Unit 4 - Decision Making To Improve Operational Performance Flashcards
Define operations
Converts inputs to outputs
What decisions do operations management involve
-level of output
-Range of products
-level of customer service
-how to produce (capital intensive or labour intensive)
-how much done by business itself or suppliers
Define supply chain
The series of activities involved in turning the initial resources into th3 final product
What are cost objectives
- reducing unit costs
- reduced fixed costs
- reducing variable costs
What are quality objectives
◇ operations work with marketing to decide what customers want/ expect
◇ better quality operations mean more competitive
◇higher customer satisfaction
◇ lower product returns
◇ less waste
◇ punctuality (delivery)
What are the 3 steps of the operations process
Inputs -> transformation process -> outputs
Stages in the production process
◇ raw materials
◇ manufacturing
◇ transportation
◇ retail
◇ disposal/ recycling
What are 5 types of operations
- Gathering analysing and distribution of information
- Storing and transporting products
- Transforming people (e.g. doctors)
- Producing goods
- Bringing products and customers together
Internal influences on the operations process
◇ corporate objectives
◇ resources
◇ finance
◇ HR
◇ marketing
◇ nature of product
◇ leadership and culture
Speed of response objectives
. Can be competitive by providing goods quicker than competitors
. Is the time from when the order is placed to delivery
. Lead times
. Response time
. Pricing effects
What are flexibility objectives
. PRODUCT - ability to switch one product to another
. VOLUME - ability to change level of outut based on demand
. MIX - availability to provide a range of alternatives
. DELIVERY - ability to adapt to changes in volume.e and demand
What are dependability objectives
(Ablity of a business to deliver reliably and on time)
- quality
- punctuality
- durability
What’s the formula for added value
Selling price - cost of production
(Added to the selling price)
What are operational objectives?
Targets a business sets for production and operations such as cost efficiency, quality, and speed of response.
Examples of operational objectives?
Costs, quality, speed of response, flexibility, dependability, environmental objectives, added value.
Internal influences on operational objectives?
Corporate objectives, finance, HR capabilities, nature of the product, and operational resources.
External influences on operational objectives?
Technological change, competitor performance, economic environment, market conditions, legal changes.
What is capacity?
The maximum level of output a business can produce in a given period.
What is capacity utilisation?
The proportion of maximum output being used. Formula: (Actual Output / Maximum Possible Output) × 100
Why isn’t 100% capacity utilisation ideal?
May cause stress, maintenance delays, and lower quality.
What is labour productivity?
Output per worker. Formula: Total Output / Number of Employees
How can labour productivity be improved?
Training, investment in equipment, better motivation, streamlined operations.
What is efficiency?
Producing more output from the same or fewer inputs.
What is unit cost?
Average cost per unit produced. Formula: Total Costs / Units Produced
