• Combination of inputs to produce outputs. Its a function of business.
• Outputs = goods/services
• Primary/Secondary/Tertiary/Quaternary Sectors are used to combine input to output.
  • Land, Labor, Capital and enterprise are used.
• Production:
  • Process of organisation of resources to create goods and services (More physical or the actual production of goods/services)

The role of operation management.

• Added value: Difference between selling price and cost of production.
• Inputs: Factors of Production
• Production processes: Adding Value
• Outputs: Physical goods and intangible services.
• Productivity:
  • Measuring a firm’s efficiency, or how well the firm is performing.
  • Rate of which inputs are being transformed into outputs.
    • To improve productivity in the business, they can either focus on labor/capital intensive production methods. (Can be a mixture of both, it usually means one is being used more than the other method)
• Connected with other parts of the business
  • Some departments are connected with each other in a way to ensure no mistakes are made.
• Certain operations methods (methods of production) or decisions may require higher or lower levels of staffing. For example, flow production and capital-intensive output require the approval from the finance department because of the large amount of money needed for mass production.
• Producing exclusive, one-off products using job production (customized production) enables the marketing department to sell these goods or services at a premium price.
• Market research is required prior to the operations management department producing the goods or providing the services to meet the needs and wants of customers.
• The organization's goods and services need to be promoted by the marketing department so that customers are informed and persuaded to purchase these. In addition, the products need to be made available to customers using an appropriate range of distribution channels.
• Funds needed for research and development expenditure, including finance for creating and testing prototypes, need approval and support from the finance department.
• Production managers are held accountable for their budgets and the organization's various items of expenditure.
• Production operatives need to be recruited, trained, and developed to work effectively, irrespective of what goods or services are being provided. Similarly, supervisors and quality control inspectors may also need to be hired with the support of the human resources department.