NSW HSC Business Studies

## What operations management does **Operations management** is the management of the processes that turn inputs into the goods and services a business sells. Every business has an operations function, whether it makes bicycles, cuts hair, runs a hospital or lends money. It is the part of the business that creates the product the customer pays for, so the quality, cost and speed of what a business sells are set largely by how well its operations are managed. The topic is studied through large businesses, which have separate departments, high volumes, complex supply arrangements and often operations in more than one country. A small business may have one person doing production, selling and bookkeeping; a large business has to coordinate hundreds of people and many sites, and that is why operations needs deliberate management. ### Goods and services A **good** is a tangible product that can be stored, such as a car, a loaf of bread or a mobile phone. A **service** is intangible and is usually produced and consumed at the same time, such as a haircut, a flight or financial advice. Most businesses sell a mixture: a restaurant sells food (a good) and table service (a service), and a car dealer sells vehicles and servicing. The difference changes how operations are managed: | Feature | Goods | Services | |---|---|---| | Stored in advance | Yes, as inventory | No, a seat on a flight cannot be kept for tomorrow | | Customer contact during production | Usually low | Usually high |…