Question Question 1





Operationmanagement is a management area that is concerned with controllingand designing the entire process of production and redesigning thebusiness functions in processing of products and services (Anupindi,Chopra, Deshmukh, Van Mieghem, &amp Zemel, 2011).It also entails the tasks of ensuring that all the productionoperations are made capable when an individual chooses to utilize fewresources so as to meet the customers’ requirement. Operationmanagement is important in the management of productivity as well ashigher organizational goals that lead to a significant economicgrowth.


Totalquality management

Totalquality management is considered to be a comprehensive and structuredorganizational management approach that seeks to develop and enhancequality of goods and services through continuing developments inresponse to continuous reaction (Oakland,2014).Total quality management is considered to be a management tool for aconsumer focused organizations that comprises of all workforces inpersistent expansion. It utilizes strategy, data and efficientcommunication to incorporate the eminence discipline in theorganization activities and culture.



Qualitycosts are pragmatically referred to as costs associated withdetecting, remediating and preventing products issues that arerelated to quality. Quality costs can be categorized into thefollowing types

  • Prevention costs: This type of quality costs accentuates that it is much better to prevent imperfection than finding and taking them out from the products. Prevention costs are the costs that are used or incurred to minimize the number of defects. Examples include workers training costs, statistics process control, and cost of improvement of the manufacturing process (Lauga, &amp Ofek, 2011).

  • Appraisal costs: Appraisal costs are considered to be costs that are incurred to discover defective goods and service before the products are transported to the consumers. All costs that are associated with the activities that are done during the process of manufacturing to ensure quality standards are also incurred in this category of quality costs.

  • External failure costs: This type of quality costs accentuates that if defective products have already been shipped to consumers, external failure costs can arise. This includes loss of sale due to bad reputation, replacement and warranties among others. Basically, the transportation of defective goods and services can dissatisfy customers, decline sales and profits and damage goodwill.



Bullwhipeffect is pragmatically referred to as an occurrence that isidentified by the supply chain wherever orders sent to the supplieror manufacturer creates larger variation than the end customer sales(Bhattacharya,&amp Bandyopadhyay, 2011).It also refers to an increasing swing in inventory in response tochange in customers’ demands as one progress further up the supplychain. The causes of Bullwhip effect includes

  • Lack of communication between individual links in the supply chain makes it hard for diverse processes to run efficiently. In this aspect, company managers can perceive a product demand relatively differently in diverse supply chain links and thus order different amounts.

  • Disorganization between every supply chain since a system can order large or small quantity of a product that what is required due to an under or over reaction to the supply chain beforehand.



Strategicpartnership is considered to be a relationship that exists betweentwo commercial businesses which are usually formalized by one or moreenterprises contracts but fall short of structuring a legalpartnership or corporate partner relationship. The aspect of thestrategic partnership is an important move because it enablescompanies’ access to new technologies and also improved theirproduction quality (Gomes,Weber, Brown, &amp Tarba, 2011).Business owners can also establish mutually beneficial relationshipswith vendors, suppliers, banks and card firms to enhance customerservice. Example of the strategic partnership includes Uber andGoogle Maps, Twitter and Museums, WeChat and Taxi App and Spotify andAdidas among others.



Outsourcingis pragmatically defined as a practice used by various firms toreduce costs by shifting portions of activities to outside suppliersrather than carrying out it internally.

Challengesof outsourcing

Signingcontracts with other firms may take time and efforts from thecompany’s legal team (Chavis,Klapper, &amp Love, 2011).Security threat is also another challenge if a different party hasaccess to business confidential data. Lack of communication isanother challenge that may occur between the company and theoutsourced firm which may affect projects completion.



Statementof financial position or balance sheet is considered to be a summaryof financial balances of organization or individual businessoperations (Adrian,&amp Shin, 2014).Balance sheet is habitually explained as a snapshot of theenterprises financial position at the end of a specified period. Itsupports the business by providing the balance of assets, liabilitiesand equity at the end of a specified period of time. It also informsthe reader and investor of the company financial position to make anyinvestment decision.


Sourcesof business financing

Businessfinancing encompasses both short term and long term funds thatcompanies seek for its operations (Massini,&amp Miozzo, 2012).Short term financing are funds that should be repaid within a yearwhile long-term financing is finances that can be paid back over anextended period of time. The source of business financing includes

  • Commercial bank loans where a business can apply for a loan at a particular financial institution in order to finance some of its operations.

  • Retained earnings: For any business, the amount of earnings retained within the business has a massive impact on the amount of dividends. Profits can be reinvested as retained earning that could have been paid out as dividends.

  • Personal resources: Use of personal funds is considered as a direct way to finance own business. This aspect can be done by applying personal savings towards business expenses and cashing out retirement accounts.


Informationsystem (IS)

Informationsystem (IS) is considered as a structured system of the organization,collection, communication and storage of information. A start-uporganization should not immediately invest in an information system(IS) because in organization early stage the company may find itsimple enough just to keep paper records and embrace face to face ortelephone communication rather than using email (Susanto12,Almunawar, &amp Tuan, 2011).Diverse organization at early stages satisfies their informationprocessing and record keeping requirements with the application ofmanual systems. Conversely, as the prices of computers decline andthe business expands, the company may find it vital to invest incomputer-based information systems thus enhancing production.



Databasemanagement system is pragmatically referred to as a system softwarethat is used for managing and creating the database (Clifford,Robinson, &amp Rogers, 2016).DBMS mostly serves as an interface between the end users and thedatabase ensuring that information is consistently controlled andremains easily accessible. The system usually manages three aspects,data, database engine that permits easy access to data and thedatabase plan that basically represents the database’s rationalstructure. In an organization, DBMS is a most important system foroffering a centralized data view that can be assessed by variousconsumers, from various locations, and in a controlled approach.


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