Chapter 22- The nature of operations Flashcards
What is operations management?
the branch of management that is responsible for managing resources efficiently
Operations managers should be concerned about?
1-efficiency
2-quality
3-flexibility
what is added value?
the difference between the selling price of a product and the cost of bought in materials and components.
How much value is added depends on what factors?
- the design of a product. you cant increase value of some things like water, electricity etc.
- efficiency. products made faster with less waste will automatically increase added value.
- being able to convince customers to pay more for the product. eg. luxury cakes and icecreams etc.
what are the four factors of production?
land, labour,capital, enterprise.
what is intellectual capital?
the intangible assets of a business like relational capital, human capital and structural capital.
what is production
the process of converting inputs to outputs
what is productivity
the ratio of outputs to inputs during production
what is level of production?
the number of units during a time period
How to raise productivity levels?
- training
- technology
- motivation
- effective management
what’s the difference between efficiency and effectiveness?
efficiency is to produce outputs at the highest ratio of outputs to inputs. effectiveness is how productively the business converts inputs into outputs to meet business demands
what are capital and labour intensive production methods?
Capital intensive is when work is majorly done my machines. Labor is vice verca.
what are the factors that influence choice of production method?
- type of work
- cost of production method
- size of the firm and it’s ability to afford high tech equipment.
