Operations Management

Question 1

What is output?

Answer 1

The output of a business is the total amount produced in a
given time period.

Question 2

Define inventory

Answer 2

Inventory refers to the stocks held in a business, such as materials and semi-finished goods.

Question 3

What is operations management?

Answer 3

Operations management oversees the planning, co- ordination and control of the transformation process, turning resources (inputs) into outputs.

Question 4

Define productivity

Answer 4

Productivity measures the output per hour, per person or per machine.

Question 5

Define ‘sustainable operations’

Answer 5

Sustainable activities are those that meet the needs of the business or of society without compromising on the ability to meet future needs.

Question 6

Define Capital intensive

Answer 6

Capital-intensive production means there is a high proportion of capital (for example, machinery) used relative to other factors of production.

Question 7

Define Labour intensive

Answer 7

Labour-intensive production means there is a relatively high proportion of labour (employees) used relative to other factors of production.

Question 8

What is job production

Answer 8

This involves one-off production. Each item is unique for each customer, which means that production is very flexible

Question 9

What is batch production

Answer 9

This occurs when items move together from one stage of a process to another.

Question 10

What is flow production?

Answer 10

This involves large-scale production using production-line technology. It is capable of huge volumes (for example, of cans of beans or bottles of water) but produces relatively standardised products. Products ‘flow’ from one stage to another

Question 11

What is mass customization?

Answer 11

This is a relatively new development made possible by technological advances. This type of process is on a large scale but, whereas mass production usually lacks flexibility, this technology enables a variety of models to be produced on the same production line

Question 12

What is buffer inventory

Answer 12

Buffer inventory is the minimum-amount of inventory a business wants to hold just in case of problems.

Question 13

What is lead time?

Answer 13

The lead time-is how long it take from ordering the supplies from a supplier to them arriving at the business

Question 14

What is the reorder level?

Answer 14

The-reorder level-is the amount of inventory left at which a business needs to place an order so that the new inventories arrive before the business goes below its buffer level.

Question 15

Define supply chain

Answer 15

The supply chain refers to all the different stages involved in making, distributing and selling a good or service, beginning with the material through to the production of parts, through to the distribution and sale of the product.

Question 16

Define supply chain management

Answer 16

Supply chain management involves managing the flow of goods and services, and includes the different processes that transform raw materials into final products.

Question 17

What is lean production

Answer 17

Lean production is an approach that continually seeks to reduce any form of wastage in the production process.

Question 18

What is just-in-time production

Answer 18

Just-in-time production occurs when firms produce products to order.

Question 19

Define capacity

Answer 19

Capacity measures the maximum amount of output a
firm can produce at a given moment with its existing resources.

Question 20

What is capacity utilization

Answer 20

Capacity utilisation measures the existing output relative to the maximum possible output.

Question 21

What is capacity under-utilization

Answer 21

Capacity under-utilisation occurs when a business is producing less than the maximum amount it, given its existing resources.

Question 22

What is rationalization

Answer 22

Rationalisation occurs when a business reduces the scale of its operations and reduces its capacity level.

Question 23

What is subcontracting?

Answer 23

Subcontracting occurs when one business employs another business to undertake some of the work.

Question 24

Define outsourcing

Answer 24

Outsourcing occurs when the business uses other producers to undertake some of its operations.