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BUSINESS > Operations UNIT > Flashcards

Operations UNIT Flashcards

1
Q

what is operation management

A

The use of resources – land, labor, and capital – to provide goods and services that will satisfy demands identified by the market research department

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2
Q

What is the aim of operation managers ?

4

A

Produce goods and services of the required quality in the required quantity at the time needed in the most cost effective
way.

The efficiency of production: Keep costs low – competitive advantage

Quality: Good or service must be suitable for the purpose intended

Flexibility: Need to adapt to new methods of working and new products

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3
Q

what is Added value and its factors?

A

the difference between the cost of purchasing raw materials and the price the finished goods are sold for.
Factors:
Design - of the product

Efficiency of input-resources are combined and managed

Impact of promotional strategy – whether it convinces consumers to pay more (and how much more) for the product.

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4
Q

What is production?

A

The process of taking resources (inputs) and changing them (adding value) into products (outputs) to make a profit

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5
Q

What is Productivity?

A

the ratio of outputs to inputs during production.

Labour/capital productivity

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6
Q

How to calculate Labour productivity ?

A

total output in a given time period / Total workers employed

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7
Q

How to calculate capital productivity ?

A

output / capital employed

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8
Q

How to calculate unit labour cost?

A

total wage costs / Output

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9
Q

How to raise productivity levels?

4

A
  • Improve the training of staff to raise skills levels
  • Purchase more technologically advanced equipment
  • Improve employee motivation
  • More efficient management
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10
Q

What is efficiency ?

A

Producing output at the highest ratio of output to input

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11
Q

What is effectiveness ?

A

Meeting the objectives of the enterprise by using inputs productively to meet customer’s needs.

→ It means meeting customers’ needs profitably.

=> It is about putting inputs to productive use to achieve the objectives of the business

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12
Q

What is labour intensity?

A

High level of labour input compared with capital equipment

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13
Q

What is Capital intensity?

A

production uses a high quantity of capital equipment

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14
Q

One ad/dis of Labour intensity?

A

Advantage : High quality product

Disadvantage : Difficult to increase labour productivity

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15
Q

One ad/dis of capital intensive ?

A

Advantage : Economies of scale

Disadvantages : High fixed costs, maintenance costs, technological changes causing equipment to be obsolete.

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16
Q

What is Operation planning?

A

Preparing input resources to supply products to meet expected demand.

17
Q

Which departments does operation needs to coordinate with? (3)

A

Finance department – cashflow
HR department – labour input
Marketing department – strategy

18
Q

Why is marketing link important?

A

Estimated/forecast market demand

19
Q

Marketing link: With accurate sales forecasts what is operation able to ? (5)

A
  1. Match output closely to the demand levels (no surplus)
  2. Keep stock levels to a minimum efficient level
  3. Reduce wastage of production (outdated products)
  4. Employ and keep appropriate number of staff
  5. Produce the right product ‘mix’ (range of products that are forecast to be demanded
20
Q

What is operational flexibility?

A

To be able to vary both the level of production and the range of products following changes in customer demand.

21
Q

How can operational flexibility be achieved ? (4) and what are its disadvantages ?

A
  1. Increase capacity by extending buildings and buying more equipment
    –> expensive option
  2. Hold high stocks
    can be damaged
    opportunity costs
    –-> capital tied up
  3. Flexible and adaptable labour force
    –> temporary, part-time contracts reduces fixed salary costs but may reduce worker motivation
  4. Flexible flow-line production equipment
    –> Mass customization
22
Q

What is process innovation ?

A

The use of a new or much improved production method or service delivery method

23
Q

Examples of process innovation ?

A
  1. Robots in manufacturing
  2. Faster machines to manufacture microchips for computer
  3. Computer tracking of stocks (barcodes and scanners)
  4. Using the Internet to track the exact location of deliveries/orders
24
Q

What is Job production ? Requirements (2)

A

Used in production of single, one-off, unique products designed for the customer

  1. Only one product at any time in being made.
  2. Product A has to be completed before starting on Product B
25
Q

Advantages of Job production (2)

A
  • Motivating – see the project from start to end

- Allows specialised products to be produced

26
Q

Disadvantages of Job production (3)

A
  • Expensive
  • Takes a long time for completion
  • Labour intensive and need to be highly skilled
27
Q

What is Batch production?

Requirements

A

Producing a limited number of identical products.

1.each item in the batch passes through one stage of production before passing on to the next stage.

28
Q

Advantages of batch production (3)

A
  • Division of labour
  • Economies of scale
  • Design of each batch can be altered
29
Q

Disadvantages of Batch production (2)

A
  • High levels of WIPs at each stage of production

- Boring (and demotivating)

30
Q

What is flow production?

Requirements (3)

A

Producing items in a continually moving process

  1. Individual products move from one stage to next as soon as they’re ready – no need to wait for the other products (unlike batch production)
  2. Large quantities produced in short time – suitable for industries with high and consistent demand with minimum alterations
  3. Needs to be carefully planned- cannot allow disruptions to the system.
31
Q

Advantages of Mass production (3)

A
  1. Labour costs low – mechanised, low physical handling of the products
  2. Constant output – stock levels input can be planned, controlled and minimised
  3. Quality remains high – easy to check and control
32
Q

Disadvantages of Mass production (2)

A
  1. High set up costs – machines are high tech – capital intensive
  2. Boring, demotivating and repetitive
33
Q

What is cell production and its requirements ?

A

→ Like mass production, but separated to a self-contained mini-production units à cells

Each cell responsible for quality and targets

34
Q

AD of cell production (3)

A
  1. Motivating and creates ‘friendly’ competition (amongst cells)
  2. Leads to worker commitment –> motivation –> productivity
  3. Leads to well trained, multi-skilled workforce
35
Q

Dis of cell production (2)

A
  1. Dependant on well trained, multi-skilled workforce

2. Only works if cell dynamics ‘gel’

36
Q

What is Mass customisation ? and its requirements (4)

A

The use of flexible, computer-aided production systems to produce items to meet individual customers’ requirements at mass-production cost levels

1.Latest technology + Multi skilled labour force = wide ranging products
2. Move away from mass production/identical products
Keep some aspects the 3. same, low unit costs, greater product choice
4. Higher added value

37
Q

How to choose which production method to use? (3)

A
  1. Size of market (market demand)
    a. For products adapted to specific customer requirements
    b. Cost advantage and different products for different market – mass customisation
  2. Amount of capital available
  3. Availability of other resources (Level of technology available)

BUSINESS (9 decks)

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