Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16/e

Production/Operations

The production/operations function of a business consists of all those activities that transform inputs into goods and services. production/operations management deals with inputs, transformations, and outputs that vary across industries and markets. A manufacturing operation transforms or converts inputs such as raw materials, labor, capital, machines, and facilities into finished goods and services. The extent to which a manufacturing plant’s output reaches its potential output is called capacity utilization, a key strategic variable. The higher the capacity utilization, the better; otherwise, equipment may sit idle.

As indicated in Table 4-6, Roger Schroeder suggests that production/operations management comprises five ...