Introduction to Business
Chapter 7
Operations Management and Quality
LECTURE OUTLINE
I. What Does “Operations” Mean Today?
_______________________ provide tangible and intangible services; firms that make
tangible products are engaged in _________________________ (or goods production).
The term _______________ (or production) refers to all activities involved in making
products—goods and services—for customers.
II. Creating Value Through Operations
Both services and goods provide consumers with _______________, which is the
ability of a product to satisfy a human want. _______________ is created merely
through transforming raw materials into finished goods. _______________is created
when marketers make products available when consumers want them; _____________
is created when products are made available where they are convenient for consumers.
______________________________ (production management) is the systematic
direction and control of the processes that transform resources into finished services
and goods that create value for and provide benefit to customers. _______________
_______________ (or production managers) are responsible for ensuring that
operations processes create what customers need and want.
A. Differences Between Service and Goods Manufacturing Operations
Whereas goods are produced, services are performed. Four aspects of service
operations can make such operations more complicated than simple goods
production.
1. Interacting with Consumers. Manufacturing operations focus on physical
goods, whereas service operations are a combination of goods and services.
2. Services Can Be Intangible and Unstorable. _______________refers to the
untouchable value consumers receive in the form of pleasure, gratification, or
a feeling of safety; _______________refers to the idea that a service is often
wasted if it is not used.
3. Customer’s Presence in the Operations Process. Service operations often
acknowledge the customer as part of the service transaction itself.
4. Intangibles Count for Service Quality. Customers use different measures to
judge services and goods because services include intangibles, not just
physical objects.
B. Operations Processes
An ______________________________ is a set of methods and technologies
used in the production of goods and services.
1. Goods Production Processes: Make-to-Order Operation Versus Make-to-
Stock Operations. A ______________________________ makes one-of-a-
kind products, according to customer specifications. A _______________
_______________ produces standardized products in large quantities.
Revised: 9/24/2007
