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Business - 2 > Operations Management - Production > Flashcards

Operations Management - Production Flashcards

1
Q

3 Types of production

A

Job - one off unique production
Batch - certain number
Flow - continuous

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2
Q

Advantages of job

A
  • unique, so can be sold at higher price
  • skilled workers so higher quality
  • keeps workers motivated
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3
Q

Disadvantages of job

A
  • labour intensive
  • higher cost to produce
  • can’t benefit from economies of scale
  • low amount of sales
  • time consuming
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4
Q

Advantages of batch

A
  • greater quantities can be produced
  • reduced waste
  • standardisation so increased efficiency
  • better quality than flow
  • uses machinery more than job
  • lower wages
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5
Q

Disadvantages of batch

A
  • down time to change machinery over so not producing
  • if one thing goes wrong, while batch is effected
  • gets boring so less motivation
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6
Q

Advantages of flow

A
  • can produce lots more
  • standardised products
  • faster production lowers average cost so benefit from economies of scale
  • lower wages as lower skilled workforce needed
  • automated so less mistakes
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7
Q

Disadvantages of flow

A
  • lower quality products
  • job gets boring, no motivation
  • breakdowns effect whole production
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8
Q

How to determine what type of production to use?

A
  • what product is
  • size of the business
  • cost of making it
  • how many you need
  • amount of workers
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9
Q

What is specialisation?

A

Where a firm specialises within a market or product

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10
Q

Benefits of a firm specialising:

A
  • efficiency
  • better quality product
  • greater knowledge of the market
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11
Q

Drawbacks of a firm specialising:

A
  • greater risks, compared to those firms with more products
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12
Q

Benefits of workers specialising in one job?

A
  • higher quality products

- motivational

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13
Q

Drawbacks of workers specialising in one job:

A
  • repetitive
  • lower skilled jobs can be demotivating
  • may lead to lower quality
  • may lead to higher absenteeism and higher labour turnover
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14
Q

What is division of labour?

A

How you allocate labour by task

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15
Q

What is productivity?

A

The output per worker

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16
Q

How is productivity calculated?

A

Total output ➗ number of workers

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17
Q

How could you increase productivity?

A
  • setting targets
  • means of motivation
  • improving working conditions
  • training and education
  • more organised production ie. Lean production
  • teamwork
  • improved technology/ machinery
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18
Q

How to calculate capacity utilisation?

A

Hours used ➗ total hours available ✖️ 100

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19
Q

Why don’t you want 100% capacity utilisation?

A

Doesn’t allow for any flexibility

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20
Q

How do you get over 100% capacity utilisation?

A

Subcontracting/outsourcing - firms producing things for you

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21
Q

Other measures of productivity:

A 
Profits 
Costs
Average costs
Revenue
Value analysis
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22
Q

How to increase labour productivity?

A
  • increased technology
  • training
  • motivational techniques
  • lean production techniques
  • flexi hours, job share etc
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23
Q

2 techniques to improve efficiency is known as

A

Work study (observing what you do) and bench marking (setting standards)

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24
Q

How can the firm increase value?

A
  • increased quality means they can increase price
  • lower average costs
  • try and get alternative supplies
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25
Q

4 external economies of scale

A
  1. Auxcillary industry
  2. Labour
  3. Location
  4. Reputation
26
Q

4 Diseconomies of scale

A

Loss of control - business too big to control

Labour relations - workers become demotivated and feel insufficient when so many people are working there

Communication - bigger businesses make it harder to communicate

Bureaucracy - bigger businesses tend to have more rigid systems in place making it harder and more costly to get things done

27
Q

why has quality grown in importance?

A

Because people have more disposable income and there are more suppliers

28
Q

Who is quality identified in the eye of?

A

The consumers

29
Q

Quality control?

A

The observation techniques and activities used to fulfill requirements for quality

30
Q

Quality assurance?

A

The planned and systematic activities implemented in a quality system so that quality requirements for a product or service will be fulfilled

31
Q

Internal measures of quality

A

Looking at increases of sales
Lifespan of product
Reject rate

32
Q

Working out reject rate

A

Number rejected ➗ total number produced ✖️ 100

33
Q

External measures of quality

A 
BSI kitemark 
IOS 9000
ABTA/ATOL 
Woolmark 
Hygiene stars
34
Q

When does a company loose control of quality?

