Page 13 - DCAP208_Management Support Systems

Management Support Systems

Notes Management makes a non-programmed administrative decision to implement an organizational
downsizing plan to reduce duplication of services, decrease costs and increase profitability.

Operational Decisions

The different types of operational decisions include:
1. Quality: Decision making regarding product and service quality is a vital operations
responsibility necessitating comprehensive organizational support. Quality decisions are
made in the design stage of the product or service plan and require the creation and
maintenance of standards.
2. Process: Operational decisions are made regarding the design of the process used in the
manufacturing or servicing of a final product. Process decisions normally are long range
and cannot easily be reversed.
3. Capacity: Operational capacity decisions are concerned with the long-term capability of
an organization to produce the required amount of output over time.

Did u know?Capacity planning determines not only the size of an organization‘s physical
productive capability, but also its human resource needs.

4. Inventory: Inventory decisions are crucial in fulfilling management‘s inventory
management strategy. The challenge for operations management is to create a balance in
inventory between product demand, cost, and supply needs.
5. Human Resources: Human resources are an extremely important operational management
responsibility. Organizations pay a major portion of their revenues to employees.
Therefore, selection, hiring, training, termination, and general management of human
resources are critical for the future of the organization.

Example: The franchise management of a fast-food retail chain makes a determination
concerning quality standards in terms of the content and temperature of the food when it is
served to the customer. It implements a program to ensure the individual franchises meet the
quality standards.
The management of a car-washing company makes a process decision to utilize a brushless
car-washing facility that requires fewer workers, results in less damage to the car finish, and is
more productive.
A seasonal manufacturer of lawn equipment makes a capacity operational decision to hire and
train a second shift of employees during peak demand periods rather than increase overall plant
capacity. This will make more productive use of existing capacity without increasing long-term
overhead costs including plant maintenance and capital financing costs.
The franchise manager of a chain of job printers makes an operational decision to allow the
individual store managers to buy their own printing supply inventory as long as they use the
franchise‘s equipment.
A franchise manager makes a human resource operational decision to allow individual
franchisees to hire, train, and supervise their own employees. Thus, the individual franchisee
has the entire human resource operational responsibility.
The Managerial Decision Making Process can be understood from figure 1.2.

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