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Operations Management Flashcards

(93 cards)

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1
Q
A
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2
Q

Define operations management?

A

The method used by a business to create products and services

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3
Q

Define added value

A

Involves enhancing the gap between the production cost and selling price

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4
Q

Define production

A

Defined as the total amount of output produced in a specific time period

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5
Q

Define productivity

A

Defined as the output per input of a person or machine per hour

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6
Q

Define capacity utilisation

A

It measures the proportion of current output compared with the maximum possible output in a given period of time

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7
Q

Define economies of scale

A

The savings in costs a business can make by expanding its level of production therefore lowering costs

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8
Q

Define lean production

A

Aims to minimise costs and enhance quality by using a range of waste reducing measures

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9
Q

What is the formula for added value?

A

Added value = selling price - cost of product

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10
Q

What are three ways of adding value?

A

Purchasing cheaper raw materials
Improving efficiency
Raising the price of the product
Improving customer convenience
Offering additional services
Achieving brand status for a product

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11
Q

What are two benefits of added value?

A

Being able to charge higher prices
Acting as a USP

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12
Q

What are the drawbacks of added value?

A

Higher prices create higher expectations
Investment and time is needed to add value

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13
Q

What is job production?

A

It involves the production of a single product at a time
These products meet the specific requirements of the customer eg. Wedding cake business

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14
Q

What are the benefits of job production?

A

Products meet the specific requirements of the customers
Very flexible for the customer
Business can often charge higher prices

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15
Q

What are the drawbacks of job production?

A

Very expensive
Very labour intensive
The workforce will often need specialist skilled workers who may be harder to find and would be paid more

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16
Q

What is batch production?

A

When the business creates a group of items at once and each group undergoes one stage of the process before being moved on to the next

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17
Q

What are the benefits of batch production?

A

it can reduce the cost of production
often used in manufacturing

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18
Q

what are the drawbacks of batch production?

A

it can require large amounts of machinery and equipment
if a machine stops working it can stop production completely
an error in production will effect an entire batch

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19
Q

what is flow production?

A

where large quantities of a standardised product are produced by a semi skilled workforce

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20
Q

what are the benefits of flow production?

A

make it cheaper to produce each product
beneficial when businesses are selling to mass markets

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21
Q

what are the drawbacks of flow production?

A

it requires large amounts of machinery which will take up space and have high set up costs
high running costs
each product produced is the same/ similar
if the machine stops it will end production

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22
Q

what factors do the type of production depend on?

A

the product itself
the cost of labour
cost of capital
skills of labour
customer requirements
size of target market

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23
Q

define efficiency?

A

to do with how well resources such as raw materials labour and capital can be used to produce a product

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24
Q

define productivity?

A

it is a measurement of the efficiency with which a business turns production inputs into outputs

