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AIMS 3770: Production Operations Analysis Dr. Linda Leon Summer 2015

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Presentation on theme: "AIMS 3770: Production Operations Analysis Dr. Linda Leon Summer 2015"— Presentation transcript:

1 AIMS 3770: Production Operations Analysis Dr. Linda Leon Summer 2015 http://myweb.lmu.edu/lleon/aims3770/

2 What Is Operations Management? Operations management is the set of activities that creates goods and services by transforming inputs into outputs Production is the creation of goods and services

3 Why Study OM? OM is one of three major functions (marketing, finance, and operations) of any organization You need to know how goods and services are produced OM is a costly part of an organization

4 Options for Increasing Contribution

5 Functions - Bank Operations Finance/ Accounting Marketing Facilities Layout Teller Scheduling Transactions Processing Security Commercial Bank © 1984-1994 T/Maker Co.

6 Functions - Airline Operations Finance/ Accounting Marketing Ground Support Flight Operations Aircraft Maintenance Catering Airline © 1984-1994 T/Maker Co.

7 Functions - Manufacturer Operations Finance/ Accounting Marketing Production Control Facilities Quality Control Supply Chain Management Manufacturing

8 Efficiency = Value added to good or service Productivity = Output/Input where inputs are Labor + material + energy + capital + time + information

9 Productivity increases when output increases more than input or when input decreases more than output. Increases in productivity measure process improvement and are correlated with improved standard of living Since 1869, U.S. productivity increased at an average rate of 2.5% per year. In 21 st century, U.S. productivity has been slightly lower than 2.5 % per year on average Productivity Increases

10 Variables that Create Productivity Increases Labor (10%) Capital (38%) Management (52%)

11 Operations Course Objectives To understand the common principles of production and operations management To apply strategies dealing with various problems encountered in the production of goods and services To be aware of current issues and trends encountered in the production of goods and services

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13 New Challenges in OM Local or national focus Batch shipments Low bid purchasing Lengthy product development Standard products Short-term low costs Global focus Just-in-time Supply chain partnering Rapid product development, alliances Mass customization Sustainability FromTo From To

14 CBA Core Outcomes To utilize quantitative techniques to model and evaluate business decisions To effectively utilize information technology and productivity software to analyze a business problem, recommend possible solutions, and communicate results to the appropriate audience To demonstrate critical thinking skills by defining, modeling, analyzing and evaluating complex business problems


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