5 Decision making to improve operational performance Flashcards
(5.1 setting operational objectives) What is the operations fuction responsible for?
the actual production of goods or services
turning inputs into outputs
adding value
(5.1 setting operational objectives) What are operational objectives likely to revolve around?
costs of production
quality of production
speed of responce and flexability
dependability
environmental objectives
(5.1 setting operational objectives) What are the 4 external influences on operational objectives?
political and legal
economic
technological
competition
(5.1 setting operational objectives) What are the 3 internal influences on operational objectives?
finance
marketing
human recources
(5.2 analysing operational performance) What does capacity utilisation mean?
Measures the extent to which a business uses its production potential. It is usually expressed as a percentage
(5.2 analysing operational performance) What does productivity mean?
a measure of the efficiency of production
labour productivity measures the output per worker in a given time period
(5.2 analysing operational performance) What are the 4 main areas for which targets may be set in operations data?
capacity
capacity utilisation
productivity
unit costs
(5.2 analysing operational performance) What does unit costs mean?
the cost of producing one unit (item) of good or service
(5.2 analysing operational performance) What does capacity mean?
the total or maximum amount a business can produce in a given time
(5.2 analysing operational performance) What is the calculation for capacity utilisation?
actual output in time period
—————————————————— x100
maximum possible output per period
(5.2 analysing operational performance) What is the calculation for labour productivity?
number of employees
(5.2 analysing operational performance) What is the calculation for unit costs?
units of output
(5.2 analysing operational performance) What are the 3 relationships to note when using data in operational decision making and planning?
the productivity of a workforce increases with increased capacity utilisation
unit costs decline with increased capacity utilisation
changing the number employed will impact on productivity levels
(5.3 increasing efficiency and productivity) What is operational efficiency?
getting more output from a given level of recources
(5.3 increasing efficiency and productivity) What are the 4 factors of production?
land
labour
capital
enterprise
(5.3 increasing efficiency and productivity) What does capital intensive mean?
refers to those businesses requiring a large amount of capital reletive to labour
(5.3 increasing efficiency and productivity) What does labour intensive mean?
refers to those businesses requiring a large proportion of labour reletive to capital
(5.3 increasing efficiency and productivity) What does dynamic pricing mean?
is a pricing strategy where businesses set highly flexible prices for products or services based on the market demand at a particular time
(5.3 increasing efficiency and productivity) A business might adpot a capital-intensive or a labour-intensive approach. The approach adopted depends on what?
the nature of the business
the nature of the product
the location
(5.3 increasing efficiency and productivity) When making a judgement about an individual businesses capacity utilisation it is important to compare both with what?
previous years
the average for that industry
(5.3 increasing efficiency and productivity) What is capacity utilisation?
the percentage of total capacity being produced
(5.3 increasing efficiency and productivity) What is excess capacity?
the difference between total capacity and the actual amount produced
(5.3 increasing efficiency and productivity) Why is some exess capacity useful?
gives some flexability
provides scope for new orders
could be important in a growing market
provides scope for proper maintenance
(5.3 increasing efficiency and productivity) What are 3 responces for excess capacity?
increase sales
reduce capacity
find alternative uses for plant
(5.3 increasing efficiency and productivity) What are 3 responces for excess capacity?
increase sales
reduce capacity
find alternative uses for plant
(5.3 increasing efficiency and productivity) What are 3 responces for lack of capacity?
outsource
increase capacity
reduce demand eg by dynamic pricing
(5.3 increasing efficiency and productivity) What 4 types of technology are used in operations?
advanced computer systems
the internet
computer-aided manufacture (CAM)
computer-aided design (CAD)
(5.3 increasing efficiency and productivity) What are the 7 benefits of new and updated technology?
reduced unit cost
greater competitivness
opportunities for premium pricing
improved quality
small to medium-sized businesses may benefit
possible access to new markets
reduced waste
(5.3 increasing efficiency and productivity) What are the 3 drawbacks to new and updated technology?