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25
formula for labour productivity?
output / number of employees
26
define capitial productivity?
refers to the total volume of output produced from a given volume of resources
27
whats the formula for capital productivity?
output/ capital employed
28
what are some ways on how productivity can be increased?
increase investment in modern equipment trian employees improve employee motivation workplace reorganisation
29
what are the advantages of high productivity?
increased competitiveness lower unit costs economies of scale spreading of fixed costs over higher output
30
define capacity?
total output which could be produced with existing resources
31
define capacity utalisation?
the extent to which the maximum capacity of the firm is being used
32
what is the formula for capacity utalisaion?
current output/ maximum possible output X 100
33
whats the formula for adverage costs?
total costs/ output
34
define share capacity?
capacity that is designated to be used in part for the Devices, including components or parts, and in part for other purposes.
35
what are the issues with share capacity?
demotivates staff increased costs to the business reduced profits lack of return on investment capital
36
how can businesses solve space capacity?
they can subtract of production reduce capacity throughout through rationalisation increased the use of assets redeployment increasing sales
37
define full capacity?
when a business has a capacity utilisation of 100%
38
what are the benefits of full capacity?
adverage costs are minimised as fixed costs are spread over the maximum number of units employees may be more motivated the business is perceived as successful the business is making optimum use of the factors of production
39
what are the drawbacks of full capacity?
any further orders may need to be rejected possible fall in quality machine maintenance can be difficult puts pressure and stress on employees
40
define economies of scale?
the reduction of average costs in production that occur as a business increased its scale of production
41
what is internal economies of scale?
reduction of adverage or unit costs as a result of increasing internal efficiencies?
42
what are the internal economies of scale?
technological economies purchasing economies financial economies managerial economies marketing economies risk bearing economies
43
what are external economies of scale?
these are reductions in costs that benefit the whole industry not just the individual business
44
what are the external economies of scale?
supplier economies educational economies financial economies
45
what is diseconomies of scale?
it occurs when as a business expands in the long run the unit cost of production increases
46
what are internal diseconomies of scale?
coordination issues communication issues motivation issues
47
what are the external diseconomies of scale?
overcrowding in industrial areas increased price of resources
48
what is CAD
it is computer aided design which creates products on screen
49
what is CAM?
computer aided manufacture which is when computers are used to manufacture the product which is highly efficient fast and chap
50
how are robotics used in terms of technology?
machines undertake tasks that would be usually carried out by humans
51
what is information technology?
businesses use of websites apps and emails and digital media
52
what is automation technology ?
using robots to carry out repetitive tasks
53
what are the positive impacts of technology?
lower cost of production improved quality reduced waste improved productivity wider choice of products
54
what are the drawbacks of using technology?
resistence to change costly to impliment increase in the need for r and d customer expectations are quickly rising
55
define quality?
quality is about meeting the needs and expectations of customers
56
what is the importance of quality to the business?
there are marketing costs if the business has low quality like loss of sales and loss of reputation and may lead to the business having to reduce the price
57
what is traditional quality control?
the process of inspecting products to ensure they meet the required quality standards and it detects faulty goods but doesnt prevent them
58
what is quality assurance?
it seeks to guarantee all stages in the production process to ensure high quality final products and satisfied customers
59
what is total quality managment?
it is where all employees in a business contributing to and being responsible for ensuring quality at all stages of the production process
60
features of tqm?
quality chains empowerment monitoring teamwork quality circles zero defets benchmarking application of recognised standards
61
what are the benefits of using tqm?
focuses clearly on the needs of the customers achieves quality in all aspects of the business find improvements erors are developed easily develop a team approach
62
what are the limitations of using tqm?
there will be trianing and development costs it will only work if there is dedication from the whole organisation stress levels increase
63
define lean production ?
its aim is to reduce everything including factor space, materials, stocks, suppliers, labour, capital and time and as a result it should improve productivity
64
what is kiazen?
a production method where employees meet with mamangers to discuss the improvements of the workforce and how to carry out jobs more efferctively focuses on continuous improvement
65
what is just in time production?
when stock is delivered to arrive when its ready to be used striaght in the production process rather than ordering stock just in case
66
what is cell production?
when production is divided into smaller number of teams where employees are grouped together
67
what is time based managment?
it focuses on time as a key source and carrys out multiple tasks at once
68
what are the benefits of kaizen?
improvements are many small chnmages rather than radical ones small improvements are less likely to require major captital investment the ideas come from the exisiting workforce so they feel more valued and their opinion will be the most valuable it encourages workers to take ownership of work
69
what are the limitations of kaizen?
it requires complete employee and management involvement it can be very difficult to chnage a workforces mindset
70
what are the benefits of just in time ?
it improves cash flow reduces waste more factory space is allowed costs of stock holding is reduced links with suppliers are improved motivation increases
71
what are the drawbacks of jit?
production is relitant requires good relationship with supplier advantages of bulk buying may be lost difficult to react to a sharp increase in demand possible loss of reputation pollution and conjection risk
72
what are the benefits of cell production?
it should improve communication workers become multi skilled and more adaptable greater work motivation
73
what are the drawbacks of cell production?
company culture has to encourage trust and participation company may have to invest in new materials some small scale production lines may yeild trianing is needed
74
what are the benefits of time based management?
quicker response times faster new product development reduction in waste
75
what are the drawbacks of time based managment?
requires flexible and multiskilled staff
76
define purchasing?
is the buying of materials componants fuel machinery and services by the business
77
what is the role of the purchasing department?
ordering the correct amount of stock at a competitive price ensure stock rotation price paid for stock is as competitive as possible ensure stocks are delivered at the right time
78
benefits of the purchasing department
ensure the purchasing of of quality goods and materials prevent stock cut outs make sure too much stock isnt being purchased economies of scale advantages
79
define stock control?
stock control is the management of raw materials in a business
80
what are the costs in holding too much stock?
increased warehouse space needed higher insurance costs higher security costs stock may be damaged money spent buying stocks could have been used more efficiently in other areas
81
costs associating with stock out
loss of production potenetial loss of sales harm the reputation of the business
82
what are the advantages of effective stock management
reduction of working capital there is an opportunity cost of holding stock improved relationships with customers freeing of storage space less stock wastage and discounting
83
what is stock taking?
it is a process of checking the level of stock in a business by counting whats on the shelves
84
what is the maximum stock level?
the maximum level of stock the business would wish to hold
85
what is the re order level?
when stock falls to this point another order should be placed
86
what is the lead time?
the amount of time between placing an order and receiving the stock
87
what is the minimum stock level?
the minimum amount of product the business would want to hold
88
what is buffer stock?
the amount of stock held as a contingency in case of unexpected orders
89
what is research in terms of research and development?
it is the investigation and discovery of new ideas in order to solve a problem
90
what is development in terms of research and development?
it involves changing ideas into products materials systems and procesess
91
what are the stages in product development?
identify probelms research development of ideas and solustions to solve the problems development of prototypes final design testing manufacture and launch
92
what are the benefits of r and d?
competetive advantage improved working enviornment image motivation consumer benefits preminum pricing
93
what are the problems with r and d?
its a very lengthy process

Business Conponant 1 (9 decks)

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