Unit 4 - Operations Flashcards Preview

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Flashcards in Unit 4 - Operations Deck (28):
1

What acronym is used for what good objectives should be?

SMART

2

What is labour productivity?

The amount of output per employee

3

How is labour productivity calculated?

Total output/number of employees

4

What are the 4 main areas for operational objectives?

Labour productivity, capacity, capacity utilisation and unit costs

5

What is capacity utilisation?

This measures what percentage of the maximum possible capacity is being used

6

How do you calculate capacity utilisation?

Actual output/max possible output X100

7

Why might it be difficult for some firms to accurately calculate unit costs?

They may sell a number of different products.

8

What is the best capacity utilisation for a firm to have?

Around 90%, close to 100% but leaving enough spare capacity in case of problems and for flexibility

9

How can a business increase efficiency?

Increase labour productivity
Invest in tech
Job redesign

10

Why might it be hard to increase efficiency?

Employers may resist without pay rises
There may be costs of improving efficiency

11

What is lean production?

It is about getting more from less and minimising waste

12

What is just-in-time production?

Where materials are received just as they are needed for production

13

What is time-based management?

It aims to reduce time wasted in operations, such as shorter lead times

14

What is TQM?

An idea of quality assurance where all workers have responsibility for getting it right for time

15

Why is TQM more effective for a business than quality check teams like with Henry Ford?

It reduces costs by cutting out problems and stopping products having to go back to the beginning of the production line

16

What is Kaizen?

This is the idea of individual workers making small changes on a regular basis

17

What is quality assurance?

Making sure quality needs are met

18

Name 3 benefits of improving quality

-more (potentially) brand loyalty
-less costs from having to dive things again
-a USP

19

Name 3 consequences of poor quality

-loss of reputation
- increased costa from having to do things again
-potential problems with laws and regulations depending on product being sold

20

For which kind of firms might quality and quality improvement be the most important objective?

-firms selling luxury goods
-firms in competitive markets -USP

21

Name 3 influences on the amount of inventory held

-the nature of the product
-nature of demand, e.g. Seasonal?
-opportunity cost of holding stock

22

What is buffer inventory?

The minimum amount of stock a business wants to hold

23

What is the reorder level?

The level of stock at which a new order is placed. This will depend on lead times.

24

What does 'lead time' mean?

The time it takes between an order being placed and the stock being delivered

25

What might a business consider when choosing their suppliers?

-costs
-location of supplier (could mean different costs and led times)
-capacity of supplier and their potential to match potentially higher future demand from the business
-their reliability
-their flexibility
-the ethics of the suppliers as it could have an effect on the business purchasing from them

26

What is outsourcing?

Paying another firm to part of your firms' work for you

27

What are the advantages of outsourcing?

-cuts costs potentially (means you don't have to expand and buy new equipment)
-firm may be specialist
-may enable quicker responses from the firm if they have good relations with the firm they have outsourced to. This is also because the business is not trying to do everything itself.

28

What are the drawbacks of outsourcing?

-may cost a lot
-may be issues with quality
-if there are any problems with the work done by the firm it could impact on the reputation of the business.