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Operations Flashcards

(55 cards)

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1
Q

What is operations management?

A

uses resources to provide goods and services at the right cost and quantity

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2
Q

What is efficiency?

A

How low the cost per unit is

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3
Q

What is the formula for cost per unit?

A

total costs / total units produced

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4
Q

What are the operational objectives?

A

Quality, punctuality, speed of response, flexibility, dependability, environmental objectives, added value

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5
Q

What are the indicators of quality?

A

Customer satisfaction, customer complaints, level of product returns, scrap rate

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6
Q

Define punctuality in operational objectives.

A

Products arriving to customers on time

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7
Q

What does speed of response refer to?

A

Adjusting quickly and improving parts of their operation to stay competitive

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8
Q

What is meant by flexibility in operations?

A

Reacting to changes in the market

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9
Q

What does dependability mean in operational objectives?

A

So customers can rely on them

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10
Q

What are environmental objectives?

A

Consciousness of the impact they have on the planet and taking steps to reduce it

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11
Q

What is added value?

A

Increasing the worth of resources by modifying them

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12
Q

List internal factors affecting operational objectives.

A
  • Customer satisfaction
  • Human Resources
  • Finance (machinery, materials)
  • Resources available
  • Nature of the product
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13
Q

List external factors affecting operational objectives.

A
  • Competition
  • Market conditions
  • Incomes
  • Interest rates
  • Demographic factors
  • Environmental issues
  • Fair trade
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14
Q

How is labour productivity calculated?

A

output / number of workers

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15
Q

What is a benefit of high productivity?

A

Lower unit costs - higher efficiency

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16
Q

What can lead to high productivity?

A
  • Technology
  • New processes
  • Training
  • Motivation
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17
Q

What is the formula for capacity utilisation?

A

(current output / maximum output) x 100

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18
Q

List risks of operating at full capacity.

A
  • Mistakes in production affect everything produced
  • Cannot increase output if there’s higher demand
  • Unable to respond to changes in the market
  • Increased pressure from factors of production (higher likelihood of mistakes)
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19
Q

How can a business cope with extra demand if already at full capacity?

A
  • Employ more people
  • Invest in more advanced technology
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20
Q

What factors does capacity utilisation depend on?

A
  • Seasonality of output and demand
  • Level of demand
  • Flexibility
  • Implications of failure to meet demand
  • Opportunities for subcontracted/outsourced production
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21
Q

Define economies of scale.

A

Cost advantages reaped by companies when production becomes efficient

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22
Q

What are the types of economies of scale?

A
  • Purchasing
  • Technical
  • Specialisation
  • Managerial & administrative
  • Social & welfare
  • Financial
  • Research & development
  • Marketing
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23
Q

What are the benefits of size for a business?

Study These Flashcards
A
  • Economies of scale
  • Easier to reach more customers
  • Attract more investments
  • Increases the barrier to entry
  • Reduced risk of business failure
24
Q

What is diseconomies of scale?

Study These Flashcards
A

When a company grows to the extent that it starts to become inefficient

25
What is optimal production?
When growth leads to economies of scale
26
List factors affecting the mix of resources.
* Method of production * Skills and efficiency of the factors * Relative costs of labour and capital * Size of the business * Standardised or personalised goods for customers
27
What are the types of inventory?
Raw materials, finished product, semi-finished product/unfinished goods/works in progress
28
Why is holding stock necessary for businesses?
To be able to meet demand
29
What are the costs of holding stock?
Risk of perishability, security, warehouse space
30
What happens when a business runs out of stock?
It cannot satisfy customer needs
31
What is buffer stock?
Minimum stock a business wants to hold at any time
32
What factors determine buffer stock?
* Rate at which stock is used up * Warehouse space available * Nature of products * Reliability of suppliers
33
What is the maximum stock level?
The most that can be possibly held
34
What is the re-order level?
Number of units that are left to re-order
35
What is the re-order quantity?
Number of items ordered
36
What does lead time refer to?
Time between order being placed and stock being received
37
What are the types of stock control?
JIT (Just In Time), JIC (Just In Case)
38
What does JIT stand for?
Just In Time
39
What are some drawbacks of JIT?
* Workers and machinery laying idle * Lost orders and customers go elsewhere * Orders not being met * Loss of reputation
40
What are the benefits of outsourcing?
* Access to suppliers with greater capabilities and higher quality * Reduced costs if the supplier can use EOS * More flexible operations
41
What are some drawbacks of outsourcing?
* Risk that outsourced fails to meet quality/standards * Potential loss of expertise from business * No guarantee of lower costs
42
What factors are important when choosing effective suppliers?
* Prices/payment terms * Quality * Capacity * Reliability * Flexibility * Delivery (lead time) * Ethics & sustainability
43
What is a supply chain?
The network of sellers of raw materials, manufacturers, distributors, wholesalers, and retailers
44
What is supply chain management?
Organising these activities to create value for customers and profit for the business
45
What does quality identify?
Faults/errors and maintains consistency
46
How can quality be measured?
* Performance * Appearance * Availability * Delivery * Reliability * Price
47
What are the implications of poor quality?
* Increased waste * Lower revenue * Lost customers * Reduced market share
48
What is quality control?
Testing the finished product to ensure it meets requirements
49
What is quality assurance?
Based on the production processes and self-checking by workers
50
What is lean production?
Production based on time, waste, and cost-saving measures
51
Give examples of lean production.
* JIT * Quality groups * TQM (Total Quality Management) * Kaizen
52
What does Kaizen mean?
Continuous improvement
53
What are the benefits of lean production?
* Saves costs * Larger profit margins * Lower risk of mistakes being made
54
What is a drawback of lean production?
Unexpected spikes in customer demand may not be easily accommodated
55
What technologies are used to improve operations?
* CAD/CAM * EPOS (when barcodes are scanned; stock control)

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