134 - 142 Operations Flashcards
What is added value?
Added value is the difference between the price of the finished product (selling price) and the cost of inputs involved in making it.
Added value = selling price per unit – variable costs per unit.
What is job production?
Producing a one-off item that has been tailor made to suit a specific customer.
What is batch production?
Batch production is where a limited number of identical products are made in groups.
What is flow production?
Continuous production on production lines, allowing a large quantity of identical products to be made.
How is labour productivity measured?
Labour productivity can be measured by dividing the output by the number of workers over a period of time.
Total output per period of time / Average number of employees per period of time.
What is capacity utilisation?
A measure of the extent to which the productive capacity of a business is being used, expressed as a percentage.
Formula: actual output/maximum possible output x 100.
What is lean production?
Lean production aims to remove waste from the production process, increasing productivity and reducing costs.
It seeks to improve efficiency by minimising resource use while maintaining quality.
What is Kaizen?
Continuous improvement where employees are encouraged to make regular small changes to improve waste reduction, productivity, and quality.
What is just in time production (JIT)?
A system that ensures parts, raw materials, and components are received only when needed, minimizing stock holding and emphasizing quality.
What is cell production?
The production line is subdivided into cells (teams) where workers are trained to fulfill multiple tasks, allowing job rotation.
What is time-based management?
Emphasis is placed on reducing time taken in all aspects of the production process.
What is quality control?
Quality control is based on inspection of finished products, occurring at the end of the production process.
What is quality assurance?
A system of agreed quality standards at each stage of production, focusing on prevention of poor quality.
What is total quality management?
A managerial approach focusing on quality to improve effectiveness, flexibility, and competitiveness.
What is benchmarking?
Benchmarking is where a business sets a target in terms of quality standards based on competitors or best performing areas.
What is stock control?
The management of raw materials, work-in-progress, and finished goods to ensure a smooth flow of goods to the final customer.
What is re-order level?
The level of stock at which a new order is placed.
What is re-order quantity?
The quantity ordered to return stockholding to maximum level, measured by the difference between maximum and minimum stock levels.
What is lead time?
The amount of time that elapses between placing an order and the delivery of that order.
What is buffer stock?
The amount of stock held below the minimum stock level and zero stock, for unforeseen rises in demand or precaution against supply breaks.
What is minimum stock level?
The lowest amount of stock the business wants to hold.
What is innovation?
The creation of a new product or an improved version of a current product or service, and the commercial exploitation of an invention.
What is CAD (computer aided design)?
CAD software enables businesses to create products on-screen, test them, and link to machines and printers for production.
What is research and development?
Research is the inquiry into new ideas, while development changes those ideas into commercially viable products and processes.
