Principles of Business, Marketing, and
Finance
Production, Distribution, and Other Business
Operations
Copyright © Texas Education Agency, 2011. All rights reserved
“Copyright and Terms of Service
Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as
the property of the Texas Education Agency and may not be reproduced without the express written permission of the
Texas Education Agency, except under the following conditions:
1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the
Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the
Texas Education Agency;
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personal use only without obtaining written permission of the Texas Education Agency;
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way;
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reasonable charge to cover only the cost of reproduction and distribution may be charged.
Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any
entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written
approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the
payment of a licensing fee or a royalty fee.
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2
Production Activities
• Product Research
Applied Research
-studies existing products to develop
design improvements or new product
uses
Pure Research
-research done without a specific
product in mind with the goal of
discovering new solutions to problems
Product Design
-new product idea is developed into a
product to sell profitably
Copyright © Texas Education Agency, 2011. All rights reserved
3
Production Planning Process
• Production Resources
-machines, tools, other
equipment
• Personnel
-employees with necessary
skills
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4
Inventory Management
• Detailed account of a
company’s materials,
supplies, and finished
products
• Maintains the supply of
all resources needed
for production and the
products produced
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Manufacturing Procedures
• Organizing the work area
by type of process or
assembly required
• Improving Manufacturing
– Need for faster production
– Need for increased quality
– Need for reduced costs
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Continuous Process Improvement
(CPI)
• Increases the quality of
work by reducing errors,
inefficiencies, and waste
• Achieves goals by
improving the quality of
work
• Benchmarks-best practices
among all competitors
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Importance of Business Operation
• Determines the
Success or
Failure of a
Business
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8
Types of Business Operations
Facilities Management
Just-in-Time
Scheduling
Logistics
Safety &
Security
Information
Management
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9
Tools for Business Operations
• Operational Plan
– How work will be done
– Who will do the work
– What resources will be
needed
• Schedule-time plan for
completing activities
• Standard-specific
measurement against which
an activity or result is judged
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10
Using Technology to Manage
Operations
• More accurate decision making and planning
• Easier to access and exchange information
• Supply chain management
-technology allows companies to share ordering,
production, shipping information, etc.
• Collaboration software
-real-time communications for team members located in
different parts of the world
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11
Types of Businesses
• Producers
– Extractors
– Manufacturers
• Intermediaries-sell goods and
services of producers to
consumers and other businesses
• Service Business-carries out
activities that are consumed by its
customers
• Contingent Worker-no contract
for long-term employment
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12
Product Planning
• Product-everything a business offers to satisfy a
customer’s needs
– Basic product
– Product features-additions and improvements to the basic
product
– Options-customers are offered choices of features
– Brand name-unique identification
– Packaging-provides protection and security for the product
– Guarantee or warranty-builds customer confidence
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13
Product Planning Procedures
•
•
•
•
Idea Development
Idea Screening
Strategy Development
Production and Financial
Planning
• Limited Production and Test
Marketing
• Full-scale Production
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