23 The Nature of Operations

Question 1

Operations Management

Answer 1

Concerned with the use of resources called inputs(factors of production) such as land, labour, capital and enterprise to produce output in the form of goods and services.

Question 2

Intellectual Capital

Answer 2

The intangible capital of a business that includes human capital (well-trained & skilled employees), structural capital (databases & information system) & relational capital (good links with suppliers & customer).

Question 3

The process of inputs/factors of production to output are converted by

Answer 3

Operations department

Question 4

Transformational Process

Answer 4

An activity or group of activity that transforms one or more inputs, adds value to them & produces outputs for customers

Question 5

The aim for transformational process..

Answer 5

To achieve added value which means selling finished products for a higher value than the cost of the inputs.

Question 6

Operation managers can increase added value by effectively managing:

Answer 6

• Efficiency of production - Keeping costs as low as possible will help gain competitive advantage
• Quality - Goods and services must be suitable for purpose intended
• Flexibility and innovation - Need to develop & adapt to new processes and new products is increasingly important

Question 7

Productivity

Answer 7

Ratio of outputs to inputs during production (e.g. output per worker per time period.

Question 8

Level of Production

Answer 8

Number of units produced during a time period

Question 9

Production

Answer 9

PROCESS that transforms inputs into outputs.