1 SMALL BUSINESS MANAGEMENT Chapter 11 Operations Management.
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Transcript of 1 SMALL BUSINESS MANAGEMENT Chapter 11 Operations Management.
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SMALL BUSINESS MANAGEMENT
Chapter 11 Chapter 11
Operations ManagementOperations Management
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Management of Internal Operations
Part of Physical Facilities PlanPart of Physical Facilities Plan Maintaining Quality and ControlMaintaining Quality and Control AreasAreas
– cash flow, production costs, product quality, cash flow, production costs, product quality, inventory management, physical facilities inventory management, physical facilities issues.issues.
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The Production Process
Converts Inputs Converts Inputs – money, people, machines, inventoriesmoney, people, machines, inventories
Into OutputsInto Outputs– products and/or servicesproducts and/or services
PERT = Priority Evaluation Review and PERT = Priority Evaluation Review and TechniqueTechnique
Total Quality ManagementTotal Quality Management
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Physical Facilities
Buildings - Buildings - age, space, configuration, appearance, frontage, age, space, configuration, appearance, frontage, accessaccess
Interior utilization - Interior utilization - floor space, room dimensions, floor space, room dimensions, ceiling heights, stairways, elevators, window space, utility ceiling heights, stairways, elevators, window space, utility servicesservices
Improvement potential - Improvement potential - building exterior and building exterior and interior,site, surrounding, streets, walks, access, expansioninterior,site, surrounding, streets, walks, access, expansion
Site and Environment - Site and Environment - street and service areas setback street and service areas setback and frontage, parking, surrounding businesses, area and frontage, parking, surrounding businesses, area environmentenvironment
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Layout
Layouts for Manufacturing Firms Layouts for Manufacturing Firms – product layout, process layout, fixed position layoutproduct layout, process layout, fixed position layout
Layouts for Retail FirmsLayouts for Retail Firms– selling vs. nonselling space, space among departments selling vs. nonselling space, space among departments
and/or products, classification of merchandise, display and/or products, classification of merchandise, display locations and product shelvinglocations and product shelving grid layout, free-flowing layoutgrid layout, free-flowing layout
Layouts for Service FirmsLayouts for Service Firms
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Purchasing and Controlling Inventories
Sources of SupplySources of Supply Evaluating SuppliersEvaluating Suppliers
– dependability, cost, services offereddependability, cost, services offered
Determining Order QuantitiesDetermining Order Quantities– order lead time, sales or production estimate, minimum order lead time, sales or production estimate, minimum
inventory levels needed, inventory currently on hand, inventory levels needed, inventory currently on hand, methods for determining order quantities, methods for determining order quantities, administration of the buying process (minimum administration of the buying process (minimum turnover method, maxmin, opentobuy, eoq, abc turnover method, maxmin, opentobuy, eoq, abc analysisanalysis))
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Purchasing and Controlling Inventories
Inventory ControlInventory Control– unit of control, unit of control, – valuation, valuation, – monitoring, monitoring,
periodic vs. perpetualperiodic vs. perpetual
– security of inventory security of inventory
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The Small Business-Supplier Relationship
EXAMPLE OF POLICYEXAMPLE OF POLICY 1. Define clear, identifiable, and measurable objectives for 1. Define clear, identifiable, and measurable objectives for
your supplier management strategy.your supplier management strategy. 2. Be prepared to work with the supplier to identify and 2. Be prepared to work with the supplier to identify and
define the roles that each will perform.define the roles that each will perform. 3. Attempt to employ technology to share data relating to 3. Attempt to employ technology to share data relating to
forecasting, product movement, and financial evaluation.forecasting, product movement, and financial evaluation. 4. Evaluate suppliers regularly with an objective 4. Evaluate suppliers regularly with an objective
standardized framework that is both quantitative and standardized framework that is both quantitative and qualitative.qualitative.
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Concept Checks
1. What is the production process?1. What is the production process?
2. Why is it important to continually 2. Why is it important to continually
monitor the state of the physical facilities?monitor the state of the physical facilities?
3. What are the three types of layouts used 3. What are the three types of layouts used
in the production process?in the production process?
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Concept Checks 4. In planning the layout of a retail store, 4. In planning the layout of a retail store,
what key areas should be analyzed?what key areas should be analyzed? 5. What are the two types of layouts used 5. What are the two types of layouts used
by a retail store?by a retail store? 6. What are the pros and cons of 6. What are the pros and cons of
purchasing from one supplier?purchasing from one supplier?
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Concept Checks
7. What items of information are required to 7. What items of information are required to estimate the quantities of inventories to estimate the quantities of inventories to order?order?
8. What specific methods can be used to 8. What specific methods can be used to determine order quantities?determine order quantities?
9. What are the three essential aspects of 9. What are the three essential aspects of inventory control?inventory control?