Ex. 1. Read the text and then decide whether the statements are true or
Manufacturing companies require three basic functions: finance,
production or operations, and marketing. Finance raises the capital to buy
equipment to start the business, production or operations makes the product,
and marketing sells and distributes it. Operations management is also of
crucial importance to service companies.
The objectives of the production department are usually to produce a
specific product, on schedule, at minimum cost. But there may be other
criteria, such as concentrating on quality and product reliability, producing
the maximum possible volume of output, fully utilizing the plant or the work
force, reducing lead time, generating the maximum return on assets, or
ensuring flexibility for product or volume changes. Some of these objectives
are clearly incompatible, and most companies have to choose between price,
quality, and flexibility. There is an elementary trade-off between low cost
and quality, and another between low cost and the flexibility to customize
products or to deliver in a very short lead time.
Production and operations management obviously involves production
plants and factories or service branches, and the equipment in them, parts
(raw materials or supplies), processes (the steps by which production or
services are carried out), and planning and control systems (the procedures
used by management to operate and monitor the system). But it also involves
people – the personnel or human resources, who will always be necessary in
production and operations, despite increasing automation. People are
particularly important in organizations offering a service rather than making a
product. Such organizations exist to serve the customer, but it can also be
argued that they have to serve their workforce, because workers will often
treat the public the same way that management treats them, so staff training
and motivation are clearly important.
Manufacturing companies all have to decide how much research and
development (R&D) to do. Should they do fundamental or applied research
themselves, or use research institutes, universities, and independent research
laboratories, or simply license product or service designs from other
organizations as necessary? Companies are faced with a ‘make or buy’
decision for every item, process or service.
Decisions about what products to make or what services to offer have to
take into account a company’s operational capability, and labour, capital and
accurate sales forecasting. If it is necessary to construct a new plant or
facility, decisions have to be made concerning its location, its size or
capacity, the floor layout, the hiring of staff, the purchase of equipment, the
necessary level of inventory of parts and finished products, and so on.
1. Production or operations management is important to all businesses.
2. Production departments usually concentrate on quality, quantity, and
3. Workers who are treated well will probably be more productive.
4. Large companies are generally obliged to do their own research and
5. Decision-making concerning new products or the building of new
production facilities follows sales forecasting.
6. Not all manufacturing companies have to decide how much R&D to do.
Ex. 2. Match the verbs (1–8) to their meanings (a–h).
1 launch a to stop making
2 test b to build or make
3 promote c to introduce to the market
4 manufacture d to change in order to improve
5 modify e to try something in order to see how it works
6 discontinue f to make a plan or drawing
7 design g to increase sales by advertising, etc.
8 distribute h to supply shops, companies, customers
Ex. 3. Complete the sentences by changing the word in brackets into an
1. People seem to be buying our ….. products more than ours these days.
2. Perhaps our prices just aren’t ….. enough.