Production and Operations Management Systems Chapter 1: Introduction

Expanded Input-Output P/OM Model

• Figure below illustrates an expanded version of the input–output transformation model.
• There are many boxes now within the transformation grid.
• Each box represents operations that generate the product line, which can be goods or services.
• Productive P/OM systems have well-designed transformations.

Costs and Revenues Associated with Input-Output (I/O) Models

• Cost management is a key function associated with all aspects of P/OM. A major portion of the cost of goods or services originates with operations. Figure below is meant to illustrate how costs are related to input-output models. Controlling costs is of prime concern to all managers.