Operations Management Flashcards
(23 cards)
productivity
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
lean production
technique used to cut down on waste and increase efficiency
kaizen
“continuous improvement”, through elimination of waste
Just-in-time
production method that involves reducing/virtually eliminating the need to hold inventories of raw materials/unsold inventories of the finished product
job production
single product is made at a time
batch production
quantity of one product is made, then a quantity of another item will be produced
flow/mass production
large quantities of a product are produced in a continuous process
fixed/overhead costs
cost that do not vary in the short run with the number of items sold/produced. have tombs paid whether the business is making any sales or not.
variable costs
costs which vary directly with the number of items sold/produced
total costs
fixed and variable costs combined
average cost per unit
the total cost of production divided by total output
economies of scale
factors that lead to a reduction in average costs as a business increases in size
diseconomies of scale
factors that lead to an increase in average costs as a business grows beyond a certain size
break-even point
the quantity that must be produced/sold for total revenue to equal total costs
break-even chart
graph that shows how cost and revenues of a business changes with sales. show the level of sales the business must make to break-even
margin of safety
the amount by which sales exceed the break-even point
contribution of a product
its selling price minus its variable costs
quality
means to produce a good/service which meets customer expectations
quality control
checking for quality at the end of the production process, uses quality inspectors as a way of finding any faults
quality assurance
checking for quality standards throughout the production process by employees
total quality management
continuous improvement of products and processes by focusing on quality at each and every stage of production
