Operations Management Flashcards

Question

3 Advantages and 3 Disadvantage of Online Services- Technology advancement strategies

Answer 1

Advantages: -Consistent messaging to customers and suppliers while gaining customer feedback. -Accessible 24/7 for sales, bookings, or communication purposes. -Reduces labor costs and eliminates the need for physical space. Disadvantages: -Initial setup (designing, registering, publishing) can be expensive and time-consuming. -Outages or downtime can frustrate customers and harm reputation/sales. -Requires skilled staff to operate websites/apps, which can be costly.

Answer 2

Forecasting is a materials planning tool that relies on data from the past and present, and analysis of trends, to attempt to determine future levels of demand. The operations area uses forecasting to predict the quantity and timing of demand for its goods or services, then matches supply with demand to estimate what materials are needed and in what quantities.

Answer 3

Impact on efficiency: Reduces overproduction or underproduction risks, Optimizes resource allocation across labour, materials, and machinery. Impact on effectiveness: Increases customer satisfaction through timely order fulfillment, builds resilience against supply chain disruptions by enabling proactive adjustments.

Answer 4

Advantages: 1.Prevents Overstocking: By forecasting material needs, the business avoids having too much inventory. This saves money, reduces the risk of products being stolen, damaged, or spoiled, and ensures stock doesn’t become outdated or unusable. 2.Prevents Stockouts: Accurate forecasting helps the business avoid running out of materials, which means production can continue smoothly. This helps keep customers happy and prevents losing sales or market share to competitors. Disadvantages: 1.Forecasting Isn’t Perfect: Predictions about future demand are always somewhat uncertain. Even the best forecasts are part guesswork, so mistakes can happen. 2.Past Data May Not Predict the Future: Relying on historical sales or usage data doesn’t guarantee the same patterns will continue. Unexpected events or changes in the market can make forecasts inaccurate.

Answer 5

A Master Production Schedule is a plan that outlines what is to be produced, the quantities of each product, and when and where production will occur. The MPS provides clear direction so that materials can be planned and ordered to meet production needs.

Answer 6

Impact on efficiency: Avoids out-of-stock while maintaining high production rates, enhances resource utilization and reduces scheduling errors Impact on effectiveness: Enhances operational reliability by reducing disruptions, ensures that high-demand products are available when needed, improving customer trust.

Answer 7

MPS advantages: * Improves planning and efficiency: Helps businesses organise their operations in advance and avoid overproduction. * Reduces waste: By knowing exactly what is needed and when, businesses can minimise excess materials and storage. * Enhances customer satisfaction: Clear production timelines help meet delivery deadlines consistently. MPS Disadvantages: * Time-consuming to create and maintain: Developing a detailed schedule requires time, forecasting, and constant updates. * Lacks flexibility: If customer demand changes suddenly, the plan may not adapt quickly. *High initial setup costs: Software and training for MPS can be expensive for small businesses.

Answer 8

Materials Requirement Planning (MRP) is a materials management strategy that involves developing a detailed list of all the materials and components required for production, including the exact quantities and timing of when they are needed. This ensures the right amount of materials are ordered and received in time for production, supporting a continuous flow and minimizing waste

Answer 9

Impact on efficiency: Reduces lead times and material shortages, minimizes waste by aligning material procurement with production schedules Impact on effectiveness: Reduces production downtime caused by material shortages, improves product availability and delivery reliability.

Answer 10

MRP Advantages: *Ensures material availability: Helps avoid delays by ensuring all necessary materials are available when needed. *Reduces inventory costs: Materials are ordered just when they are required — avoiding overstocking. *Improves cash flow: Money isn’t tied up in unnecessary inventory. MRP Disadvantages: * Highly dependent on accurate data: Errors in inventory records or demand forecasts can cause major disruptions. * Software and system costs: MRP requires specialised systems, which can be expensive to install and maintain. * Complex to manage: Requires skilled staff and consistent monitoring for effectiveness.

Answer 11

Just in Time is a strategy where the right amount of materials arrives just as they are needed for production. This means the business keeps the absolute minimum amount of materials on hand, resulting in very small amounts of idle stock. Materials are quickly put into production, reducing storage needs and minimizing waste from perishing or damage.

Answer 12

✅ Similarities between MPS and MRP: *Both MPS and MRP are production planning tools designed to ensure the production process runs smoothly by planning ahead for what is needed and when, reducing delays and downtime. *Both strategies aim to improve operational efficiency and effectiveness by helping a business minimise waste, avoid overproduction or stock shortages, and better meet customer demands. 🔁 Differences between MPS and MRP: MPS outlines what finished goods are to be produced, in what quantities, and when, whereas MRP outlines what materials and components are needed and when they must be ordered. MPS relies on data such as customer demand, delivery schedules and production capacity, while MRP depends on the MPS, stock-on-hand levels, supplier lead times, and purchasing procedures.

Answer 13

Impact on efficiency: Reduces storage costs by minimizing inventory levels, Increases operational agility in responding to demand fluctuations Impact on effectiveness: Boosts customer satisfaction by delivering high-quality products on time, increases flexibility to respond to market shifts or unexpected demand spikes.

