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CMA Intermediate · Operations Management and Strategic Management · Introduction to Operations Management

Which of the following is a core function of operations management, as distinct from marketing and finance, in a business organisation?

Operations management designs and runs the transformation processes that turn inputs into goods or services. Fund-raising and dividend decisions are finance functions, while demand surveys and advertising are marketing functions, so process design and day-to-day running is the operations function.

  1. ADesigning the processes that convert resources into goods or services and managing their day-to-day runningCorrect
  2. BRaising long-term funds through debentures and preference shares
  3. CForecasting consumer demand through market surveys and advertising
  4. DDetermining the dividend payout policy for shareholders

Explanation

Operations management is concerned with designing, operating and controlling the transformation process that produces goods or services. Raising funds and dividend policy belong to finance, and demand surveys and advertising belong to marketing. Hence only the first option describes the operations function.

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