1. Production management
WHY TO STUDY PRODUCTION & OPERATION MANAGEMENT?
Before knowing why to study Production and operation management we should know what is
Production & What is Production management?
PRODUCTION IS ANY PROCESS OR PROCEDURE DEVELOPED TO TRANSFORM A SET OF
INPUTS, LIKE MAN/WOMEN, MACHINE, MATERIAL, MONEY, MANAGEMENT MINUTES
AND METHODS (M1 TO M7); IN TO SPECIFIED SET OF OUTPUTS, LIKE FINISHED PRODUCTS
AND SERVICES IN PROPER QUALITY AT PROPER TIME. THUS ACHIEVING THE
ORGANISATIONAL OBJECTIVES
PRODUCTION = TOTAL OUTPUT÷TIME i.e. PRODUCTION PER DAY / HR.
P = f (M1, …………. M7)
PRODUCTION MANAGEMENT:
IT IS A BRANCH OF GENERAL MGMT, WHICH DEALS WITH DECISION MAKING RELATED TO
PRODUCTION PROCESSES SO THAT RESULTING GOODS & SERVICES ARE PRODUCED IN
ACCORDANCE WITH QUANTITATIVE SPECIFICATIONS & DEMAND SCHEDULE WITH MINIMUM
COST.
IT IS SCIENCE OF DECISION MAKING REGARDING PRODUCTION OF GOODS AND SERIVCES OF
MINIMUM COST THROUGH MGMT. PROCESS.

2. WHY TO STUDY PRODUCTION & OPERATION MANAGEMENT?
1. OUR AIM IS TO MAKE INDIA (LATEST BY 2020) AN INDUSTRIAL DEVELOPED NATION.
2. INDUSTRIES OCCUPY UNIQUE PLACE. THEY ARE TEMPLES OF MODERN INDIA BECAUSE
THEY LIFT ECONOMY. NEXT TO AGRICULTURE FACTORIES ARE LARGEST EMPLOYER.
3. INDUSTRY AFFECTS
(a) INCOME
(b) LIVING STANDARDS
(c) WANTS ETC.
4. MANAGERS HAVE TO UNDERSTAND
(a) PRODUCTION INCREASING TECHNIQUES
(b) BETTER MGMT TECHNIQUES
(i) TO MEET COMPETITION
(ii) FOR PLANT MODERNISATION
5. ADVANTAGES OF PRODUCTION & OPERATIONS MANAGEMENT
BETTER UNDERSTANDING WILL LEAD TO :
(a) SHORTER LEAD TIME FOR NEW PRODUCTS
(b) SHORTER LEAD TIME FOR MANUFACTURING
(c) IMPROVED TURN OVER
(d) HIGH QUALITY
(e) GREATER FLEXIBILITY
(f) BETTER CUSTOMER SERVICE
(g) REDUCED WASTAGE

3. 6. FIVE P’s OF PRODUCTION & OPERATION MANAGEMENT
(a) PRODUCTS – PERFORMANCE, AESTHETICS, QUALITY RELIABILITY, QTY, SELLING
PRICE OR PRODUCTION/ OPS COST DELIVERY DATES AND TIME.
(b) PLANT
(c) PROCESS – LAYOUT, SKILLS, SAFETY, MAINTENANCE
(d) PROGRAMMES – IT IS TIME TABLE SETTING DOWN DATES/ TIMES OF
TRANSFER OF PRODUCTS OR SERVICES TO CONSUMER BY MARKETING
INTERFACE CASH FLOW. PURCHASING, TRANSFERING.
(e) PEOPLE

4. INTER RELATIONSHIPS WITH OTHER FUNCTIONS
1. AN ORGANISATION AS A SYSTEM IDENTIFIES THE SUB SYSTEM OR SUB COMPONENT THAT
MAKES UP THE ORGANISATION. THESE SUBSYSTEMS ARE SHOWN IN FOLLOWING
DIAGRAMS.
2. (a) (b)
(a) FIGURE 2(a) SHOWS A BUSINESS FIRM HAVING FINANCE MARKETING, PURCHASING,
SYSTEMS INTEGRATED WITH PRODUCTION & OPERATION. ALL THESE SYSTEMS ARE
INTERDEPENDENT & INTERRELATED IN MANY WAYS AS SHOWN IN 2(b). HOWEVER
BOUNDRIES SEPERATING THESE SUB SYSTEMS ARE NOT CLEAR & DISTINCT.
3.
(a) INTERRELATION WITH OTHER SYSTEMS / SUB SYSTEMS IS SHOWN BELOW
(b)

5. (a) OPERATIONS RESEARCH – HELPS IN DECIDING INVENTORY POLICIES, SCHEDULING
(i) TRANSFORMATION, FORECASTING AND NETWORK ANALYSIS
(ii) PRODUCTION & SALES CO-ORDINATION – TO DECIDE NUMBER OF MACHINES
PER OPERATOR TO MINIMISE COST.

