Business Operations: Unit 40 - 42 Flashcards
(53 cards)
1
Q
- What is economies of scale?
A
financial advantages(falling in average costs) of producing something in very large quantities.
2
Q
- What is diseconomies of scale?
A
- rising average costs when a firm becomes too big.
3
Q
- What is internal economies of scale?
A
cost benefits that an individual firm can enjoy when it expands.
4
Q
- What are 6 reasons/ types of economies of scale?
A
- purchasing economies
-marketing economies - technical economies
- financial economies
- managerial economies
- risk bearing economies
5
Q
- What is external economies of scale?
A
cost benefits that all firms in the industry can enjoy when the industry expands.
6
Q
- What are the 4 reasons for external economies of scale?
A
- skilled labor
- infrastructure
- ancillary(less important but main part of services) and commercial services
- cooperation (when firms in the same industry are likely to cooperate with each other)
7
Q
- What are the reasons for diseconomies?(3)
A
- bureaucracy
- labor relations
- control and coordination
8
Q
- What are the 4 barriers that might prevent a business from growing in size?
A
- lack of finance.
- nature of the market.
- lack of managerial skills.
- lack of motivation.
9
Q
- What is bureaucracy?
A
system of administration that uses a large number of departments and officials.
10
Q
- What is ancillary?
A
- are services that are connected with something but less important than the main part of it.
11
Q
- What is a scale?
A
size of business.
12
Q
- What is production?
A
- the transformation of resources into a final product.
13
Q
- What are the 3 methods of production?
A
- job production
- batch production
- flow production
14
Q
- What is job production?
A
method of production that involves employing all factors to complete one unit of output at a time.
15
Q
- What is batch production?
A
- method that involves completing one operation at a time on all units before performing the next/
- method that involves completing the production of a number of products to the same design and then to another product of a different design.
16
Q
- What is flow production?
A
large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line.
17
Q
- What are the 4 features of flow production?
A
- large quantities are produced.
- a standardized product is produced.
- a semi-skilled workforce.(specializing in one operation only is employed)
- large amounts of machinery and equipment are used.
18
Q
1. * **
- What is another form of flow production? define it.
A
process production:- a form of flow production where materials pass through a plant and a series of processes are carried out in order to change the product.
19
Q
19 What are two types of production?
A
- labor-intensive production
- capital intensive production
20
Q
- What is labor- intensive production?
A
production methods that make more use of labor relative to machinery.
21
Q
- What is capital-intensive production?
A
production methods that make more use of machinery relative to labor.
22
Q
- What are the four advantages of job production?
A
- Value added product tailor-made for the customer.
- high level of customer satisfaction
- can be sold for a premium price
- increased job satisfaction.
23
Q
- What are the four disadvantages of job production?
A
High avg. cost of production, no economies of scale.
time-consuming because you’re tailoring the job
A wide range of tools, machinery, and equipment required
Highly skilled labor is required
Workers demand high pay
24
Q
- What are the 3 advantages of batch production?
A
Economies of scale – lower average cost of production
- Division of labor and specialization
- Batches can be varied to meet customers’ needs.
25
25. What are the 4 disadvantages of batch production?
- High level of WIP and stock holding cost at the end of every process.
- Boring work – repetition of work therefore workers will be demotivated.
- More complex machinery maybe needed.
- Careful planning and co-ordination is needed
26
26. What are the 4 advantages of flow production?
- It is the high output of standardized product
▪ Costs are lower leading to lower prices
▪ Goods are produced quickly and cheaply
▪ Automated production lines can operate 24 hours a day
27
27. What are the 4 disadvantages of flow production?
▪ Very expensive machinery is required. Start-up capital cost is high.
▪ Worker motivation can be low – repetitive tasks.
- Takes a long time to set up the machines to make a product.
▪ Breaks in production can be very expensive
28
28. What is productivity?
- the rate at which goods are produced and the amount produced, in relation to the work, time and money needed to produce them.
29
29. What is labor productivity?
- output per worker in a given time period.
30
30. How to calculate labor productivity?
Total output/ no. of workers
31
31. How to calculate capital productivity?
total output/ capital employed
32
32. What is flexitime?
system in which people work a fixed number of hours each week or month, but change the times at which they start and finish each day.
33
33. What are the four ways labor productivity be improved?
- government invests more in education by providing more equipment.
- People are better motivated at work.
- Labor is organized and managed more effectively
- Labor is more flexible.
34
34. What are the 4 ways to increasing productivity of capital?
- downsizing
- relocation
-outsourcing
- lean production
35
35. What is downsizing?
- a process of reducing capacity, usually by laying off staff.
36
36. What is outsourcing?
- contracting out of work that might otherwise have been performed within the organization to other businesses.
37
37. What are the 4 impacts on business of productivity improvements?
(as a result of efficiency)
- financial impact
- competitiveness
- workforce
- customers
38
38. What is lean production?
- an approach to production aimed at reducing the quantity of resources used.
39
39. What are the 4 benefits of lean production?
- raises productivity
- reduces costs and cuts lead times
- reduces the number of defective products
- improves reliability and speeds up product design.
40
40. What is just-in-time?
- a production technique that is highly responsive to customer orders and uses very little stock holding.
41
41. What are the 6 advantages of JIT?
- cash flow is improved.
- no waste, out of date or damaged stock
- space is released
- no stock holding costs
- Stronger links with suppliers
- fewer suppliers
42
42. What are the 5 disadvantages JIT?
- high ordering and administration costs
- relies hugely on suppliers' reliability
- advantages of bulk- buying may be lost.
- hard to cope with changes in demand
- vulnerable to a break in supply.
43
43. What is tailor made?
- where a product has been designed so that is exactly right for someone's needs.
44
44. What is stockpile?
- a large supply of goods and so forth that are being kept for use or possible use in the future.
45
45. What is Kaizen?
KAIZEN is a Japanese term meaning ‘continuous improvement’ through the elimination of
waste.
46
46. What are the 3 examples of waste in Kaizen?
- time wasted while staff waits around.
- time wasted when workers move unnecessarily in the workplace.
- the irregular use of a machine.(using once a month)
47
47. What are the 5S?
- Sort - get rid of clutter
- Set in order - organize the work area
- Shine- work area and equipment are clean
- Standardize - adopt effective working practices,
- Sustain - adopt the systems of 4s
48
48. What are the 6 practices adopted as a result of kaizen?(SSTEMQ)
- standardization
- teamworking
- empowerment
- suggestion schemes
- quality circles
- multi-skilling
49
49. What are the 4 benefits of teamworking?
- workers develop team spirit may improve motivation and productivity.
- flexibility might improve.
- Quick decision-making and more ideas
- Communication and labor relations might also improve.
50
50. What is empowerment?
-is when workers in a company are given more responsibility by being allowed to organize their own work and make decisions without asking their managers.
51
51. What are quality circles?
small group of factory workers who meet regularly to discuss ways to improve working methods and to solve problems.
52
52. What are the 4 importance of using resources effectively/ lean production?
- financial benefits
- improved competitiveness
- positive environmental effects.
- improved customer service.
53