A

When it leaves the factory

35
Q

How does a business try to maintain some control of quality?

A

Warranty
Servicing
Guarantees

36
Q

What’s the previous traditional method for checking quality?

A

Products checked at the end

37
Q

Problems with the traditional method of checking quality?

A

Time wasting
Material waste
Higher costs

38
Q

Benefits to the consumer of having the external measures of quality?

A
  • guarantees replacement if things go wrong
  • gives customers reassurance of high quality
  • confidence in the company
39
Q

What is customer service?

A

Quality assistance and advice provided before during and after the transaction process of a product or service has taken place

40
Q

Why is customer service important?

A

Good customer service gives greater customer satisfaction. Ultimately leading to a better reputation, an increase in sales or repeat sales

41
Q

What are the problems with poor customer service?

A

Can create a bad reputation for the business and perhaps a loss of sales due to having to make refunds or customers not returning. It can also create de motivation of staff.

42
Q

3 types of stock?

A
  1. Finished products
  2. Raw materials
  3. Work in progress
43
Q

Things to think about when it comes to stock control

A 
Cash flow
Costs
Liquidity 
Competition 
Waste 
Storage 
JIT
lead time
Sales/demand 
The product
Production time
Over/under sticking
44
Q

What is lead time?

A

Time it takes from order placed to when it’s received

45
Q

What to consider when purchasing commodities?

Products in their raw state

A 
Price
Quality
Nature of economy/market 
Availability 
How it's been produced 
Alternatives
Lead time
Reputation
Quantity needed
46
Q

What’s overstocking?

A

Holding too much stock

47
Q

What’s understocking?

A

Holding too little stock

48
Q

What’s buffer stock?

A

Holding a minimum amount of stock

49
Q

The problems with overstocking?

A 
Waste 
Damage
Storage costs
Security 
Theft 
Money tied up - opportunity costs 
Monitoring and handling costs
50
Q

What are the problems with understocking?

A 
Loss of orders
Production delays
Loose ability to benefit from EOS
No flexibility 
Could gain bad reputation 
De motivating for staff
51
Q

6 economies of scale

A 
Purchasing 
Technical 
Risk bearing 
Managerial 
Financial 
Marketing
52
Q

Before making a decision a business would carry out what?

A

A SWOT ANALYSIS

Strengths
Weaknesses
(Internal)

Opportunities
Threats
(External)

53
Q

Benefits of working at a high capacity?

A
  • good efficiency
  • greater service so more sales
  • suggests a successful business
  • better use of staff
  • usually less waste
54
Q

drawbacks of working at high capacity?

A
  • less flexibility
  • pressure on the workers can be de motivational
  • mistakes more likely so increase of waste?
  • no downtime for machines
55
Q

What prevents a firm working at full capacity?

A
  • nature of demand for a product
  • competition
  • working capital
  • objectives
  • workforce
56
Q

Main features of lean production?

A 
Total quality management 
Jidoka
Kaizen 
Quality circles 
JIT 
Kanban 
Cell production 
Ergonomics 
Time based competition
57
Q

Internal economies of scale

A 
Managerial 
Marketing 
Technical 
Purchasing 
Risk bearing 
Financial
58
Q

Total quality management

A

Everyone involved
Each part of the process is looked at
Bench marks set
Teamwork

59
Q

Issues faced when introducing TQM?

A
  • change in routine leads to demotivation
  • training required
  • slower production, loss of sales
  • new investment in tech needed
  • may need a change in factory layout
60
Q

Benefits of TQM?

A
  • greater quality and reliability
  • less waste
  • everyone involved so motivation
  • greater skilled staff
  • teamwork
  • more control
  • faults are noticed straight away
61
Q

Cost of overstocking - stock control graphing

A

JIT- just in time
Economic order quantity- ordering the most efficient amount
Fixed reorder level- recording at a certain level
Fixed reorder interval- where the amount may vary but the time they order is the same
Two bin system- once one bin emptied you use the other and full up the empty bin

Business - 2 (4 decks)

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