2. • Is an area of management concern with designing and controlling the
process of production and redesigning business operation in the
production and redesigning business operation in the production of goods
and services.
• The collection of people, technology, and system within the company that
has a primary responsibility for providing the organization’s goods and
services.
OPERATION MANAGEMENT
3. • First opened in 1971. Now it has 121 restaurants in
over 40 countries.
• Creates value in the form of food and entertainment
• 3,500+ custom meals per day in Orlando
• Role of the Operations Manager
The Hard Rock Cafe
4. FStudy how people organize themselves for
productive enterprise
FStudy how goods and services are produced
FUnderstand what operations managers do
FUnderstand how operations management affects
costs for an organization
Why Study Operations Management?
6. All businesses perform three functions to create goods and
services:
• Finance and Accounting
• Marketing
• Operations and Production
Framework of Business
7.
8. GOODS
• Resold
• Inventoried
• Measurable Quality
• Sales Distinct from Production
• Product Transportable
• Location for Cost
• Easy to Automate
Goods vs Services
SERVICES
• Reselling Unusual
• Difficult to Inventory
• Quality Difficult to Measure
• Selling Part of Service
• Provider Transportable
• Location for Customer Contact
• Difficult to Automate
11. Productivity is the ratio of outputs of an enterprise divided by
its inputs
Outputs(Products or Services)
Inputs (labour, Material, Energy, Capital)
PRODUCTIVTY
13. Ø Why measure national Productivity?
Ø Only by increasing productivity does the standard of living improve
Ø Three variables:
Ä Labour
Ä Capital
Ä Management
Productivity Improvement
23. Ø Project management is the use of specific knowledge, skills,
tools and techniques to deliver something of value to people.
The development of software for an improved business process,
the construction of a building, the relief effort after a natural
disaster, the expansion of sales into a new geographic market—
these are all examples of projects.
Ø is the process of leading the work of a team to achieve all
project goals within the given constraints.
Project Management
25. 1. Compute the multifactor productivity measure for an eight-hour day in
which the usable output was 300 units, produced by three workers who used
600 pounds of materials. Workers have an hourly wage of ₱400, and material
cost is ₱20 per pound. Overhead is 1.5 times labor cost.
2. Rural Bank, a property title search firm is contemplating using online
software to increase its search productivity. Currently an average of 40 minutes
is needed to do a title search. The researcher cost is ₱2 per minute. Clients are
charged a fee of ₱400. Company A’s software would reduce the average search
time by 10 minutes, at a cost of ₱3.50 per search. Company B’s software would
reduce the average search time by 12 minutes at a cost of ₱3.60 per search.
Which option would have the highest productivity in terms of revenue per peso
of input?
Seatwork #1
26. 3. China Bank employs three loan officers, each working eight hours per day.
Each officer processes an average of five loans per day. The bank’s payroll cost
for the officers is 820 pesos per day, and there is a daily overhead expense of
₱500.
a. Compute the labor productivity.
b. Compute the multifactor productivity, using loans per peso cost as the
measure.
The bank is considering the purchase of new computer software for the loan
operation. The software will enable each loan officer to process eight loans per
day, although the overhead expense will increase to ₱550.
c. Compute the new labor productivity.
d. Compute the new multifactor productivity.
e. Should the bank proceed with the purchase of the new software? Explain.
Seatwork #1
