3.4.1Operations management Flashcards

1
Q

Capacity

A

The maximum total output or production that a business can produce in a given period of time

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2
Q

How to utilise capacity efficiently?

A

-Under utilisation (excess capacity)
-Capacity shortage

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3
Q

Capacity utilisation (equation)

A

(actual output per annum/maximum possible outcome per annum) x 100

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4
Q

Reasons for spare capacity

A

-New competitor or new product enter the market
-Fall in demand
-Unsuccessful marketing
-Seasonal demand
-Over investment in assets
-Merger or takeover

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5
Q

Advantages of spare capacity

A

-More time for maintenance
-Less pressure on employees
-Can cope with increased demand plan for expanding sales

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6
Q

Disadvantages of spare capacity

A

-High proportion of fixed costs (higher unit costs)
-Poor image

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7
Q

Operations management

A

Management of processes, activities and decisions relating to the way goods and services are produced and delivered

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8
Q

Types of operations

A

-Added value
-Quality
-Cost and volume
-Dependability
-Efficiency and flexibility
-Environmental

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9
Q

Cost and volume objectives

A

-Operations need to be cost-effective
-Unit cost (total costs/total units)

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10
Q

Quality

A

Only about meeting the needs and expectations of customers

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11
Q

Efficiency

A

Production is maximised based on given levels of capital, land, labour and enterprise

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12
Q

Flexibility

A

-Being able to meet demand (labour, money and enterprise)

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13
Q

Environmental objectives

A

-Strict environmental legislation
-Customers increasingly base their buying decisions on firms that take environmental responsibility seriously

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14
Q

Average cost per unit is calculated

A

total production costs in period (£)/total output in period (units)

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15
Q

Internal

A

Arise from increased output from the business

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16
Q

External

A

Occur within an industry, all competitors benefit