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Accountancy Business and

Management (ABM)
ENTREPRENEURSHIP
Quarter 2 – Module 2
Operation Management
ABM 12 – Entrepreneurship
Alternative Delivery Mode
Quarter 2 – Module 2: Operation Management
First Edition, 2020

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 What I Need to Know
This module was designed and prepared for you. It is here to help you to know
more about business. The objectives of each lesson will serve as your gauge as to the
knowledge you will hone upon completing this module. Pre-assessment and post-
assessment are included which deal with the topics that are covered. It will measure of
how well you have learned the module.

This module was aligned with the DepEd Senior High School curriculum.
The module has one lesson namely:
Lesson 1 – Operation Management

After going through this module, you are expected to:

1. Demonstrate understanding of operation management;

What I Know
Choose the letter of the best answer. Write the chosen letter on a sheet of paper.
1. It is about how organizations produce or deliver the goods and services that
provide the reason for their existence. What is it?
a. Business Management
b. Operation Management
c. Production
d. Production Management

2. What is this that involves setting objectives and targets for different aspects of
the organization?
a. Machines
b. Management
c. Money
d. Materials

3. It is a fact about your product that describe your product/service in terms of

texture, color, taste, size, shape and weight. What is it?
a. Product benefits
b. Product features
c. Product sample
d. Product output

4. What do we call this working capital that meet day to day business requirements
and the funds involved in meeting those requirements?
a. Machines
b. Management
c. Money
d. Materials

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5. It is an explanation of what that feature does for your customer. What is it?
a. Product benefits
b. Product features
c. Product sample
d. Product output

6. What is this basic tools that produce goods or to generate services?

a. Machines
b. Management
c. Money
d. Materials

7. It is the whole series of activities that create and build at every step.
a. Operation
b. Product
c. Production description
d. Value chain

8. What is this basic ingredients in management be it a service industry or a product

industry?
a. Machines
b. Management
c. Money
d. Materials

9. It means an art of doing. It is a set of procedures and instructions, these are

visible methods of a company: Plans, Policies, Procedures, and Data. What is it?
a. Machines
b. Man power
c. Method
d. Money

10. Who are they who push and sell the products to the customers?
a. Machines
b. Man power
c. Method
d. Money

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 Lesson

2 Operation Management

Operations Management is about how organizations produce or deliver the goods

and services that provide the reason for their existence. Operations can be seen as one
of many functions within the organization like for examples; marketing, finance and
personnel. The operation function can be described as that part of the organization
devoted to the production or delivery of goods and services. This means all organizations
undertake operations activities because every organization produces goods and/or
services.

What’s In

Operation activities involved in the day-to-day functions of the business

conducted for the purpose of generating profits.

Activity: (Use separate sheet of paper.)

1. What are the importance of operation functions in one business firm? Can you
explain why?

What’s New

According to the business dictionary, operations is defined as jobs or tasks of one

or more elements or subtasks, performed typically in one location. Operations transform
resource or data into desired goods, services, or results, and create and deliver value to
the customers. Two or more connected operations constitute a process, and are
generally divided into four basic categories: (1) processing, (2) inspection, (3) transport,
and (4) storage.

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 What is It

The 6M’s of OPERATIONS

1. Method
Everything has a right way to do and this right way is known as a method in
management. It means an art of doing. It is a set of procedures and instructions,
these are visible methods of a company: Plans, Policies, Procedures, and Data.

The less visible ones include a company’s norms and its culture. The norms and
culture of the society around it and the methods of its customers, suppliers,
associates, and competitors.

2. Manpower
When examining the Methods, you now have in place, what is the ideal number
of people it will take to perform these methods and what positions should they be
in? How will the personnel be trained and measured for performance? What is the
“cycle time” of each part of the Method?

3. Machine
Machines are the basic tools to produce goods or to generate services. Selection
of an appropriate machine not only enhances efficiency but also saves time and
increases revenue. The organization budget are the crucial criteria while purchasing
a machine.

Maintenance and overhauling issues along with its life span also cannot be
overlooked. Determining accessibility of the facilities, vehicles and tools needed to
maximize the efficiency and productivity.

4. Material
Material is a basic ingredients in management be it a service industry or a
product industry. Most of the industries locate them self-nearby to the availability
of material. Inventory numbers, raw material levels, quality of obtained materials,
set size, surplus/waste materials and shelf life.

5. Money
Management is done to meet day to day business requirements and the funds
involved in meeting those requirements are known as working capital.