6. VARIOUS APPROACHES & THEIR ROLE IN PRODUCTION MANAGEMENT
INTRODUCTION:
1.
(a) PRODUCTION AND OPERATIONS MANAGER’S JOB IS TO MANAGE PROCESS OF
CONVERTING INPUTS TO DESIRED OUTPUT.
(b) IN THIS CONVERSION MANAGER USES FOLLOWING THREE APPROACHES
(i) CLASSICAL (TRANSFORMATION PROCESS) APPROACH :
IN THIS, ORGANISATION IS ASSUMED TO BE A CLOSED SYSTEM
AND TRANSFORMATION PROCESS ORIENTATION IS FOLLOWED, GUIDED
BY PRINCIPES AND FUNCTIONS OF MGMT.
(ii) MODELLING APPROACH :
THIS CAN BE SUB DIVIDED IN THREE MODELS –
(aa) DECISION MAKING – IN THIS DECISION MAKING IS
CONSIDERED TO BE CENTRAL PURPOSE. INFORMATION IS
ACQUIRED AND DECISION MODELS ARE DEVELOPED FOR
IMPROVING DECISION MAKING.
(ab) SYSTEM THEORY – IN THIS IT IS ASSUMED THAT
ORGANISATION IS AN OPEN SYSTEM MADE UP OF INTERRELATED SUB
COMPONENTS. IN THIS INTER RELATIONSHIP AMONG SUBSYSTEMS &
BETWEEN ORGANISATION & ENVIRONMENT IS IDENTIFIED AND VARIOUS
APPROACHES ARE DEVELOPED FOR PREDICTING AND EXPAINING THE
SYSTEM BEHAVIOUR.
(ac) MATHEMATICAL MODELING – IN THIS DECISION
PROBLEMS ARE QUANITFIED, SITUATIONS ARE OPTIMISED, EXPLICIT

7. RULES ARE DEVELOPED FOR DECISIONS AND METHODS FOR ANALYSING
SYSTEMS/ SUBSYSTEMS
2. TRANSFORMATION PROCESS APPROACH
3. GENERAL ANALYSIS OF TRANSFORMATION PROCESS :
(a)

9. 4. FAST FOOD OUTLETS AS PRODUCTIVE SYSTEM :
TRANSFORMATION OR CONVERSION PROCESS BY
OPS. MGMT. SYSTEM DESIGN
5. OPERATIONS SYSTEM OF A FARM :
OPERATIONS FUNCTIONS / SYSTEM OF AN ORG. IS THE PART THAT PRODUCES
THE ORGANIZATIONS PRODUCTS BY CONVERSION PROCESS.

10. 6. OPERATIONS SYSTEM DEPARTMENTAL STORES / RESTAURANT
7. EFFECTS OF SEPERATING PRODUCTIONS OPERATION & MARKETING

11. DIFFERENCE BETWEEN PRODUCTIONS OPERATION & MARKETING
S.NO. PRODUCTION MANAGEMENT OPERATIONS MANAGEMENT
1. MORE USED WITH SYSTEM WHERE WHERE INTANGIBLE SERVICES ARE
TANGIBLE GOODS ARE PRODUCED PRODUCED i.e. BANKS, AIRLINES,
EDUCATION INSTITUTIONS, LIBRARIES,
CONSULTANCIES
2. IT IS HISTORICAL GROWTH THIS OPS MGMT IS FOCUSSED IN RECENT
PRECEEDS OPERATION TIMES MUCH AFTER PRODUCTION
MGMT
MODELING APPROACH
1. DEFINITION :
MODELS ARE ARTIFICIAL REPRESENTATION OF THINGS THAT ARE REAL. HENCE
MODELS DO NOT FULLY DUPLICATE THEIR REAL WORLD COUNTER PART. HOWEVER
THIS INCOMPLETENESS OF MODELS SHOULD NOT BE INTERPRETED AS STRICTLY
NEGATIVE FEATURE.
2. ROLE OF MODELS :
MODELING PROCESS GIVES US SIMPLIFIED VERSION OF SITUATION, A
REPRESENTATION IN WHICH ALL THE MINOR CONSIDERATIONS HAVE BEEN STRIPPED
AWAY SO THAT MAJOR FACTS ARE CLEARLY VISIBLE.
3. ADVANTAGES OF MODELS :
(a) CAN CONCENTRATE ON HEART OF PROBLEM
(b) ELIMINIATION OF UNNECESSARY ELEMENTS