Answer 14

Advantages: 1.Increase competitiveness by ensuring that production can continue to flow smoothly with the right amount of materials arriving just as they are needed 2.Reduce risk of any waste occurring during storage 3.Reduce storage costs Disadvantages: 1.Can increase transportation costs as orders are arriving in smaller quantities more regularly 2.Supplier must be reliable and materials must be received at the right time otherwise will resulting in huge costs for business  halting the production

Answer 15

Quality management refers to the processes and strategies that a business uses to ensure that its goods or services consistently meet a defined standard.

Answer 16

Key Aspects: 1.Meeting customer expectations 2.Continuous Improvements 3.Minimising waste and defects 4.Implementing strategies and processes (QC, QA, TQC)

Answer 17

Involves checking the quality of outputs at various stages of production through inspections and testing.

Answer 18

Advantages: 1.Helps identify defects before products reach customers. 2.Can reduce costs associated with customer complaints and returns. Disadvantages: 1.Reactive approach – defects are only identified after they occur. 2.Time-consuming and labour-intensive if checks are frequent.

Answer 19

Improve efficiency: ◦Identifies and fixes defects early, so businesses don’t waste resources producing faulty products. ◦Reduces the cost of recalling or reworking large amounts of products. Improve effectiveness: ◦Ensures customers receive high-standard products, improving customer satisfaction and helping meet sales and quality objectives.

Answer 20

Involves the use of an external audit, which uses a proactive approach that focuses on preventing defects through established processes and standards, often certified (e.g., ISO standards).

Answer 21

The ISO provides guidelines on how businesses should establish quality assurance systems by adopting specific procedures and controls, and recording and documentation measures. A quality system gives assurance to customers that the business is able to provide safe and reliable products.

Answer 22

Advantages: 1.Builds a strong reputation for quality, which can attract customers. 2.Reduces the chance of defects occurring in the first place. 3.May help gain international recognition through certifications. Disadvantages: 1.Can be costly to set up and maintain paying external body 2.Time-consuming to train staff and document processes.

Answer 23

Improve efficiency: ◦Minimizes mistakes happening in the first place, reducing waste and rework. ◦Creates streamlined, standardized processes that save time and resources. Improve effectiveness: ◦Builds a reputation for quality, leading to more customer trust and potentially higher sales. ◦Helps businesses achieve objectives like improving market share or brand image.

Answer 24

A all-inclusive approach involving all employees in a culture of continuous improvement of outputs with a focus on all aspects on business operations and Customer satisfaction

Answer 25

Advantages: 1.Empowers employees by involving them in decision-making and problem-solving. 2.Focuses on continuous improvement, which can lead to long-term efficiency gains. Disadvantages: 1.Requires a cultural shift, which can take time and strong leadership. 2.Can be difficult to maintain consistent participation across all levels.

Answer 26

Improve efficiency: ◦Everyone working to improve processes leads to less wastage, faster production, and fewer errors. ◦Promotes innovation and employee problem-solving to boost productivity. Improve effectiveness: ◦Focus on continuous improvement and customer focus ensures customer needs are met or exceeded, helping achieve objectives like increased customer satisfaction and loyalty.

Answer 27

Similarities between QC and QA: ◦That both aim to ensure a business’s products meet quality standards and customer expectations. ◦Both are systematic approaches aimed at ensuring customers receive quality products/services. Differences between QC and QA: ◦QA focuses on processes — preventing defects during production. Whereas QC focuses on products — detecting and removing defects after production. ◦QA is proactive — happens before and during production. Whereas QC is reactive — happens after production is complete.

Answer 28

◦It is the process that involved reducing the amount of unwanted and unusable resources created by the business’s production process to improve efficiency and effectiveness of operations.

Answer 29

Reduce strategy: Cutting down on the number of materials, energy, or resources a business uses during production. Ways businesses can reduce the amount of waste they generate: ◦Just in Time system ◦Quality management systems ◦Robotics or automated production lines

Answer 30

Advantage: ◦Lowers production costs by using fewer resources. ◦Enhances the business’s corporate social responsibility (CSR) image, attracting environmentally conscious customers. Disadvantage: ◦May require expensive investment in new technology to be more resource efficient. ◦Can disrupt production if processes need to be redesigned or scaled down.

Answer 31

Improve efficiency: ◦Using fewer materials and resources reduces wastage and lowers costs. ◦Production becomes quicker because processes are streamlined with only necessary inputs. Improve effectiveness: ◦Helps achieve business objectives like improving profit margins and meeting CSR goals (corporate social responsibility). ◦Builds a stronger brand reputation, helping the business meet objectives like attracting more customers.

Answer 32

Using items or materials more than once, either for the same or a different purpose.

Answer 33

Advantage: ◦Saves money by reusing materials instead of buying new inputs. ◦ Reduces environmental impact, boosting the business’s public image and customer loyalty. Disadvantage: ◦Reused materials may not meet original quality standards, risking customer dissatisfaction. ◦Reuse systems (like collecting packaging) can be complex and costly to implement and manage.