6. Management
Management by objectives. This involves setting objectives and targets for
different aspects of the organization. The manager’s job is then to make sure that
these objectives are achieved given an allocated amount of resources. The objectives

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 will either be achieved, exceeded, or fallen short of requiring remedial action where
appropriate.

PRODUCT DESCRIPTION

Product Features
A feature is a fact about your product. Describe the features of your
product/service in terms of texture, color, taste, size, shape and weight. Also include
the name of your product and how it looks when you give it to the customer.

Product Benefits
A benefit is an explanation of what that feature does for your customer. What is
the benefit of your product? How will your product help your customer? How can make
the life of your customer easier, richer, or more pleasurable?

VALUE CHAIN

A value chain is the whole series of activities that create and build value at every
step. The total value delivered by the business is the sum total of the value built up all
throughout the business.

PRIMARY ACTIVITIES

INPUT

TRANSFORMATION
PROCESS

OUTPUT

Your primary activities must answer the following questions:

• What do you need to produce?

• How do you produce it?

• How do you distribute it? Where will you distribute it?

• What are your marketing activities?

• What are your sales activities?

• What are your after sales services?

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SECONDARY ACTIVITIES

Your secondary activities must answer the following questions:

• How do you procure necessary resources for the enterprise?

• What’s the needed manpower? How do you hire? Compensate? Retain? Or even fire
out, if necessary?

• What are the procedures? Policies? Necessary technical knowledge?

• What is the management infrastructure? Organizational chart? Planning? Finance?

What’s More

Activity: Please answer on a separate sheet of paper.

Matching Type:

__________ 1. Money a. it is the whole series of activities that create

and build at every step

__________ 2. Man Power b. it is the funds involved known as working

capital

__________ 3. Management c. it is the tangible goods/services that we offer

to our customers

__________ 4. Method d. it means an art of doing and a set of

procedures and instructions

__________ 5. Materials e. they are the one who push and sell the
products to the consumer

__________ 6. Machine f. it is the basic tools to produce goods or

generate services

__________ 7. Operation g. it is the basic ingredients in mgt. be it a

service/product industry

__________ 8. Value Chain h. it is the transformation of input to output

__________ 9. Process i. this involves setting objectives and targets in

the organization

__________ 10. Product j. it is how the organization produce or deliver

the goods and services

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 What I Have Learned
Operations can be seen as one of many functions within the organization like for
examples; marketing, finance and personnel. The operation function can be described
as that part of the organization devoted to the production or delivery of goods and
services. This means all organizations undertake operations activities because every
organization produces goods and/or services.

There are six M’s of operations: method, man power, machines, materials,
management and money. These six are very important in operating a business. Product
features and benefits give complete descriptions to the consumers which lead to a
buying customers. Value chain is the whole series of activities that create and build
value at every step. The total value delivered by the business is the sum total of the
value built up all throughout the business.

What I Can Do
Direction: Write your answer on a separate sheet of paper.

1. Make a brief explanations about the six M’s of your business plan. Please elaborate
your answer.

Assessment
Choose the letter of the best answer. Write the letter on a separate sheet of paper.

1. It is a fact about your product that describe your product/service in terms of

texture, color, taste, size, shape and weight. What is it?
a. Product benefits
b. Product features
c. Product sample
d. Product output

2. What is this that involves setting objectives and targets for different aspects of
the organization?
a. Machines
b. Management
c. Money
d. Materials

3. It is about how organizations produce or deliver the goods and services that
provide the reason for their existence. What is it?
a. Business Management
b. Operation Management
c. Production
d. Production Management

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4. Who are they who push and sell the products to the customers?
a. Machines
b. Man power
c. Method
d. Money

5. What do we call this working capital that meet day to day business requirements
and the funds involved in meeting those requirements?
a. Machines
b. Management
c. Money
d. Materials

6. It means an art of doing. It is a set of procedures and instructions, these are

visible methods of a company: Plans, Policies, Procedures, and Data. What is it?
a. Machines
b. Man power
c. Method
d. Money

7. It is an explanation of what that feature does for your customer. What is it?
a. Product benefits
b. Product features
c. Product sample
d. Product output

8. It is the whole series of activities that create and build at every step.
a. Operation
b. Product
c. Production description
d. Value chain

9. What is this basic tools that produce goods or to generate services?

a. Machines
b. Management
c. Money
d. Materials

10. What is this basic ingredients in management be it a service industry or a product

industry?
a. Machines
b. Management
c. Money
d. Materials