12. (c) EMERGENCE OF SIMPLIFIED VERSION OF SITUATION
(d) IT GIVES REPRESENTATION IN WHICH MINOR CONSIDERATIONS ARE STRIPPED
AWAY
(e) AWARENESS ABOUT VARIABLE THAT CAN BE CONTROLLED TO AFFECT THE
PERFORMANCE OF SYSTEM
(f) RELEVANT COST AND THEIR MAGNITUDE
(g) RELATIONSHIP OF COST TO VARIABLES INCLUDING IMPORTANT TRADE-OFFS
(SIDE ADVANTAGES) AMONG COSTS.
4. DISADVANTAGES OF MODEL :
(a) IT IS ARTIFICIAL REPRESENTATION OF REAL THINGS.
(b) PERCEPTION IS SUBJECTIVE, THAT IS, IT VARIES FROM PERSON TO PERSON
5. TYPES :
(a) VERBAL – THEY EXPRESS IN WORDS THE RELATIONSHIP AMONG VARIABLES.
EXAMPLE – REPLY TO MOTORIST ASKING
(b) THE DIRECTION OF A PETROL PUMP.
(c) WRITTEN MODELS
(i) SCHEMATIC MODELS : THEY SHOW PICTORIAL RELATIONSHIP AMONG
VARIABLES. IF I GIVE A MAP TO MOTORIST SHOWING PETROL PUMP, I
AM GIVING SCHEMATIC MODELS. CHARTS & DIAGRAMS ARE ALSO
SCHEMATIC, THEY ARE VERY USEFUL FOR SHOWING RELATIONSHIP
AMONG VARIABLES.
(ii) MOSAIC/ STATUE MODELS – THEY ARE SCALED PHYSICAL REPLICAS OF
OBJECTS OR PROCESSES. ARCHITECTURAL MODEL OF NEW BLDGs &
HIGHWAY ENGG., REPLICAS ARE MODELS OF THIS TYPE.
(iii) MATHEMATICAL MODELS AND OPTIMISATION (y = a + bx) : THEY SHOW
FUNCTIONAL RELATIONSHIP AMONG VARIABLES BY USING
MATHEMATICAL SYMBOLS & EQUATIONS. IN ANY EQUATION VARIABLES
ARE X, Y AND CONSTANTS AS a, & b. SIMILAR SYMBOLS ARE USED TO
EXPRESS PRECISE FUNCTIONAL RELATIONSHIP AMONG VARIABLES.

13. OPTIMISATION : IN THESE MODELS, IF WE WANT TO FIND BEST SOLUTION (GOAL), AN
OPTIMISATION ALGORITHM i.e. PRESCRIBED BY SET OF STEPS (i.e. PROCEDURE) IDENTIFIES THE
STEPS FOR DOING SO.
(i) HEURISTICS :
(aa) THEY ARE USEFUL FOR PROBLEMS FOR WHICH OPTIMISATION
ALGORITHMS HAVE NOT YET BEEN DEVELOPED
(ab) HEURISTICS IS A WAY (STRATEGY) OF USING RULES OF THUMB OR DEFINED DECISION
PROCEDURE TO ATTACK A PROBLEM.
(ac) IN GENERAL WHEN WE USE HEURISTICS, WE DO NOT EXCEPT TO ATTAIN THE BEST
POSSIBLE SOUTION TO PROBLEM, INSTEAD WE HOPE FOR SATISTFACTORY SOLUTION QUICKLY
(ad) FORMALLY DEVELOPED HEURISTICS PROCEDURES ARE CALLED HEURISTICS ALGORITHM.