Buma 20013

Polytechnic University of the Philippines
BUMA 20013
Assignment No.1
1. Briefly describe the terms operations management and supply chain.

Answer:
Operations management refers to the strategic planning and control of processes
within an organization to ensure efficient production of goods and services. It
involves overseeing various activities such as production planning, resource
allocation, quality control, and process improvement to optimize productivity,
minimize costs, and enhance customer satisfaction.
Supply chain refers to the network of organizations, activities, resources, and

technologies involved in the creation and delivery of products or services. It
encompasses all stages from sourcing raw materials to manufacturing,
distribution, and ultimately reaching the end consumer.
2. Identify business organizations three major functional areas and briefly describe
they interrelate.
Answer:
Operations, Marketing, and Finance.
I. Operations: The operations function is responsible for managing the
production or delivery of goods and services. It involves activities such as
production planning, inventory management, quality control, and process
improvement. Operations interact with marketing by providing input on product
design, features, and pricing based on production capabilities.
II. Marketing: The marketing function focuses on understanding customer needs,
identifying target markets, promoting products or services, and managing
customer relationships. Marketing gathers information about customer
preferences and communicates it to operations for product development.
III. Finance: The finance function manages the financial resources of the
organization. It involves activities such as financial planning, budgeting,
investment analysis, and risk management.
These functional areas interrelate by sharing information, aligning goals, and

making decisions that support the overall objectives of the organization. They
work together to ensure that products or services are developed, produced
efficiently, marketed effectively, and financially viable.
3. Describe each system: craft, mass, and lean production.

Answer:
Craft Production - Craft production is a system where products are individually
created by highly skilled artisans or craftsmen. It is typically characterized by a
high degree of customization, attention to detail, and manual work. Craft
production is often associated with traditional or niche industries where the focus
is on producing unique, high-quality products tailored to specific customer

requirements.
Mass Production - Mass production is a system that involves the large-scale
production of standardized products using assembly lines and specialized
machinery. It aims to achieve high production volumes, efficiency, and cost-
effectiveness. Mass production relies on division of labor, standardized
processes, and automation to streamline production and maximize output.
Lean Production - Lean production, also known as lean manufacturing, is a
system that emphasizes minimizing waste and maximizing value in the
production process. It focuses on continuous improvement, efficiency, and
eliminating activities that do not add value to the final product
4. List and briefly explain the four basic sources of variation, and explain why it is
important for managers to be able to deal with variation effectively.
Answer:
The four basic sources of variation in a business context are:
I. Man - Variation caused by differences in skills, abilities, and behavior
among individuals. People's capabilities, work styles, and decision-making
can introduce variability in processes and outcomes.
II. II. Machine - Variation arising from differences in equipment, machinery,
or technology used in production. Machines can have varying
performance levels, reliability, and maintenance requirements, which can
affect the quality and efficiency of production.
III. III. Material - Variation resulting from differences in the quality, availability,
or consistency of raw materials, components, or supplies used in the
production process. Variability in material characteristics can impact
product quality, production speed, and overall performance.
IV. IV. Method - Variation caused by differences in processes, procedures, or
work methods utilized in production. Inconsistent or inefficient methods
can lead to variations in output, quality, and productivity.
It is important for managers to effectively deal with variation because of first in
Quality Control, variation can impact product or service quality. Second Cost
Management this variation can lead to increased costs due to rework, waste, or
inefficiencies. Third Process Improvement understanding variation helps
managers identify areas for process improvement. Last is the Decision Making
variation can introduce uncertainty in decision-making processes. Overall,
dealing with variation enables managers to enhance operational performance,
maintain consistent quality, control costs, and make well-informed decisions,
ultimately contributing to the success and competitiveness of the organization.
5. List five important differences between goods production and service operations
and five important similarities.
Answer:
Five important differences between goods production and service operations are
I. Tangibility Goods production involves the creation of physical, tangible

products that can be stored, transported, and inspected. In contrast, services are
intangible and often involve the delivery of experiences or performances that
cannot be physically held or stored.
II. Production and Consumption Goods are typically produced before they are
consumed and can be stored as inventory. In service operations, production and
consumption often happen simultaneously, with services being consumed as
they are produced.
III. Customization Goods production often involves standardized, mass-
produced items with limited customization options. Services, on the other hand,
can be highly customized and tailored to individual customer needs and
preferences.
V. Quality Assessment Quality assessment in goods production is often based
on tangible and measurable characteristics such as durability, reliability, or
physical appearance. In service operations, quality assessment is often
subjective and relies heavily on customer perception and satisfaction.
VI. Inventory Management Goods production requires managing inventory
levels to meet demand and ensure timely delivery. In service operations,
inventory management is typically not applicable since services are produced
and consumed in real-time.
Five important similarities between goods production and service operations are:
I. Operations Management Principles Both goods production and service

operations involve applying operations management principles to optimize
processes, improve efficiency, and enhance customer satisfaction.
II. Customer Focus Both goods production and service operations aim to meet
customer needs and deliver value. Customer satisfaction and loyalty are critical
for success in both contexts.
III. Resource Allocation Both goods production and service operations require
effective resource allocation, including managing labor, equipment, materials,
and financial resources, to achieve optimal results.
IV. Quality Assurance Both goods production and service operations require
quality assurance measures to ensure that products or services meet or exceed
customer expectations.
V. Supply Chain Management While the specifics may differ, both goods
production and service operations involve elements of supply chain
management, including sourcing materials or inputs, managing suppliers, and
coordinating logistics to deliver products or services to customers.

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Polytechnic University of the Philippines

1. Briefly describe the terms operations management and supply chain.

Supply chain refers to the network of organizations, activities, resources, and

These functional areas interrelate by sharing information, aligning goals, and

3. Describe each system: craft, mass, and lean production.

is on producing unique, high-quality products tailored to specific customer

I. Tangibility Goods production involves the creation of physical, tangible

I. Operations Management Principles Both goods production and service

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