Operating Decisions:

The decision associated to planning production to obtain the desired demand. The major function of operations is to take the orders produced by marketing function for products and services from customers and deliver services and products in such a way that there are satisfied customers at reasonable price. Examples of such a planning are as follows  :    

• Deciding what products and quantity of each of the item to be included in next month's production schedule.
• Deciding the quantity of finished goods inventory to carry for each of the product.
• Deciding whether enhance production capacity next month on the basis of working overtime or providing subcontract of production to suppliers.
• Deciding the details of a plan for buying raw materials to support next month's production schedule.

Figure: Developing Overall Strategy

 These decisions are pertaining to the variety of difficulty arising in operations, mostly it handle planning and controlling operations. Decisions regarding with day to day activities of worker's, quality of services and products, production and overhead expense and maintenance of machines come in the category of control decisions. Operation managers get engaged in analyzing, planning and controlling activities in order that poor work performance and inferior product quality do not interfere with the profitable operation of the production system.