Operations Management and Services Term Paper

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Management of Goods and Services

Difference between the operations management chain for both goods and services

Difference between the management of goods and services

Difference between the production of goods and services

What gets companies business

Difference between the operations management chain for both goods and services

The basic difference between goods and services is that the former is tangible and hence can be stored whereas the latter is intangible and cannot be inventoried.

From the perspective of operations management, there are some basic differences between goods and services.

Forecasting of goods involves long-term horizons where manufacturers are able to use physical inventory as a buffer to tackle forecast errors. In the case of services, the forecast periods are shorter and are more variable and time- dependent. Hence, forecasting is generally done on a daily or hourly basis.

In terms of facility location, for goods, the manufacturing facilities can be situated close to where the raw materials are available and could be away from the customer. For services, however, the facilities have to be close to where the customers are situated.

The design of the facility or the outlet for goods can be done according to the manufacturer as there are very few customers there at any one point in time. On the other hand for services, since there are a number of customers present or expected to be present at any point in time, the facilities have to be designed according to what the customers want.

The technology used in goods manufacturing is flexible and can be of many types to suit production strategy but services technology is more information based.

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Quality for goods is tangible and measurable but for services it is not so.

The process design for goods can be more mechanic as customers do not have any role in the process whereas for services the process is reliant on the customer as they have a large participation in service creation and hence cannot be automated but needs to be customized.

Scheduling for goods manufacturing is centered around movement and location of the materials, parts, and the subassemblies and is at the discretion of the manufacturer. In the case of services, however, the scheduling is entirely dependent on the capacity of services available, the demands of the customers and availability of the parts where the service provider have little discretion.

Difference between the management of goods and services

There are a number of differences in the way and manner goods and services are managed. As already discussed, the primary difference between goods and services is that the former is tangible and the latter is intangible. Therefore, the first difference that occurs in the management of the two is that for goods, the management process has more time to set up a strategy as the goods can be stored for a certain period of time. However, since services cannot be stored management decisions have to be instant.

Forecasting is possible for goods and they can be produced and stored for future sale….....

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