Answer 34

Improve efficiency: ◦Reduces the need to purchase and prepare new materials, saving time and money. ◦Lowers operational costs because fewer raw materials need to be sourced. Improve effectiveness: ◦Enhances customer satisfaction and loyalty by demonstrating environmental responsibility, helping meet objectives like increasing sales. ◦Supports CSR objectives by reducing environmental footprint, improving the business's public image.

Answer 35

Processing waste into new materials or products instead of throwing it away.

Answer 36

Advantage: ◦Turns waste into valuable inputs, reducing landfill and sourcing costs. ◦Strengthens the brand’s CSR reputation, which can be a marketing advantage. Disadvantage: ◦Recycling processes can be expensive and require specialised equipment. ◦Not all materials are easily recyclable, limiting effectiveness and adding sorting costs.

Answer 37

Improve efficiency: ◦Reduces waste disposal costs — businesses can repurpose waste rather than paying to remove it. ◦Can create new products from waste, maximising resource use. Improve effectiveness: ◦Shows commitment to sustainability, helping achieve CSR goals and enhancing public trust. ◦Can create new revenue streams (e.g., selling recycled products), helping achieve financial objectives like increasing revenue.

Answer 38

Lean Management is an approach to operations management that attempts to improve efficiency and effectiveness by eliminating waste and improving quality. How would a business use lean management: ◦A business using this approach would carefully analyse each stage of the operations system and remove any inefficiencies that do not add value to the product.

Answer 39

Pull: ◦This relates to avoiding overproduction and stockpiling. Takt: ◦This refers to the rate of production needed to meet customer demand One piece flow: ◦This largely relates to eliminating waiting time or idle time. Zero defects: ◦This is all about the business striving for perfection.

Answer 40

Advantages of lean management: ◦Reduces waste and operational costs ◦Increases productivity and efficiency ◦Improves product quality Disadvantages of lean management: ◦Resistance to change from employees ◦Requires a strong, ongoing cultural shift ◦May not suit all business types or industries

Answer 41

Improve efficiency: ◦Reduces the amount of waste produced while working towards achieving objectives productivity increases Improve effectiveness: ◦By eliminating waste, it reduces costs that may lead to an improvement in profit ◦Can lead to increased customer satisfaction (zero defects, pull and takt), which can result in increased sales and, subsequently, an improvement in market share

Answer 42

It is the obligation that a business has over and above its legal responsibilities to the well-being of its stakeholders as well as the environment.

Answer 43

Examples: Using renewable energy to power machinery Choosing suppliers that pay fair wages Buying recycled or biodegradable materials Why it matters: ✔ Reduces environmental harm ✔ Supports ethical supply chains ✔ Enhances brand image

Answer 44

◦Use environmentally sustainable materials (e.g. recyclable or renewable resources) ◦Purchase green energy or invest in energy-efficient equipment ◦Source inputs from local suppliers to reduce transport emissions and support local jobs ◦Ensure suppliers are socially responsible (e.g. no exploitation, safe working conditions) ◦Use minimal and eco-friendly packaging materials

Answer 45

◦Use technology and facilities that support employee health and wellbeing (beyond legal minimum) ◦Ensure safe, fair, and supportive working conditions for all staff ◦Offer ongoing training and fair compensation (above legislative requirements) ◦Minimise waste generated during production ◦Implement recycling or remanufacturing of materials or waste ◦Make ethical decisions regarding waste disposal

Answer 46

◦Ensure products are safe, reliable, and fit for purpose ◦Create products that offer genuine value to society ◦Use biodegradable or recyclable packaging ◦Minimise environmental impact during distribution (e.g. transport emissions) ◦Produce goods locally to support the community and reduce carbon footprint

Answer 47

Global sourcing of inputs refers to purchasing and importing inputs for a good from overseas as opposed to using products that have been manufactured in Australia.

Answer 48

Advantages: ◦Access to cheaper raw materials or labour ◦Access to higher-quality resources not available locally ◦Increases efficiency and productivity Disadvanatges: ◦Delivery delays due to transport or global issues ◦Quality control may be more difficult ◦CSR issues if suppliers use unethical practices

Answer 49

It is also referred to as offshoring, meaning a good is produced in a country that is different to the location of the business’s headquarters.

Answer 50

Advanatges: *Lower production costs due to cheaper labour *Faster production in specialised factories *Frees up local resources for other business activities *Can help increase profit margins Disadvantages: *Job losses in the local economy *Quality issues may arise if production is not properly monitored *Cultural and language barriers *Potential for negative brand image due to poor labour standards *Slower response to market changes

Answer 51

Outsourcing means that some parts of a business’s operations is transferred to an external person or business. such as accounting or customer service, are moved to another business

Answer 52

Advantages: *Allows focus on core business activities *Reduced costs (especially labour) *Access to expertise and technology *Increases flexibility and efficiency Disadvantages: *Loss of control over outsourced functions *Communication or language barriers *Potential for security and privacy risks *CSR concerns if the outsourcing partner mistreats staff

Operations Management Flashcards

(77 cards)