operational decisions- increasing effiency and productivity Flashcards Preview

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Flashcards in operational decisions- increasing effiency and productivity Deck (18):
1

what's efficiency?

this means using resources effectively. unit costs is a key way of measuring efficiency

2

define labour productivity

measures the amount of goods produced in relation to the number of employees

3

what's lean production?

the adoption of operational techniques that reduce waste

4

what is just in time? (JIT)

a method of minimising the amount of stock held by a business

5

what's kaizen?

improving efficiency by making a small but continuous improvements to operational processes

6

what's labour intensive?

when operations process uses a high proportion of labour in production compared to the amount of capital equipment used

7

what's capital intensive?

when operations process uses a high proportion of capital equipment in production compared to the amount of labour used

8

2 ways how you can improve capacity utilisation when capacity is low?

- boost sales by changing aspects of the marketing mix
- reduce capacity permanently (rationalisation/downsizing) if it is a long term problem

9

2 ways in which a firm could improve capacity utilisation if capacity is high?

- outsource production to other firms to meet demand
- reduce demand by changing elements of the marketing mix

10

2 ways which increasing labour productivity can improve efficiency

- investing in machinery and equipment including technology
- training workers so they have the skills required to do their job

11

2 problems of increasing labour productivity

- employees may demand higher pay as reward for their higher output
- output per worker may increase but it may be done in a wasteful manner so overall efficiency may not improve

12

what are the 3 factors which will affect a business's choice of whether they will be capital or labour intensive?

- the size of the firm- large firms more capital intensive (economies of scale)
- type of product- large quantities (capital) one off specialist products (labour)
- finance available to them- finance available (capital)

13

what are the 4 components involved in lean production?

- quality (total quality management)
- time based management
- just in time (JIT)
- kaizen

14

3 characteristics of just in time (JIT)

- customer focus- reacts to consumer demand rather than on pushing product out to the market
- suppliers are part of the system so a partnership approach to suppliers is essential
- significantly reduces all 3 types of stock freeing up storage and production space

15

3 advantages of JIT systems

- less money tied up in stock so cash flow is better
- close links with suppliers; seen as partners
- less chance of having out of date stock; waste is reduced

16

3 disadvantages of JIT systems

- vulnerable to supply problems
- loss of custom if deliveries are late
- higher delivery charges

17

what are the 6 ways in which new technology is used in business

- automation- replacing workers with machines
- robotics- science of using machines in production
- 3D printing/ additive manufacturing
- computer aided design- designers use computer modelling to develop new ideas
- computer aided manufacture- computers to operate machinery
- computer aided process planning- computers to identify the most efficient ways to manufacture products

18

define capacity

maximum output a business can produce with its current resources