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MGT613 - Production / Operations Management - Lecture Handout 18

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Process Selection plays an important part in over all design of production and operations management systems. Process Selection allows an organization to offer a safe and reliable product and service through pragmatic design and effective capacity planning. With the help of process selection we can understand the different types of processing including manual, rigid, and flexible as well as various automated approaches to processing. Process selection allows an operations
manager to better understand the need for management of technology. Together with capacity planning it helps an organization to develop different approaches to meet the irregular demand pattern of the customers.

Introduction and Meaning

Process Selection refers to the way an organization chooses to produce its good or services. It takes into account selection of technology, capacity planning, layout of facilities, and design of work systems. Process selection is a natural extension after selection of new products and services.

An organizations process strategy would include

  1. Make or Buy Decisions. The extent to which an organization will produce goods or provide in house as opposed to relying on an outside organization to produce or provide them.
  2. Capital Intensity. The mix of equipment and labor will be used by the government.
  3. Process Flexibility: The degree to which the system can be adjusted to changes in processing requirements due to such factors as changes in product or service design, changes in volume processed, and changes in technology.

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MGT613 - Production / Operations Management - Lecture Handout 07

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Forecasting demand is like forecasting weather .Sometimes the forecast or prediction fails completely and sometimes its near the predicted value but still not the exact value. Often scientists call forecasting as an educated guess, but even then forecasting helps us to plan our trips and journeys and most importantly we as farmers make use of forecasting to plant, harvest and take precautionary measures.

Forecasting in business forms the basis for budgeting and planning for capacity, sales, production, inventory, manpower, purchasing and more.

Forecasting allows the manager to anticipate the future so then can plan accordingly. Introduction

There are two major uses for forecasts. One is to help the Operations Manager plan the system and the other one is to help him plan the use of the system. These are important concepts different distinct but at the same time closely lined.
Planning the system refers to planning long term plans about the type of products or services to offer, what facilities and equipment to have, where to locate and so on and so forth. Planning the use of the system relates to short range and intermediate range planning which means planning inventory workforce resources, planning of purchasing and production activities, budgeting and scheduling etc.

Thus it can be said that planning the systems more of a job of a senior manager, birds eye view and has ORGANIZATIONAL STRATEGY in it where as planning the use of the system is an OPERATIONAL STRATEGY

Business Forecasting is more than just predicting demand. Forecasting is also used to predict profits, revenues, costs, productivity changes, prices and availability of energy and raw materials, interest rates, movements of key economic indicators (GNP, inflation and government loans) and prices of stocks and bonds.

Forecasting is not an exact science. Even with the availability of computers, and algorithms, its unable to make an exact prediction it requires Experience, Managerial Judgment and Technical expertise. General Responsibility lies with the Marketing workforce but to this day not a single marketing forecast has been created without the valuable contribution of the Operations side.

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