Final answer:
Operations Management is applicable to both manufacturing and service sectors, addressing the production of goods and services by considering production costs, market structure, and other business decisions.
Step-by-step explanation:
The statement that Operations Management (OM) principles are exclusively applicable to firms that produce tangible products is not true. OM is a critical component of both manufacturing and service sectors. It concerns itself with the design and management of processes, products, and services, ensuring that the organization effectively turns inputs into outputs, whether they are goods or services. In other words, irrespective of whether a firm produces physical goods or offers intangible services, it must consider questions such as what product or services to offer, how to produce these products, how much output to generate, what price to charge, and how much labor to employ.
These decisions are influenced by production and cost conditions specific to each firm and market structure parameters like market power, product similarity, and barriers to entry. This multifaceted approach demonstrates that OM is fundamental in guiding firms through the complexities of producing goods and services, not limiting itself to any single category of product.