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Introduction to Operations Management

Operations Management

William J. Stevenson

8th edition

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Introduction to Operations Management

CHAPTER

1

Introduction to 
 Operations Management

McGraw-Hill/Irwin

Operations Management, Eighth Edition, by William J. Stevenson Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

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Introduction to Operations Management

Operations Management
Figure 1.1

The management of systems or processes 
 that create goods and/or provide services

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Introduction to Operations Management

Value-Added
Figure 1.2

The difference between the cost of inputs 
 and the value or price of outputs.

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Introduction to Operations …show more content…

– Physical – Schematic – Mathematical

Tradeoffs

What are the pros and cons of models?

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Models Are Beneficial
Easy to use, less expensive • Require users to organize • Systematic approach to problem solving • Increase understanding of the problem • Enable “what if” questions • Specific objectives • Consistent tool • Power of mathematics • Standardized format


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Quantitative Approaches
• Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models

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Systems Approach
“The whole is greater than 
 the sum of the parts.”

Suboptimization

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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

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