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Business AS Flashcards :) > Business - Unit 4: Decision-making to Improve Operational Performance > Flashcards

Business - Unit 4: Decision-making to Improve Operational Performance Flashcards

1
Q

Cost and volume objectives

A

Unit costs per item
Contribution per unit

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2
Q

Quality objectives

A

Reliability
Customer satisfaction

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3
Q

Efficiency and flexibility objectives

A

Capacity utilisation
Order lead times

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4
Q

Environmental objectives

A

Rate of energy efficiency
Percentage of supplies of raw materials from sustainable sources

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5
Q

Innovation

A

Putting a new idea or approach into action

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6
Q

Product

A

Launching new or improved products on to the market

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7
Q

Process

A

Finding better or more efficient ways of producing existing products or delivering existing services

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8
Q

Benefits of Innovation

A

Motivates workers
Improves waste reduction
Improved quality
Enhances reputation as a innovative company

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9
Q

Drawbacks of Innovation

A

Hard to achieve
Customers might not want the product

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10
Q

Internal influences on Operational Objectives

A

Corporate objective
Finance
Human Resources
Marketing issues

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11
Q

External influences on Operational Objectives

A

Economic environment
Competitor efficiency and flexibility
Technological change
Legal and environmental change

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12
Q

Capacity utilisation

A

Measures the extent to which capacity is used during a specific period

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13
Q

Why is Capacity Utilisation important?

A

Useful measure of productive efficiency
Average production costs tend to fall as output rises
High level of capacity utilisation is required if a business has a high break-even output due to significant fixed costs of production

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14
Q

Why do businesses operate below capacity?

A

Lower than expected market demand
A loss of market share
Seasonal variations in demand
Recent increase in capacity

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15
Q

Drawbacks of high capacity

A

Less time for repairs
Stress for employees
Customer service may deteriorate
A business is less likely to be able to respond to sudden or unexpected increases in demand

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16
Q

How to increase capacity

A

Increase workforce hours
Sub-contracts some production activities
Reduce time spent maintaining production equipment

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17
Q

Labour Productivity

A

Measures the amount or value of output per employee

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18
Q

What influences labour productivity?

A

Quality of the assets
Method of production organisation
Workforce is trained
Reliability of suppliers
Motivation

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19
Q

Issues with trying to improve labour productivity

A

Potential ‘trade-off’ with quality
Potential for employee resistance
Employees may demand high pay for their improved productivity

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20
Q

How to improve labour productivity

A

Measure performance and set targets
Streamline production processes
Invest in capital equipment
Invest in employee training
Improve working conditions

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21
Q

Unit Costs

A

The average cost per unit produced as measured over a particular time period

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22
Q

Economies of scale

A

The effect of unit costs falling as output rises

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23
Q

Labour intensive

A

Has a relatively high proportion of it costs related to the employment of people

24
Q

Benefits of Labour intensive

A

Unit costs may still be low in low wage locations
Labour is a flexible resource through multi skilling and training
Labour at the heart of the production process

25
Q

Drawbacks of Labour intensive

A

Greater risk of problems with employee/employer relationship
Potentially high costs of labour turnover
Need for continuous investment in training

26
Q

Capital intensive

A

Relatively low labour costs, but high costs arising from the extensive use of equipment

27
Q

Benefits of Capital intensive

A

Greater opportunities for economies of scale
Potential for significantly better productivity
Better equality and speed
Lower labour costs

28
Q

Drawbacks of Capital intensive

A

Significant investment
Potential for loss

29
Q

Mass Customisation

A

An approach to production in mass to achieve lower unit costs with customisation

30
Q

Quality

A

Meeting the needs and expectations of customers

31
Q

What would quality look like to a consumer?

A

Good design
Reliability
Durable
Value for money
Good functionality

32
Q

Costs of poor quality

A

Product fails
Product delivered late
Unresponsive customer service

32
Q

Why is Quality important?

A

Unique selling point
Brand image
Brand loyalty

33
Q

Quality Control

A

The process of inspecting products to ensure that they meet the required quality standards

34
Q

Advantages of Quality Control

A

It can help to prevent faulty goods and services being sold
Not disruptive to production
Improved reputation for quality

35
Q

Disadvantages of Quality Control

A

It does not prevent waste of resources
Does not encourage all workers to be responsible for quality
Process of inspecting goods or services costs money

36
Q

Quality Assurance

A

The processes that ensure production quality meets the requirements of customers

37
Q

Advantages of Quality Assurance

A

Ensures product is not faulty
Stops customer complaints/gives better customer satisfaction

38
Q

Disadvantages of Quality Assurance

A

Time consuming
Costs a lot of money to train staff
Time consuming to train staff

39
Q

What are inventories?

A

Finished goods held by a firm to enable production and meet customer demand

40
Q

Why do businesses hold stock?

A

Meet demand
Allow for seasonal changes
Allow efficient production
Enable production to take place

41
Q

Influences on holding inventory

A

Need to satisfy demand
Need to manage working capital
Risk of inventory losing value
Costs of holding inventory

42
Q

Costs of holding inventory

A

Cost of storage
Interest costs
Obsolete costs
Stock out costs

43
Q

Maximum level

A

Max level of inventory

44
Q

Re-order level

A

Acts as a trigger point

45
Q

Lead time

A

Amount of time between placing and receiving the inventory

46
Q

Minimum level

A

Minimum level of inventory

47
Q

Buffer stock

A

An amount of inventory held as a contingency in case of unexpected offers

48
Q

Lean Production

A

An approach to minimise waste

49
Q

What waste would a business try to reduce?

A

Over- production
Waiting time
Transport
Defects
Stocks

50
Q

Kaizen

A

Change for the better of continuous improvement

51
Q

Just in Time

A

Products arrived when they are needed

52
Q

Advantages of Just in Time

A

Reduces stock holding space
Less working capital is tied up in stock
Less likelihood of stock perishing
Less time spent on checking and re-working

53
Q

Why are supplies important?

A

Closely linked to product quality
Costs
Good relationship

54
Q

Disadvantages of Just in Time

A

Need for complex specialist stock systems
Little room for mistakes as minimal stock is kept for re-working faulty products
Highly reliant on suppliers

55
Q

Characteristics of effective suppliers

A

Price
Quality
Reliability
Communication
Financially secure
Capacity

Business AS Flashcards :) (5 decks)

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