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Chapter 8 Production of Goods Study Guide

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Term
Definition
operations management   The area of management responsible for the activities necessary to produce goods and services.  
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Utility   Describes the characteristics of a product that satisfy wants and needs.  
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productivity   The measure of a worker’s production in a specific amount of time is  
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custom manufacturing   Converting resources to a product that fits the specifications of a particular customer.  
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production process   All the activities required to create a product.  
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Work in process inventory   Consists of products that are partially converted.  
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perpetual   inventory-control system is a method of counting inventory that shows the quantity on hand at all times.  
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inventory shrinkage   The difference between the perpetual inventory and the physical inventory.  
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prototype   A working model of a new product for testing purposes.  
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trade show   A large gathering of businesses for the purpose of displaying goods and services for sale.  
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division of labor   Specialization of individuals who perform specific tasks.  
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finished goods inventory   Assortment or selection of finished items for sale that a business has in stock.  
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brand   Name, term, or design that sets a product or business apart from its competition.  
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image   Idea that people have about someone or something.  
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direct materials inventory   Raw materials needed to produce a finished product.  
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materials processing   Changing the form of raw materials for another use.  
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new product   Product that is different in some way from existing products.  
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repositioning   Marketing an existing product in a new way.  
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sourcing   Finding suppliers of materials needed for the production of a product.  
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repackaging   Using new packaging on an existing product.  
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test marketing   Introducing a new product to a small portion of the target market to learn how it will sell.  
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conversion   The process of changing and improving resources to create goods or services.  
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mass production   Manufacturing goods in large quantities using standard techniques.  
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supplier   Business that sells materials, supplies, or services to an organization that creates product.  
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inventory   The assortment or selection of items that a business has on hand at a particular point in time.  
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product planning   The process of deciding which products will be most strategic for the organization to produce.  
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production   Includes any activity related to making a product.  
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business purchasing   The activity of acquiring materials, supplies, or services necessary to create a product.  
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trial run   Used to test a new service.  
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