Aquila Haima P. Guro
MGT 104- Cc
CHAPTER 1: INTRODUCTION TO OPERATIONS MANAGEMENT
1. List five important differences between goods production and service operations.

Goods are tangible while services are intangible.

Goods are produced before they are consumed, while in case of services production and
consumption happen at the same time.

Goods can be stored in inventory while services cannot be stored for later use.

Quality assurance in goods is objective and is measurable, while the same for services is
very subjective.

Most manufactured goods can be patented while most services cannot be patented and
hence can be easily copied.
2. List five important similarities.

Manufacturers do not just offer products, and service organizations do not just offer
services. Both types of organizations normally provide a package of goods services.

Generally, service organization cannot inventory their outputs, but manufacturing firms
that make customized product also cannot inventory their output.

Everyone in an organization has some customers, whether in service or manufacturing.

Both of the organizations require hard labor.

Both have a very good return on investment.
3. Identify the three major functional areas of business organizations and briefly
describe how they interrelate.

Marketing and Sales- is responsible for assessing consumer wants and needs, and selling
and promoting the organization’s goods or services.

Operations- supply information about capacities and judge the manufacturability of
designs. Operations is responsible for producing the goods or providing the services
offered by the organization.

Finance- is responsible for securing financial resources at favorable prices and allocating
those resources throughout the organization, as well as budgeting, analyzing investment
proposals, and providing funds for operations.
Thus, marketing, operations, and finance must interface on product and process design,
forecasting, setting realistic schedules, quality and quantity decisions, and keeping each other
informed on the other’s strengths and weaknesses.
4. Define Operations Management.
Operations Management is the administration of business practices to create the
highest level of efficiency possible within an organization. Operations management is
concerned with converting materials and labor into goods and services as efficiently as
possible.