3.4 Operations Flashcards
What do operational objectives focus on
1.costs
2:quality
3.safety targets/speed of response
4.flexibility
5.environmental objectives
6.defect rates/dependability
What is Labour productivity
Measures the output per worker.
-is influenced by motivation, training/skills of workforce, and complexity of product.
Labour productivity calculation
Total output/number of employees
What do unit costs show
The average costs of producing a single unit. Business’a want to keep this low.
Calculation of average unit costs
Total costs/output
(Total costs=fixed times (variable times cost for unit)
What does capacity show
-maximum amount of output achievable if all resources are utilised
-business’s aim to match capacity demand
What is capacity utilisation
Measures the existing output over a given period as a % of the maximum output
(The amount you are actually using)
Capacity utilisation calculation
Actual output/maximum output times 100
What is productivity
The amount of output produced per unit of input (labour)
What is efficiency
How well resources are used to achieve a goal, with minimal waste/effort
This to increase efficiency
-increase capacity utilisation
-lean production techniques
-increase labour productivity
-implement technology
Difficulties increasing efficiency
It depends on:
-business objectives
-whether issue is long or short term
Aim of lean production techniques
To create the least amount of waste whilst maintaining or even improving quality
( waste= waiting time/defects/over-production)
How to implement lean production
-just in time
-kaizen
-time based management
What is just in time production
Limited stock, stock arrives ‘just in time’ for the scale of production
Pros of lean production
-reduced waste (less storage cost)
-less risk of stock not sold/‘going off’
Cons of lean production
-higher average unit costs
-very reliant on suppliers
What is just in case production
The stock held by a business (raw materials, products in progress, and finished goods)
Pros of just in case
Can manage uncertainty
-unexpected demand
-suppliers fail to demand
Larger orders/ purchasing economies of scale
-average cost per unit falls
Cons of just in case
-higher storage costs
-increased wastage, depending on what is stored (food)
What is kaizen
Concentrates on small but frequent improvements in every aspect of production process
-constant improvements= better efficiency/quality of products/productivity
What is capital intensive process
Machinery used in production
