

Transportation models are optimization techniques used in operations management to minimize

transportation costs while meeting supply and demand constraints. These models typically involve:

 Objective Function: Minimize total transportation costs.

 Constraints: Include supply limits at origins and demand requirements at destinations.
 Applications: Used in logistics to determine the most cost-effective way to transport goods
between multiple suppliers and consumers.

4. What is Layout?

Layout refers to the physical arrangement of resources (such as machinery, workstations, and
employees) within a facility. Effective layout design aims to:

 Enhance Efficiency: Reduce movement waste and streamline operations.

 Improve Workflow: Facilitate the smooth flow of materials and information.
 Increase Safety: Ensure a safe working environment for employees. Types of layouts
include process, product, fixed-position, and cellular layouts.

5. What is Linear Programming?

Linear Programming (LP) is a mathematical method for determining the best possible outcome in a
given mathematical model, subject to constraints. It involves:

 Objective Function: A linear function that needs to be maximized or minimized (e.g., profit
or cost).
 Constraints: A set of linear inequalities or equations that limit the possible solutions.
 Applications: Used in various fields such as economics, military, transportation, and
manufacturing for resource allocation.

6. Methods of Scheduling

Scheduling methods are techniques used to allocate resources and plan tasks to optimize
productivity. Common methods include:

 Gantt Charts: Visual representation of tasks over time.

 Critical Path Method (CPM): Identifies the longest sequence of tasks that determines
project duration.
 Program Evaluation and Review Technique (PERT): Analyzes tasks involved in
completing a project, accounting for uncertainty in task durations.
 Priority Scheduling: Orders tasks based on priority levels (e.g., FIFO, LIFO, Shortest Job
First).

ANSWER FOLLOWING QUESTIONS

1. Major Differences Between Goods and Services

Goods are tangible products that can be seen, touched, and stored. Examples include:

 Physical Products: Cars, clothing, electronics (e.g., smartphones).

 Durable Goods: Items that last for an extended period, like appliances.
 Non-Durable Goods: Consumables such as food and toiletries.

Characteristics of Goods:

 Tangibility: Physical presence allows for inspection before purchase.

 Consistency: Products can be standardized and produced in bulk.
 Ownership: Buyers gain ownership of the product after purchase.

Services are intangible offerings that cannot be owned or touched. Examples include:

 Professional Services: Consulting, legal advice, and medical services.

 Experience Services: Hotel stays, entertainment, and tourism.
 Maintenance Services: Cleaning, repair, and personal grooming.

Characteristics of Services:

 Intangibility: Cannot be physically possessed; quality is assessed through experience.

 Variability: Quality can vary from provider to provider or even from one instance to another.
 Inseparability: Production and consumption occur simultaneously (e.g., a haircut).
2. Strategic Capacity Planning for Products and Services

Strategic Capacity Planning involves determining the overall capacity a business needs to meet
expected demand. The process differs between products and services:

For Products:

 Forecasting Demand: Analyze historical sales data, market trends, and economic indicators
to predict future demand.
 Production Capacity Assessment: Evaluate current facilities, equipment, and labor force to
determine if they meet demand forecasts.
 Scaling Up or Down: Decide on expansions, additional shifts, or outsourcing based on
predicted needs. Implement Lean manufacturing techniques to optimize processes.
 Flexibility Considerations: Plan for variations in demand and ensure that capacity can be
adjusted as needed.

For Services:

 Demand Variability: Services often experience fluctuations in demand (e.g., seasonal

trends), necessitating flexible capacity planning.
 Staffing Levels: Determine appropriate staffing based on demand forecasts and service time
requirements (e.g., hiring temporary staff during peak seasons).
 Facility Design: Create adaptable spaces that can handle different types of services or
customer volumes (e.g., modular designs in restaurants).
 Technology Utilization: Implement technology (like online booking systems) to manage
customer flow and improve service delivery.

3. Quality and Quality Control Methods

Quality refers to the degree to which a product or service meets customer expectations and
requirements. It encompasses various attributes, including performance, reliability, durability, and
aesthetics. High-quality goods and services lead to customer satisfaction, loyalty, and competitive
advantage.

Quality Control Methods:

 Statistical Process Control (SPC): Uses statistical methods to monitor and control
production processes. Control charts help detect variations and maintain process stability.
 Total Quality Management (TQM): An organization-wide approach focusing on
continuous improvement in all aspects of operations. Involves employee involvement and
customer feedback.
 Six Sigma: A data-driven methodology aimed at reducing defects and improving quality. It
employs the DMAIC (Define, Measure, Analyze, Improve, Control) framework to identify
and eliminate causes of errors.
 Quality Audits: Systematic examinations of processes to ensure compliance with quality
standards and identify areas for improvement.

Necessity of Quality Control in Business Operations:

  Customer Satisfaction: Ensures products/services meet expectations, fostering loyalty and
repeat business.
 Cost Reduction: Identifying defects early reduces rework, returns, and warranty claims,
lowering overall costs.
 Brand Reputation: Consistently delivering quality enhances brand image and competitive
positioning in the market.
 Regulatory Compliance: Adhering to industry standards and regulations minimizes legal
risks and liabilities.

In summary, understanding the differences between goods and services, effectively planning
capacity, and implementing robust quality control methods are critical for successful operations
management. These elements not only enhance efficiency and customer satisfaction but also
contribute to the long-term sustainability and growth of the business.