Operations Flashcards
(23 cards)
Productivity
the output measured against the inputs used to create it
Buffer inventory
the inventory held to deal with uncertainty in customer demand and deliveries of supplies
Kaizen
continuous improvement through the elimination of waste
Lean production
techniques used by businesses to cut down on waste and therefore increase efficiency
Just in time
reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the finished product
Job production
where a single product is made at a time
Batch production
where a quantity of one product is made, then a quantity of another item will be produced
Flow / mass production
where large quantities of a product are produced in a continuous process
Fixed costs
costs which do not vary in the short run with the number of items sold or produced
Variable costs
are costs which vary directly with the number of items sold or produced
Total costs
fixed and variable costs combined
Average cost per unit
the total cost of production divided by total output
Break even level of output
the quantity that must be produced/sold for total revenue to equal total costs
Economies of scale
the factors that lead to a reduction in average costs as a business increases in size
Diseconomies of scale
the factors that lead to an increase in average costs as a business grows beyond a certain size
Break even charts
graphs which show how costs and revenues of a business change with sales
Revenue
quantity sold x
price
Break even point
fixed costs / (selling price - variable costs)
Margin of safety
the amount by which sales exceed the break-even point
Contribution
selling price - variable costs
Quality control
checking for quality at the end of the production process (less expensive, can lead to higher waste)
Quality assurance
checking for quality standards throughout the production process by employees (more expensive, less waste)
Total quality management
continuous improvement of products and processes by focusing on quality at each and every stage of production
