Mgmt 372 - Marketing Study

MGMT 372 Test 1 Study Guide

The test will come entirely from the material here, with the highlighted material prioritized.

Chapter 1 – Introduction to Operations Management

1. What is an Operations Manager?  Let’s break that title apart. 

1. When we serve as a manager, we typically are managing people. This is the perspective of management we get from MGMT 371 (Organization Behavior and Management) and MGMT 374 (Human Resource Management).  We are managing people within an organization of people.  That is very important.

1. But we are also managing a function.  If are managing a department in a company, that department has a function, in the context of all the other departments' functions that work together to fulfill the mission of the company.  That function may be to maintain the computer systems.  That function may be to assemble BMWs.  That function may be to litigate legal cases.  The MGMT 372 perspective is how an operations manager manages that function. 

1. What does it mean to manage a function?  It means to be responsible for the operation meeting its performance measures such as production quantity, quality, cost, labor use, etc.  It means you are responsible for troubleshooting and correcting problems.  It means you are responsible for determining improvement actions and implementing them to improve the operation’s performance.

1. We are going to study how to manage functions in general, regardless of the function, and we are going to study some specific functions common to many companies.

1. My hope for you is that after you finish this class, and when you get a job being a manager, or start your own company to manage, you are a more effective manager of its operations because of this class.

1. Three Categories of Functions Necessary for any Business – Sales/Marketing, Operations, Finance/Accounting

1. What functions or departments fall under operations?

1. The primary one is production.  We can define this as the set of activities that produces the goods and/or services that an organization offers.  The set of activities that create value by transforming inputs into outputs.
2. Product Development
3. Maintenance
4. Human Resources
5. Maintenance
6. Logistics / Shipping
7. Supply Chain / Purchasing
8. Process Engineering
9. Quality
10. Forecasting Sales
11. Production Scheduling
12. Purchasing and Supply Chain Management

1. Where are operations managers in these examples?

1. Performance measures are something I will emphasize repeatedly in this class.  Performance measures, first of all, define what is important for the function to achieve for the success of the organization.  Second, performance measures assess how well the function is performing.  What are some performance measures for organizations’ functions?

1. Productivity = Units Produced / Input Used
2. Quality ($ in returns, number of returns, % returns, defect rate)
3. Cost ($)
4. Lead Time or Cycle Time (minutes, hours, days, etc.)
5. Safety (accidents or injuries by OSHA category)
6. Customer Satisfaction
7. On Time Delivery

1. Differences Between Service and Manufacturing Businesses

1. Goods (tangible product) versus Service (intangible product) versus a combination of the two.
2. Give examples of the three categories:

1. Book, TV production, airplane mfg, farming, etc.
2. Education, repair shop, beauty services, hotel, airline
3. Restaurant

1. Aspects of a service vs. goods

1. No inventory, produced and consumed simultaneously
2. Cannot resell product
3. Product is not transportable
4. Unique
5. High customer interaction
6. Selling is not as distinct from production
7. Often tailored to each customer
8. Difficult to automate

1. Growth of Services - Largest economic sector, and growing.

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Chapter 2 – Competitiveness, Strategy and Productivity

1. Let me start by again emphasizing the importance of performance measures.  Performance measures are important for at least two reasons:

1. Performance measures define and focus attention on what is important.
2. Performance measures give objective information on the performance of the operation, allowing the manager to assess, troubleshoot and improve the operation.

1. A key performance measure is productivity

1. A measure of the effective use of resources, usually expressed as the ratio of output to input
2. Productivity = Units Produced / Input Used (Inputs can be labor hours, pounds of raw material, KWH of energy, etc.)

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1. Note, that in all of these problems for the whole semester, you need to keep the units on your numbers when you do the calculations and when you report the answers.

1. A producer of wooden crates has a way to increase productivity by increasing the quality of the wood he purchases by using a professional buyer, allowing more crates per unit of wood but increasing labor costs.  Look first at labor rate:

1. Looking at the multifactor productivity: