Operations management is that part of a business organization responsible for planning and coordinating the use of the organization’s resources to convert inputs into outputs. The operations function is one of three primary functions of business organizations; the other two are marketing and finance.

The operations function is present in both service-oriented and product-oriented organizations. Operations decisions involve design decisions and operating decisions. Design decisions relate to capacity planning, product design, process design, layout of facilities, and selecting locations for facilities. Operating decisions relate to quality assurance, scheduling, inventory management, and project management.

The chapter also presents a brief overview of the historical evolution of operations management and it ends with a list of strategic issues that are currently high priority for business organizations. At the top of that list are the Internet and e-business, supply chain management, management of technology, and agility.