23. Making Operational Decisions

Question 1

Capacity.

Answer 1

Max. Output that can be produced with existing resources in given time.

Question 2

Capacity utilisation

Answer 2

Proportion of current output is of capacity.

Current output/capacity X100

Question 3

Unit cost

Answer 3

Avg cost per unit of output.

Total cost/output

Question 4

Excess capacity.

Answer 4

When a business has greater capacity than is likely to be used in foreseeable future.

Question 5

Overtime.

Answer 5

Staff working behind contracted hours in exchange for higher hourly wage rate.

Question 6

Temp staff

Answer 6

Workers employed for fixed period of time after which employee contract may not be renewed.

Question 7

Part time staff

Answer 7

Workers employed in a less that full weekly hours contract.

Question 8

Subcontracting.

Answer 8

Using a supplier to manufacture a firms product or service.

Question 9

Stocks.

Answer 9

Materials or finished goods held by a firm as needed to supply demand.

Question 10

Rationalisation.

Answer 10

Reorganising resources to cut costs.

Question 11

Operational targets.

Answer 11

Specific, measurable objectives set for each operations activity.