Production and productivity
❑ Production is defined as a process or procedure to
transform a set of input into output having the desired utility and quality. Production is a value adding process.
❑ Productivity is a related term where output is always expressed in terms of input.
Productivity= Output/ Input
Production System
"The methods, procedure or arrangement which includes all functions required to accumulate (gather) the inputs, process or reprocess the inputs, and deliver the marketable output (goods)."
Production System
Inputs of an Operations System
• External
– Legal, Economic, Social, Technological
• Market
– Competition, Customer Desires, Product Info.
• Primary Resources
– Materials, Personnel, Capital, Utilities
Transformation process
• Physical (Manufacturing)
• Locational Services (Transportation)
• Exchange Services (Retailing)
• Storage Services (Warehousing)
• Other Private Services (Insurance)
• Government Services (Federal)
Output
Direct
– Products
– Services
• Indirect
– Waste
– Pollution
– Technological Advances
