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1-* Quantitative Approaches Linear programming Queuing techniques Inventory models Project models Statistical models 1-* Analysis of Trade-Offs Decision on the amount of inventory to stock Increased cost of holding inventory vs. Level of customer service 1-* Systems Approach “The whole is greater than the sum of the parts.” Suboptimization 1-* Pareto Phenomenon A few factors account for a high percentage of the occurrence of some event(s). 80–20 Rule: 80% of problems are caused by 20% of the activities. How do we identify the vital few? 1-* Ethical Issues Financial statements Worker safety Product safety Quality Environment Community Hiring/firing workers Closing facilities Worker’s rights 1-* Business Operations Overlap Operations Finance Figure 1.5 Marketing 1-* Operations Interfaces Operations Personnel/ Human resources MIS Legal Public Relations Accounting Figure 1.6 1-* Historical Summary of Operations Management Industrial revolution (1770s) Scientific management (1911) Mass production Interchangeable parts Division of labor Human relations movement (1920–60) Decision models (1915, 1960–’70s) Influence of Japanese manufacturers 1-* Trends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Outsourcing Agility Ethical behavior 1-* Management Technology Technology: The application of scientific discoveries to the development and improvement of goods and services Product and service technology Process technology Information technology 1-* Suppliers’ Suppliers DirectSuppliers Producer Distributor Final Consumer Simple Product Supply Chain Figure 1.7 Supply Chain: A sequence of activities And organizations involved in producing And delivering a good or service 1-* Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $0.25 Wheat transported to mill $0.08 $0.33 Mill produces flour $0.15 $0.48 Flour transported to baker $0.08 $0.56 Baker produces br
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