Uploaded by Jae-Cy Kim

Chapter 1.7-8

Operating Management focuses on the production and operations within the
organization. It is concerned with the inputs and outputs, converting efficiently the raw
materials into tangible or intangible products. And by having satisfying product helps to
maximize the profit.
What: What resources will be needed and in what amounts?
Upon the production, capital and natural resources are needed to come
up with a better product. And prior to the creation of goods, the
materials should be identified and prepared. After deciding on what
materials to be considered and bought, the quantity should be also
When: When will each resource be needed? When should the work be scheduled?
When should materials and other supplies be ordered? When is corrective action
The estimated timeframe when the materials will be needed, when the
production will start and when the products will be finished.
Where: Where will the work be done?
This tackles about the site or setting where the production will be done.
How: How will the product or service be designed? How will the work be done
(organization, methods, equipment)? How will resources be allocated?
This includes packaging, the process and resource allocation.
Who: Who will do the work?
The production cannot be done without the people or workers.
Models are the representation of something to make it simple and easy to
understand. There are three classification of models namely physical, schematic
and mathematical.
Physical: real-life replication. One of the great examples is miniature of
houses, transportation, human dolls (Mannequins), or ideas converted into a
real product.
Schematic: the symbolic or graphic representation.
Mathematical: using mathematical structures such as equation or
formulas, numbers and concepts.
Linear programming considers various inequalities relating to real life situations
and obtaining the best value that can be chosen under conditions.
Inventory model is a mathematical model that helps to distinguish the optimum
level of inventories that a business has to maintain such as deciding on the
quantity of goods or raw materials to be stored.
Project models such as PERT (program evaluation and review technique) and
CPM (critical path method) tackle about initiating, planning, executing and
controlling activities or large- scale projects to achieve the goals within the
specific period of time.
Forecasting technique uses past or present data to determine or predict the
future. It should be updated based on the changing information. However, this
kind of technique is too risky and uncertain.
Statistical models monitor the progress and measure the future risks that an
organization or business might encounter.
Is a measurement which is used to monitor the progress of an organization. It measures
its behavior, activities and performance that indicate the overall quality or progress of a
business. This includes profits, costs, quality, productivity, flexibility, assets, inventories,
schedules, and forecast accuracy.
Tackles about the situational decisions that includes losing or gaining a quantity,
quality or an important matter upon choosing from the alternatives. There are times
that a business has several options and some alternatives to choose from. Having a wise
analyzation will elicit a good or an optimal option that stands out among others. The
option to be chosen should be the best one. In order to gain something, you have to let
go some things.
Involves innovation in goods and services to entice market and enhance
customer satisfaction and increase customer demand.
An old practice where a complex concept or work is breaking down into a simple
concept to understand it fully and make things work easier. And each interrelated part
works together to perform excellently and produce better and organized outcomes.
Pareto phenomenon, a practice where a situation is being examined to
determine the factors that should be prioritized for its function or impact.