Question

Which of the following statements is true when we consider operations as a transformation system?

1) Raw materials and finished goods are considered part of the transportation process.
2) Finished products and services are in the middle stage of the transformation process.
3) Labor, capital, and energy are considered as inputs into the system.
4) The communication from inputs to outputs is considered a feedback loop.

Answer 1

The true statement regarding operations as a transformation system is that labor, capital, and energy are considered as inputs into the system. These components are integral to the production function, where inputs are transformed into outputs, like a baked pizza in a pizza-making business. Option 3 is correct answer.

Step-by-step explanation:

When considering operations as a transformation system, the statement that is true is that labor, capital, and energy are considered as inputs into the system. In the context of a pizza-making business, these inputs would include flour, water, and yeast for making dough, along with tomatoes, spices, and cheese for the sauce and toppings.

Labor would entail the pizzaiolo's work in preparing the dough, applying the sauce, adding toppings, and baking the pizza. Capital includes the equipment like the oven and machinery, potentially including the cash register or point of sale system. It does not include the raw materials or finished goods as they are not inputs but rather the transitioning states of the product during the production process.

Energy refers to the electricity or gas used to operate ovens and other appliances in the kitchen. Therefore, the production function is the process where these economic inputs—labor, machinery, and raw materials—turn into outputs, specifically the goods and services that consumers use, such as the baked pizza.