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Editor: Dr John Burnett (Daniels College of Business, University of Denver, USA)

Editor: Michael J Pesch (St Cloud University, USA) Reviewer: Ronald F Farina (Daniels College of Business, University of Denver, USA)

Countless operations decisions that have both long-term and short-term impacts on the organization’s ability to produce goods and services that provide added value to customers must be made. If the organization has made mostly good operations decisions in designing and executing its transformation system to meet the needs of customers, its prospects for long-term survival are greatly enhanced. Major operations decisions areas include inventory, capacity, quality, scheduling, process type, technology, location, layout, and supply chain management. Each of these nine decision areas will be discussed in this section.

Inventory decisions

The key question that must be answered for inventory is “How much?” Understanding the best inventory levels to carry is critical to the organization because too much inventory and too little inventory are both costly to the organization. Inventory that exceeds what is needed to satisfy customer demand imposes unnecessary costs such as storage, deterioration, obsolescence, theft, and money tied up in inventory that cannot be used for other purposes. Too little inventory means the organization cannot meet 100 per cent of its customer demand and sales revenues are delayed or lost.

For example, a restaurant that specializes in serving fresh fish needs to make careful purchasing decisions so it has enough fresh fish each day to serve its customers, but not so much that unsold fish must be severely discounted or discarded at the end of the day. Computer companies such as Dell must carefully manage its computer chip inventory so it can meet current customer orders, but not be stuck with too much inventory if a new computer chip comes out or if vendors reduce prices.

Capacity decisions

The question managers must answer for the capacity decision area is the same as the question for inventory: “How much?” Determining the organization’s capacity to produce goods and services involves both long-term and short-term decisions. Long-term capacity decisions involve facilities and major equipment investments. In 2007, Airbus introduced its Super Jumbo Jet that carries up to 850 passengers and costs USD 3 billion. The Super Jumbo provides huge amounts of passenger carrying capacity, but before an airline purchases this jet, it needs to decide if it has enough passengers to generate the revenue to pay for the plane and earn profits for the airline. A large single airplane like the Super Jumbo may not be the right capacity decision for an airline that serves numerous medium sized cities. On the other hand, an airline that serves passengers traveling between New York City, USA and Shanghai, China might find the Super Jumbo to be a perfect choice for meeting demand because of the large populations in each city.

Questions & Answers

A golfer on a fairway is 70 m away from the green, which sits below the level of the fairway by 20 m. If the golfer hits the ball at an angle of 40° with an initial speed of 20 m/s, how close to the green does she come?
Aislinn Reply
cm
tijani
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John Reply
what is physics
Siyaka Reply
A mouse of mass 200 g falls 100 m down a vertical mine shaft and lands at the bottom with a speed of 8.0 m/s. During its fall, how much work is done on the mouse by air resistance
Jude Reply
Can you compute that for me. Ty
Jude
what is the dimension formula of energy?
David Reply
what is viscosity?
David
what is inorganic
emma Reply
what is chemistry
Youesf Reply
what is inorganic
emma
Chemistry is a branch of science that deals with the study of matter,it composition,it structure and the changes it undergoes
Adjei
please, I'm a physics student and I need help in physics
Adjanou
chemistry could also be understood like the sexual attraction/repulsion of the male and female elements. the reaction varies depending on the energy differences of each given gender. + masculine -female.
Pedro
A ball is thrown straight up.it passes a 2.0m high window 7.50 m off the ground on it path up and takes 1.30 s to go past the window.what was the ball initial velocity
Krampah Reply
2. A sled plus passenger with total mass 50 kg is pulled 20 m across the snow (0.20) at constant velocity by a force directed 25° above the horizontal. Calculate (a) the work of the applied force, (b) the work of friction, and (c) the total work.
Sahid Reply
you have been hired as an espert witness in a court case involving an automobile accident. the accident involved car A of mass 1500kg which crashed into stationary car B of mass 1100kg. the driver of car A applied his brakes 15 m before he skidded and crashed into car B. after the collision, car A s
Samuel Reply
can someone explain to me, an ignorant high school student, why the trend of the graph doesn't follow the fact that the higher frequency a sound wave is, the more power it is, hence, making me think the phons output would follow this general trend?
Joseph Reply
Nevermind i just realied that the graph is the phons output for a person with normal hearing and not just the phons output of the sound waves power, I should read the entire thing next time
Joseph
Follow up question, does anyone know where I can find a graph that accuretly depicts the actual relative "power" output of sound over its frequency instead of just humans hearing
Joseph
"Generation of electrical energy from sound energy | IEEE Conference Publication | IEEE Xplore" ***ieeexplore.ieee.org/document/7150687?reload=true
Ryan
what's motion
Maurice Reply
what are the types of wave
Maurice
answer
Magreth
progressive wave
Magreth
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Muhammad Reply
fine, how about you?
Mohammed
hi
Mujahid
A string is 3.00 m long with a mass of 5.00 g. The string is held taut with a tension of 500.00 N applied to the string. A pulse is sent down the string. How long does it take the pulse to travel the 3.00 m of the string?
yasuo Reply
Who can show me the full solution in this problem?
Reofrir Reply
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Source:  OpenStax, Business fundamentals. OpenStax CNX. Oct 08, 2010 Download for free at http://cnx.org/content/col11227/1.4
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