Topic 5 Key Terms Flashcards
(42 cards)
Factors of production
the resources needed to produce a good or service, namely land, labour, capital and enterprise.
Operations management (or production)
concerned with providing the right goods and services in the right quantities and at the right quality level in a cost-effective and timely manner
The production process (or the transformation process)
refers to the method of turning factor inputs into outputs by adding value in a cost-effective way.
Productivity
a measure of a firm’s operational efficiency level, calculating the rate at which inputs (factors of production) are transformed into outputs (good and services).
Sustainability
the practice of enabling production and consumption of goods and services for the people of today without compromising the needs of future generations.
Value added
occurs during the production process when the value of output is greater than the costs of production. Firms earn profit if value added exists in the production process.
Batch production
involves producing a set of identical products. Work on each batch is fully completed before production switches to another batch.
Capital intensive
the manufacturing or provision of a product relies heavily on machinery and equipment, such as automated production systems.
Flow production
a form of mass production that uses continuous and progressive processes, carried out in sequence.
When one task is completed, the next stage of production starts immediately.
Job production
involves the manufacturing of a unique product or one-off job. The job can be completed by one person (such as a tailor) or by a team of people (such as architects and engineers)
Mass production
the large-scale manufacturing of a homogeneous (standardized) product. Unit costs of production are relatively low when using mass production methods.
Mass customization
an operations method that uses flexible manufacturing systems to mass produce products that meet individual consumer needs and wants.
Labour intensive
means that production relies heavily on labour inputs, so the cost of labour accounts for the largest proportion of a firm’s overall production costs. It is most apparent in the provision of personalized services.
Standardization
means producing an identical or homogeneous product in large quantities, such as printing a particular magazine, book or newspaper.
Assisted areas (or enterprise zones)
regions identified by governments to experience relatively high unemployment and low incomes, so are in need of regeneration through financial assistance
Bulk-increasing or weight-gaining industries
involved with products that increase in weight during the production process, so need to be located near their customers in order to reduce costs.
Bulk-reducing or weight-losing industries
those that need to locate near the source of raw materials because they are heavier and hence more costly, to transport than the final product.
Clustering
means that a business locates near other organizations that operate in similar or complementary markets.
A footloose organization
a business that does not gain any cost-reducing advantages from locating in a particular location.
Hence, the firm can locate in almost any location.
Government incentives
financial enticements offered by the state to businesses to locate in a particular area or region, perhaps due to high unemployment
Industrial inertia
describes the reluctance to relocate due to the inconvenience of moving even when the competitive advantages for the location no longer existed.
Infrastructure
the term used to describe the transportation, communication and support networks in a certain area,
Insourcing
the use of an organization’s own people and resources to accomplish a certain function or task which would otherwise have been outsourced.
Location
refers to the geographical position of a business, i.e., where it is sited.
