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Operations activity is the fundamental that all business organizations do. Business operations are processes that
either provide services or create goods. Operations take place in businesses such as restaurants, gasoline
stations, retail stores, supermarkets, factories, hospitals, and even in colleges and universities. In fact, they take
place in every business organization. Moreover, operations are the core of what a business organization does.
Technically we can define operations as the part of a business organization that is responsible for producing
goods or services.

Operations activity is the fundamental that all business organizations do. Business operations are processes that
either provide services or create goods. Operations take place in businesses such as restaurants, gasoline
stations, retail stores, supermarkets, factories, hospitals, and even in colleges and universities. In fact, they take
place in every business organization. Moreover, operations are the core of what a business organization does.
Technically we can define operations as the part of a business organization that is responsible for producing
goods or services.

Why Study Operations Management?

Every aspect of business affects or is affected by operations
Many service jobs are closely related to operations such as  financial services, marketing services,  accounting
services and Information services
Through learning about operations and supply chains you will have a better understanding of:

 The world you live in

 The global dependencies of companies and nations
 Reasons that companies succeed or fail
 The importance of working with others

In managing the business organization there are three basic functions that should be present to be functional
these are the finance, https://tip.instructure.com/courses/22580/files/7458885/previewoperations and marketing.
Operations cannot stand on its own, it requires other external organizations before reaching the customers.
Operations and supply chains are intrinsically linked, and no business organization could exist without both.
A supply chain is the sequence of organizations—their facilities, functions, and activities—that are involved in
producing and delivering a product or service. The sequence begins with basic suppliers of raw materials and
extends all the way to the final customer.
Business provides goods and services to the customers. The creation of goods or services involves transforming
or converting inputs into outputs. Various inputs such as capital, labor, and information are used to create goods
or services using one or more transformation processes (e.g., storing, transporting, repairing). To ensure that the
desired outputs are obtained, an organization takes measurements at various points in the transformation process
(feedback) and then compares them with previously established standards to determine whether corrective
action is needed (control). The figure below depicts the conversion system:
The essence of the operations function is to add value during the transformation process: Value-added is the
term used to describe the difference between the cost of inputs and the value or price of outputs.
1.2 PRODUCTION OF GOODS AND SERVICES

Although goods and services often go hand in hand, there are some very basic differences  between the two,
differences that impact the management of the goods portion versus management of the service portion. There
are also many similarities between the two. Production of goods results in a tangible output, such as an
automobile, eyeglasses, a golf ball, a refrigerator—anything that we can see or touch. It may take place in a
factory, but it can occur elsewhere. For example, farming and restaurants produce non-manufactured goods.
Delivery of service, on the other hand, generally implies an act. But how do we define Goods and
Services?  Goods are physical items that include raw materials, parts, subassemblies, and final products such as 
Automobile, Computer, Oven and Shampoo. .Services are activities that provide some combination of time,
location, form or psychological value. such as Air travel, Education, Haircut, Legal counsel.
There are also many similarities between managing the production of products and managing services. In fact,
most of the topics in this book pertain to both. When there are important service considerations, these are
highlighted in separate sections. Here are some of the primary factors for both:

 a. Forecasting and capacity planning to match supply and demand.

 Process management
  Managing variations
 Monitoring and controlling costs and productivity
  Supply chain management
 Location planning, inventory management, quality control, and scheduling
Note that many service activities are essential in goods-producing companies. These include training,
human resource management, customer service, equipment repair, procurement, and administrative
services.

1.3 SCOPE AND DECISION MAKING IN OPERATIONS MANAGEMENT

The scope of operations management ranges across the organization. Operations management people are
involved in product and service design, process selection, selection and management of technology, design of
work systems, location planning, facilities planning, and quality improvement of the organization’s products or
services.
A key aspect of operations management  decision is process management. A process consists of one or more
actions that transform inputs into outputs. In essence, the central role of all management
is process management. Businesses are composed of many interrelated processes. Generally speaking, there are
three categories of business processes:
1. Upper-management processes. These govern the operation of the entire organization. Examples include
organizational governance and organizational strategy.
2. Operational processes. These are the core processes that make up the value stream. Examples include
purchasing, production and/or service, marketing, and sales.
3. Supporting processes. These support the core processes. Examples include accounting, human resources, and
IT (information technology).
The operations function includes many interrelated activities, such as forecasting, capacity planning,
scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate
facilities, and more.
Decision making in organization usually overlapping in the three basic  functions, a. operations, finance
and marketing and sales.
However there are other functional units that are part of the decisions such as  purchasing, industrial
engineering, maintenance, accounting, personnel, public relations, and distribution. 
The chief role of an operations manager is that of planner and decision maker. In this capacity, the operations
manager exerts considerable influence over the degree to which the goals and objectives of the organization are
realized. Most decisions involve  many possible alternatives that can have quite different impacts on costs or
profits.
The following are the decision making tools:

1. Models
2. Quantitative Approaches
3. Performance Matrix
4. Analysis of Trade-Offs
5. A System Approach
6. Establishing Priorities – Pareto Phenomenon
7. Ethics/Environmental concerns

Usually  organizations use models to attain the most correct decisions. A model is an abstraction of reality, a
simplified representation of something. For example, a child’s toy car is a model of a real automobile.
Models are sometimes classified as physical, schematic, or mathematical.
Physical models look like their real-life counterparts.  
Schematic models are more abstract than their physical counterparts; that is, they have less resemblance
to the physical reality.
Mathematical models are the most abstract:  Examples include numbers, formulas, and symbols:

1.4 Historical Evolution and Trends in Operations Management

The Historical Evolution of OM is divided in five(5) Era namely:

1. Industrial Revolution
2. Scientific Management
3. Human Relations Movement
4. Decision Models and Management Science
5. Influence of Japanese Manufacturers

The following are the major recent trends that occurs in managing the operations of business:

 The internet, e-commerce and e-business

 Management of technology
 Globalization
 Management of supply chain
 Outsourcing is the process obtaining a product or service from outside the organization
 Agility is the ability of an organization to respond quickly to demands or opportunities
 Ethical Behaviour