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Managing Operations Vs. Service Organizations

Compare and contrast the challenges involved with managing service organizations against those of manufacturing operations. Discuss which you would rather manage and why.

Analyze the four costs associated with maintaining an inventory to determine which appears to be most controllable by any organization. Explain your rationale.

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Managing a service organization is typically concerned with managing variability. Consider a tax preparation service. Each individual tax return is going to be unique, so managing this sort of firm requires flexibility to be able to handle a wide swath of workload variability likely to occur.

Managing a manufacturing organization is similar to managing a service organization in that you will run into variability, but the goal is to have none. In other words, a manufacturer is trying to resist variability at all costs. Now, a service firm that wants to capture all the variability ultimately is similar to a manufacturer in that it will want to reduce that same variability at some level. For example, consider our tax preparer again. They will want to have the flexibility to capture as much of the marketplace as possible by being flexible and ...

Solution Summary

The Solution compares managing a service organization with a manufacturing operation and identifies the challenges of each. Four costs related to inventory are identified and ranked.