{"id":3142,"date":"2023-02-19T16:11:45","date_gmt":"2023-02-19T16:11:45","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/operations-management\/"},"modified":"2025-05-27T20:30:31","modified_gmt":"2025-05-27T20:30:31","slug":"operations-management","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/operations-management\/","title":{"raw":"Learn It 13.1.1: What Is Operations Management?","rendered":"Learn It 13.1.1: What Is Operations Management?"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what operations management is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what operations management is<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand how operations management functions in the service industry&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand how operations management functions in the service industry<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2>Operations Management<\/h2>\r\n\r\n[caption id=\"attachment_7682\" align=\"aligncenter\" width=\"561\"]<img class=\"wp-image-7682 \" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1.png\" alt=\"Production Process for Products and Services. The diagram shows that inputs, which are factors of production, include the following: natural resources, human resources, raw materials, and capital. A conversion process takes place by which inputs are converted into outputs which are products and services.\" width=\"561\" height=\"557\" \/> Figure 1. Production Process for Products and Services[\/caption]\r\n\r\n<p><strong>Production<\/strong>, the creation of products and services, is an essential function in every firm. Production turns inputs, such as natural resources, raw materials, human resources, and capital, into outputs, which are products and services. This process is shown below. Managing this conversion process is the role of <strong>operations management<\/strong>.<\/p>\r\n<p><strong>Operations managers<\/strong>, the people charged with managing and supervising the conversion process, play an important role in businesses. They control about three-fourths of a firm\u2019s assets, including inventories, wages, and benefits. They also work closely with other major divisions of the firm, such as marketing, finance, accounting, and human resources, to ensure that the firm produces its goods or services profitably and satisfies its customers. Marketing personnel help them decide which products to make or which services to offer. Accounting and human resources help them face the challenge of combining people and resources to produce high-quality goods on time and at reasonable cost. They are involved in the development and design of goods and determine what production processes will be most effective.<\/p>\r\n<p>Production and operations management involve three main types of decisions, typically made at three different stages:<\/p>\r\n<ol>\r\n\t<li><strong>Production planning<\/strong>.\u00a0The first decisions facing operations managers come at the\u00a0planning stage<em data-effect=\"italics\">.<\/em>\u00a0At this stage, managers decide where, when, and how production will occur. They determine site locations and obtain the necessary resources.<\/li>\r\n\t<li><strong>Production control<\/strong>.\u00a0At this stage, the decision-making process focuses on controlling quality and costs, scheduling, and the actual day-to-day operations of running a factory or service facility.<\/li>\r\n\t<li><strong>Improving production and operations<\/strong>. The final stage of operations management focuses on developing more efficient methods of producing the firm\u2019s goods or services.<\/li>\r\n<\/ol>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"375\"]4322[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what operations management is&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what operations management is<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand how operations management functions in the service industry&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand how operations management functions in the service industry<\/span><\/li>\n<\/ul>\n<\/section>\n<h2>Operations Management<\/h2>\n<figure id=\"attachment_7682\" aria-describedby=\"caption-attachment-7682\" style=\"width: 561px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7682\" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1.png\" alt=\"Production Process for Products and Services. The diagram shows that inputs, which are factors of production, include the following: natural resources, human resources, raw materials, and capital. A conversion process takes place by which inputs are converted into outputs which are products and services.\" width=\"561\" height=\"557\" srcset=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1.png 838w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-300x298.png 300w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-150x150.png 150w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-768x763.png 768w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-65x65.png 65w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-225x224.png 225w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/19203451\/L13.1.1-350x348.png 350w\" sizes=\"(max-width: 561px) 100vw, 561px\" \/><figcaption id=\"caption-attachment-7682\" class=\"wp-caption-text\">Figure 1. Production Process for Products and Services<\/figcaption><\/figure>\n<p><strong>Production<\/strong>, the creation of products and services, is an essential function in every firm. Production turns inputs, such as natural resources, raw materials, human resources, and capital, into outputs, which are products and services. This process is shown below. Managing this conversion process is the role of <strong>operations management<\/strong>.<\/p>\n<p><strong>Operations managers<\/strong>, the people charged with managing and supervising the conversion process, play an important role in businesses. They control about three-fourths of a firm\u2019s assets, including inventories, wages, and benefits. They also work closely with other major divisions of the firm, such as marketing, finance, accounting, and human resources, to ensure that the firm produces its goods or services profitably and satisfies its customers. Marketing personnel help them decide which products to make or which services to offer. Accounting and human resources help them face the challenge of combining people and resources to produce high-quality goods on time and at reasonable cost. They are involved in the development and design of goods and determine what production processes will be most effective.<\/p>\n<p>Production and operations management involve three main types of decisions, typically made at three different stages:<\/p>\n<ol>\n<li><strong>Production planning<\/strong>.\u00a0The first decisions facing operations managers come at the\u00a0planning stage<em data-effect=\"italics\">.<\/em>\u00a0At this stage, managers decide where, when, and how production will occur. They determine site locations and obtain the necessary resources.<\/li>\n<li><strong>Production control<\/strong>.\u00a0At this stage, the decision-making process focuses on controlling quality and costs, scheduling, and the actual day-to-day operations of running a factory or service facility.<\/li>\n<li><strong>Improving production and operations<\/strong>. The final stage of operations management focuses on developing more efficient methods of producing the firm\u2019s goods or services.<\/li>\n<\/ol>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm4322\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=4322&theme=lumen&iframe_resize_id=ohm4322&source=tnh&show_question_numbers\" width=\"100%\" height=\"375\"><\/iframe><\/section>\n","protected":false},"author":21,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Production and Operations Management - An Overview\",\"author\":\"\",\"organization\":\"OpenStax\",\"url\":\"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.5\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.5\"},{\"type\":\"original\",\"description\":\"Practice Questions\",\"author\":\"Robert Danielson\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Production Process for Products and Services \",\"author\":\"\",\"organization\":\"Rice University, OpenStax\",\"url\":\"https:\/\/openstax.org\/books\/introduction-business\/pages\/10-1-production-and-operations-management-an-overview\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":3138,"module-header":"learn_it","content_attributions":[{"type":"cc","description":"Production and Operations Management - An Overview","author":"","organization":"OpenStax","url":"http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.5","project":"","license":"cc-by","license_terms":"Download for free at http:\/\/cnx.org\/contents\/4e09771f-a8aa-40ce-9063-aa58cc24e77f@8.5"},{"type":"original","description":"Practice Questions","author":"Robert Danielson","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc","description":"Production Process for Products and Services ","author":"","organization":"Rice University, OpenStax","url":"https:\/\/openstax.org\/books\/introduction-business\/pages\/10-1-production-and-operations-management-an-overview","project":"","license":"cc-by-sa","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3142"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":13,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3142\/revisions"}],"predecessor-version":[{"id":9660,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3142\/revisions\/9660"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/3138"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3142\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=3142"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=3142"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=3142"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=3142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}