Operations Management-decision Making

Question 1

What are squares represented as in decision trees?

Answer 1

Decision points

Question 2

What is a decision tree

Answer 2

They attempt to quantify the likely outcome of any decision taken using numbers to give a financial return and the probability of this occurrence

Question 3

What do circles represent in decision trees?

Answer 3

probability outcomes

Question 4

What are 3 other factors you need to consider?

Answer 4

Time scale of the options
Objectives of the business
Risk attitude of the decision makers

Question 5

What are 3 advantages of using decision trees?

Answer 5

Can quantify risk (know what % it actually could happen)
Makes us consider other options
Consider if it’s even worth doing

Question 6

What are 3 disadvantages of using decision trees?

Answer 6

Doesn’t give definitive answers- estimated risks
Doesn’t take into account company’s attitudes towards risk
Time lag

Question 7

What is critical path analysis?

Answer 7

a tool used to plan activities

breaks down a job into a number of tasks and looks at the dependency of them

Question 8

In a critical path, what does an arrow represent?

Answer 8

an activity-it requires time and/or resources

Question 9

In a critical path, what does a circle represent?

Answer 9

a node-represents start/end of an activity

Question 10

In a critical path, in a node, what does the left hand number represent?

Answer 10

The order of the activities

Question 11

In a critical path, in a node, what does the top right hand number represent?

Answer 11

Earliest start time

Question 12

In a critical path, how do you work out earliest start time?

Answer 12

earliest start time of one before+number under arrow

Question 13

In a critical path, what does the number in the node on the bottom right represent?

Answer 13

latest finishing time

Question 14

In a critical path, how do you work out latest finishing time?

Answer 14

latest finishing time of following activity-duration of that activity

Question 15

What is spare time also know as in a cpa?

Answer 15

float

Question 16

what are the 2 types of float in cpa?

Answer 16

free float and total float

Question 17

what is free float in cpa?

Answer 17

the individual activities with spare time

Question 18

what is total float in cpa?

Answer 18

whole spare time added together

Question 19

what are 3 advantages of cpa?

Answer 19

helps you decide and know which things are critical
helps you control cash flow-what you dont need to happen
helps with time management

Question 20

what are 3 disadvantages of cpa?

Answer 20

based on last years figures-estimates
exogenous shocks could occur-contingency planning
more complicated=less beneficial, waste of time?

Question 21

what are 3 examples of waste?

Answer 21

idle staff
waste of materials
damaged stock

Question 22

what are 3 methods of waste management?

Answer 22

just in time
kaizen
total quality management

Question 23

what is just in time?

Answer 23

a way of manufacturing and production where materials are delivered immediately before they are required in order to minimise storage costs

Question 24

what is kaizen?

Answer 24

continuous improvement

Question 25

what is total quality management?

Answer 25

system of management based on the principle that every member of staff must be committed to maintaining high standards of work in every aspect of a company's operations.

Question 26

what are 3 costs of waste management?

Answer 26

financial costs time issues- take time out of work/production extra resources- time and effort

Question 27

what is specialisation?

Answer 27

where a nation identifies industries in which is has an absolute or comparative advantage over rival nations and they concentrate on growing these industries so they can produce more of that.

Question 28

what is absolute advantage?

Answer 28

being able to produce a product using less given resources than another

Question 29

what is comparative advantage?

Answer 29

being able to produce a product at a lower opportunity cost

Question 30

what is backward innovation?

Answer 30

selling products that are further back to developing markets e.g selling iPhone 3 to India now

Question 31

what is a saturated market?

Answer 31

cannot sell anymore products because everyone who wants one has one

Question 32

what are 3 advantages to a business trading with comparative advantage?

Answer 32

building factories abroad means paying lower wages call centers in India - outsourcing buying from supliers

Question 33

what are 5 ways in which you can make a business more competitive?

Answer 33

``` improve efficiency lower prices growth-economies of scale off-shore and out source advertising ```