Lesson+06

Lesson 6 - Production, Distribution, and Other Business Operations

Important Terms for this Lesson • product – everything a business offers to satisfy a customer’s needs • services – activities that are consumed at the same time they are produced • intangible-something that has no physical form • inseparable-something that is consumed at the same time it is produced • perishable-the availability of a service to match the demand for the service at a specific time • heterogeneous-characterized by the differences in the type and quality of service provided • price-money customer must pay for a product or service • distribution-the locations and methods used to make a product or service available to the target market; determining the best ways for customers to locate, obtain, and use the products and services of an organization • channel of distribution-the route a product follows and the businesses involved in moving a product from the producer to the final consumer • channel members-businesses that take part in a channel of distribution • applied research-marketing research that studies existing products to develop design improvements or new product ideas • pure research-research done without a specific product in mind with the goal of discovering new solutions to problems • production process-the activities, equipment, and resources needed to manufacture a product • Continuous Process Improvement-a way to make sure manufacturing processes are completed as effectively as possible, increasing the quality of work by reducing errors, inefficiencies, and waste (rather than waiting for a problem to occur, processes are continuously reviewed with the goal of finding ways to improve them) • benchmark-the best practices among all competitors <span style="font-family: Arial,Arial;">• contingent worker-one who has no explicit or implicit contract for long-term employment <span style="font-family: Arial,Arial;">• intermediary-business involved in selling goods and services of producers to consumers and other businesses <span style="font-family: Arial,Arial;">• service business-business that carries out activities that are consumed by its customers <span style="font-family: Arial,Arial;"> <span style="font-family: Arial,Arial;">﻿ ||  || Summary of this Lesson: <span style="font-family: Arial,Arial;">What is manufacturing? **A:** <span style="font-family: Arial,Arial;">Manufacturing combines raw materials and processed goods into finished products. **Q:** <span style="font-family: Arial,Arial;">What is materials processing? **A:** <span style="font-family: Arial,Arial;">Materials processing involves changing the form of raw materials so they can be consumed or used to make other products (example: refining crude oil to form gasoline and other petroleum products). **Q:** <span style="font-family: Arial,Arial;">How is applied research different than pure research? **A:** <span style="font-family: Arial,Arial;">Applied research is conducted for existing products and pure research is conducted for possible new products. **Q:** <span style="font-family: Arial,Arial;">What is an operational plan? **A:** <span style="font-family: Arial,Arial;">The operation plan identifies how work will be done, who will do it, and what resources will be needed. **Q:** <span style="font-family: Arial,Arial;">What is meant by services being inseparable? **A:** <span style="font-family: Arial,Arial;">Services are consumed at the same time they are produced. **Q** <span style="font-family: Arial,Arial;">: Why do companies encourage idea screening? **A:** <span style="font-family: Arial,Arial;">Idea screening develops a large number of product ideas and more possible selections. **Q:** <span style="font-family: Arial,Arial;">How are services different than products? **A:** <span style="font-family: Arial,Arial;">Services are intangible and products are tangible. **Q:** <span style="font-family: Arial,Arial;">Why have manufacturers implemented Continuous Process Improvement (CPI)? **A:** <span style="font-family: Arial,Arial;">CPI increases the quality of work by reducing errors, inefficiencies, and waste. ||
 * • <span style="font-family: Arial,Arial;">marketing research – finding solutions to problems through carefully designed studies involving customers
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