Operations Management Flashcards
(33 cards)
What is operations management?
Operations management involves planning, organising, and overseeing production processes to ensure goods and services are produced efficiently, meet quality standards, and satisfy customer demand.
What are the main objectives of operations management?
Objectives include efficiency, quality, flexibility, speed of response, dependability, and cost control. These support overall business performance and customer satisfaction.
What is productivity and how is it measured?
Productivity measures output per unit of input. It is calculated as: Productivity = Output ÷ Input. Higher productivity improves efficiency and profitability.
What is the difference between labour-intensive and capital-intensive production?
Labour-intensive production relies more on human effort, while capital-intensive production uses more machinery and automation. Each has cost, flexibility, and quality implications.
What is capacity utilisation and how is it calculated?
Capacity utilisation measures how much of a firm’s productive capacity is being used. Formula: (Actual Output ÷ Maximum Possible Output) × 100.
Why is high capacity utilisation important?
High utilisation spreads fixed costs, increases efficiency, and improves profitability. However, operating close to 100% can reduce flexibility and lead to quality issues or delays.
What are the consequences of under-utilisation of capacity?
Under-utilisation leads to higher unit costs, wasted resources, and reduced profitability. It may indicate poor demand or over-investment in production capacity.
What methods can be used to improve capacity utilisation?
Firms can increase marketing, offer discounts, subcontract work, or rationalise production (e.g., closing underused facilities).
What is lean production?
Lean production aims to minimise waste and maximise efficiency. Techniques include just-in-time (JIT), Kaizen (continuous improvement), and cell production.
What is just-in-time (JIT) production?
JIT minimises inventory by producing goods only when needed. It reduces storage costs and waste but relies heavily on reliable suppliers and smooth workflow.
What is quality assurance?
Quality assurance focuses on preventing defects by embedding quality into the process. It involves staff training, process design, and systematic checking throughout production.
What are the benefits of maintaining high quality standards?
High quality improves customer satisfaction, reduces returns and complaints, enhances brand image, and can justify premium pricing.
What is the difference between quality control and quality assurance?
Quality control checks final products for defects, while quality assurance embeds quality into the process to prevent defects. QA is proactive; QC is reactive.
What is the role of technology in operations management?
Technology increases efficiency, accuracy, and flexibility. It includes robotics, automation, CAD/CAM systems, and data analytics to streamline operations.
What factors influence the location of production?
Factors include proximity to suppliers/customers, transport links, labour availability, costs, infrastructure, and government support.
Evaluate the impact of high capacity utilisation on business flexibility.
While high utilisation improves cost efficiency, it reduces flexibility. Firms may struggle to meet sudden demand spikes or adapt to product changes. Overuse may lead to equipment strain, errors, and lower quality.
Analyse the advantages and risks of adopting just-in-time (JIT) production.
JIT reduces storage costs, waste, and improves cash flow. However, it increases vulnerability to supply chain disruption and limits buffer stock. It requires reliable suppliers, staff discipline, and robust systems.
To what extent can quality assurance improve long-term competitiveness?
QA ensures consistent product quality, reducing defects and enhancing brand trust. Over time, it builds loyalty and market differentiation. However, it may raise training costs and depend on a quality-focused culture.
Assess the strategic role of lean production in a competitive market.
Lean improves efficiency, cuts waste, and reduces costs, supporting price competitiveness. It also fosters a culture of continuous improvement. But implementation is complex, requiring cultural change, staff buy-in, and consistent review.
How can technology transform operations management?
Technology automates tasks, increases accuracy, and enables data-driven decisions. CAD/CAM boosts design precision, while ERP systems integrate workflows. High investment cost and training needs may delay returns, especially for SMEs.
Discuss how location decisions affect business performance.
Location impacts costs, customer access, supply chain, and labour availability. Poor location increases transport or recruitment challenges. Strategic location supports branding (e.g., premium outlets) and growth potential.
What are the implications of poor quality control for a business?
Poor quality leads to waste, rework, refunds, and reputational damage. It increases costs and customer churn. Continuous failures may lead to regulatory issues or loss of contracts, particularly in sensitive industries.
Explain how operations management supports overall business strategy.
Operations deliver products efficiently and reliably, affecting customer satisfaction, cost structure, and scalability. Aligning operations with strategy ensures competitive advantage and sustainable growth.
What is the role of stock (inventory) management in operations?
Stock management ensures the right quantity of raw materials, work-in-progress, and finished goods are available. Effective control prevents stockouts, reduces holding costs, and improves cash flow.
