Developing Good Business Sense

Topics: Manufacturing, Supply chain management terms, Customer Pages: 6 (797 words) Published: August 17, 2008
Developing Good Business Sense1

Developing Good Business Sense

Nathan Knight III

Introduction to Business

Instructor Valley Behjou

February 2nd, 2008

Developing Good Business Sense2

Developing Good Business Sense

I made three choices. The first would be the post office. Second, I chose a bank.

The third was a small pizzeria.

The first company I want to talk about is the post office. Our finished goods

would be letters and magazines. These are some of the things that ultimately reach the

customer. First, I would think the United States Postal Service (USPS) is a mass

production operating system. There is a large part of the business that is run by automated

machines. Even though the post office does not produce and products, per say, they do

transport thousands of products per day. The only way to do this would be to operate the

mass production systems. At one point, letters were marked, sorted, and distributed by

hand, one letter at a time. This was a time consuming process. Now there are machines

that sort hundreds of letters in seconds. This is much more cost effective. The whole

operation of the USPS is like a production line. The USPS is run by standard operating

procedures. Mail is either picked up in a receptacle or given to a carrier who then

transports the mail to the office where it is picked up by trucks that bring this mail to a

distribution center where the mail is then separated. Next is to load up the mail that is

separated (by city and state). This mail is then loaded onto trucks headed for the airport

or to other nearby offices. This is just a part of input and output operations of the post

office. This is definitely mass production. The post offices responsiveness to the

customer is their number one priority. Postal customers, which are most of the American

Developing Good Business Sense3

population, like quick, prompt, and efficient service. The USPS is always upgrading

automation and technology to get to the customer faster.

My second choice was a bank. I am not really sure what type of production this

would be, but I do know that this is a form of a service company. Just like the post office,

they deal directly with the public. My best guess for an operating system would be a

small batch production because the bank deals with one specialized product, which would

be money.

My third choice was a small chin of pizzerias. This would definitely be a small batch

production. This company makes small quantities of customized products, which would

be pizza and sandwiches. The operating method of this business is pretty flexible. Each

employee uses judgment on how he or she will adjust to customer demand on any

particular day. An example would be a day where people might want specialized slices

instead of a whole pie (pizza), but on another day, people might order just whole pies,

which all have to be delivered. Operating costs for a company like this tend to be higher.

The reason for this is when more time and effort is spent on making small quantities of a

particular product, the costs are elevated. Companies design their operating systems to

give them a competitive advantage by:

1.Responsiveness to customers.

High quality customer service

Goods after-sale service

2.Superior productivity.

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Better ways to use resources

Lower inventory holding costs


Number of customer orders correctly processed

Ensure supply of high quality inputs


Find ways to improve product quality

Find ways to sell products at a lower cost

The main types of costs that companies have are:

1.Raw materials and component costs. Input materials and component parts compromise the...
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