Resource/Profit Model - serves as an organizational model to put operations in a business context

Chapter 2 is devoted to Profitability

• It is the primary business objective

• It measures the long-run productivity of the business
• It is the outcome of effective strategy and value creation

Chapter 3 focuses on Strategy and Value

• Strategy consists of decisions about the way the firm will try to add value. How will the firm’s
resources be aligned?
• Who are the customers? What do they want? How will value be delivered?
• Value is determined by the customer
• Value created must exceed the cost of creating it, or there will be no profitability.
• Value is the basis upon which customers decide to purchase and the basis on which a business
competes.

Chapter 4 examines Processes

• Processes are used to organize resources so that they create value

• Effective Processes give rise to capabilities, which are valued by customers

Chapter 5 examines Cost

• Cost is the amount of scarce resources (usually money) consumed to achieve an objective
• Cost has a huge impact on the customer’s perception of value.
Chapters 6 and 7 are focused on Quality

• Examines quality and its impact on value, while Chapter 7 presents the commonly-used tools
associated with quality improvement.
• The customer determines is a product or service is high quality.

Chapter 8 looks at Timeliness

• Timeliness includes when and/or how fast something happens

• Scheduling a project management are key topics
• Timeliness has an impact on financial performance
• Timeliness is also a part of value for customers

Supply Chain Management is the topic of Chapter 9

• SCM recognizes that decisions within one business affect suppliers and customers

Chapter 10 examines Demand Forecasting

• A projection of future demand is necessary to determine resource requirements and obtain

them in the correct quantities, at the correct time, and at the lowest cost.

Chapter 11 covers Inventory

• Materials used to produce goods and services

• Raw, WIP, Finished Goods, MRO and Supplies

Logistics is the topic of Chapter 12

• Logistics is the movement and storage of goods in a supply chain.

Chapter 13 is devoted to Lean Systems

• A productive system that functions with little waste or excess, usually with low

Chapter 14 is devoted to Capacity

• Capacity is the level of productive output in a specified period of time

Chapter 15 focuses on Constraint Management

• Constraint Management is a framework for managing the constraints of a system in a way that
maximizes the system’s accomplishment of its goals.

Chapter 16 is devoted to Facilities decisions.

• Facilities are the land and buildings that house a business

• The decisions include location and layout decisions

The topic of Chapter 17 is Workforce

• The employees are a critical resource contributing to value creation