C H A P T E R 1

Operations Management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

Production the creation of goods and services.

Organizing to produce goods and services

1. Marketing
2. Production/ operations
3. Finance/ accounting

Why study OM?

1. To study how people organize themselves for productive enterprise.
2. To know how goods and services are produced. 
3. To understand what operations manager do.
4. It is such a costly part of an organization.

Difference between goods and services

Goods                                                                                    

• can be resold
• can be inventoried
• some aspects of quality are measurable
• transportable
• easy to automate

Services

• Reselling is unusual
• Many service cannot be inventoried
• Quality are difficult to measured
• Difficult to automate
• Selling is often a part of the service

Ex: Product

Ex: Service