Operations (Unit 4) Flashcards
(38 cards)
What are operational objectives?
Operational objectives are targets set for operations management, such as improving efficiency or reducing costs, which support the overall business strategy.
List the types of operational objectives. (6)
Cost, quality, speed of response, flexibility, environmental objectives, added value.
What is the formula for labour productivity?
Labour productivity = Output per time period ÷ Number of employees
What is the formula for unit costs (average costs)?
Unit cost = Total costs ÷ Units of output
What is the formula for capacity utilisation?
Capacity utilisation = (Actual output ÷ Maximum possible output) × 100
What is capacity in operational terms?
Capacity is the maximum level of output a business can produce in a given period with its current resources.
Why is efficiency important? (3 benefits)
Lowers unit costs.
Increases competitiveness.
Improves profit margins.
What are 3 difficulties in increasing efficiency and labour productivity?
Staff resistance to change.
Cost of training or new equipment.
Risk of lower quality or worker motivation.
What are the benefits of lean production? (2)
Reduced waste and costs.
Faster production with higher efficiency.
What are the drawbacks of lean production? (2)
Requires reliable suppliers.
Can cause delays if stock levels are too low.
What’s the difference between ‘Just in Time’ and ‘Just in Case’?
Just in Time (JIT): Inventory arrives when needed—lowers storage costs but risks stockouts.
Just in Case (JIC): Stock held in reserve—lower risk but higher storage costs.
What is Kaizen?
Kaizen is a Japanese term meaning “continuous improvement”. It involves making frequent, small improvements suggested by workers.
What are the advantages of Kaizen? (3)
Encourages staff involvement and motivation.
Continuous efficiency improvements without large capital outlay.
Helps reduce waste and improve productivity over time.
What are the disadvantages of Kaizen? (2)
Can be slow to show major improvements.
May cause resistance if employees prefer traditional methods or lack training.
What are the pros and cons of using capital-intensive production? (2+2)
Advantages:
High productivity.
Lower labour costs.
Disadvantages:
High initial investment.
Less flexibility than labour.
What is quality in business?
Quality is the extent to which a product meets customer expectations.
What is quality assurance?
Quality assurance is a proactive process where quality is built into every stage of production to prevent errors.
What is quality control?
Quality control is a reactive process where products are checked after production to identify faults.
What are the advantages of improving quality? (3)
Higher customer satisfaction and loyalty.
Lower costs due to fewer returns and rework.
Enables premium pricing and competitive advantage.
What are the disadvantages of improving quality? (3)
High initial costs for training or new systems.
Time-consuming process to implement.
May require cultural change in the business.
What are 2 consequences of poor quality?
Product returns or refunds.
Damage to brand reputation.
Define flexibility in operations.
Flexibility is the ability of a business to adapt its operations to meet changes in customer demand.
Define speed of response.
Speed of response is how quickly a business can meet customer orders.
Define dependability.
Dependability refers to a business’s ability to deliver products on time and as promised.