cost
resistance to change
possible training and recruitment
(5.3 increasing efficiency and productivity) What is JIT?
just in time
an inventory strategy that companies employ to increase efficiency and decrease waste by recieving goods only as they are needed for production
(5.3 increasing efficiency and productivity) What are 4 ways to improve labour productivity?
investment in technology
training and motivation
job redesign
reducing the labour force
(5.3 increasing efficiency and productivity) What are 3 difficulties of increasing labour productiving and efficiency?
cost
quality
resistance of employees
(5.3 increasing efficiency and productivity) What are the 5 benefits of the JIT stretagy?
reduces watse
reduces costs
reduces space needed
may increase flexability
provides for greater motivation
(5.3 increasing efficiency and productivity) What are the 3 drawbacks of the JIT strategy?
risks running out of stock
loss of opportunities for bulk purchase
requires trust in supplier
(5.4 improving quality) What does quality assurance mean?
a system for ensuring the desired level of quality in the development, production and delivery of products or services
(5.4 improving quality) What does total quality managment (TQM) mean?
a culture of quality throughout the organisation
(5.4 improving quality) What does Kaizen mean?
The Japanese business philosophy of continuous improvement where all employees are encouraged to identify and suggest possible improvements in the production process
(5.4 improving quality) What are 3 ways quality can be improved?
quality assurance
TQM
kaizen
(5.4 improving quality) What are 4 benefits of improving quality?
enhanced reputation and increased brand loyalty
competitive advantage- quality may give a USP
increased revenue due to higher sales
greater flexability in terms of price
(5.4 improving quality) What are 2 difficulties of improving quality?
cost
resistance to change
(5.4 improving quality) What are 3 consequences of poor quality?
the cost of scrapping or reworking products
the additional costs of goods are returned for repair or replacement
the costs resulting from the damage to the businesses reputation
(5.5 managing inventory and supply chains) What does inventory mean?
refers to the stock a business holds in the form of raw materials, components and work in progress
(5.5 managing inventory and supply chains) What is supply chain?
involves the whole process of getting a good (or service) to the consumer
(5.5 managing inventory and supply chains) What is mass customisation?
the production of customer tailored good or services to meet customers diverse and changing needs
(5.5 managing inventory and supply chains) What is outsourcing?
the transferring of production that was previously done in-house to a third party, in order to free up cash, time, personnel and facilities to concentrate on areas where the organisation has a competitive advantage
(5.5 managing inventory and supply chains) What is the differnce between inventory and supply chain?
inventory is stovk and supply chain is the whole process of provising a good or service
(5.5 managing inventory and supply chains) What is flexability?
the ability to meet a customers requirements in terms of:
numbers ordered
varieations in specification eg mass customisation
(5.5 managing inventory and supply chains) What is speed of response?
how quickly a business fulfils an order
(5.5 managing inventory and supply chains) What is dependability?
its punctuality or whether it fulfils the order on time
(5.5 managing inventory and supply chains) What are 3 methods of managing demand?
additional marketing
price changes
sales promotions
(5.5 managing inventory and supply chains) What are 4 methods of managing supply?
flexible workforce
increase capacity
produce to order
outsourcing
(5.5 managing inventory and supply chains) What are 3 values of outsourcing?
flexability
reliability
possible lower costs
(5.5 managing inventory and supply chains) What are the 3 things outsorcing depends on?
quality
dependability
relationship established with outsourced company
(5.5 managing inventory and supply chains) What are the 4 influences on the amount of inventory that can be held?
thr nature of the product
the nature of production
the nature of demand
opportunity cost
(5.5 managing inventory and supply chains) What are the 5 key features of the inventory control chat?
buffer inventory
reorder level
lead time
maximum stock level
reorder quantity
(5.5 managing inventory and supply chains) What are the 5 factors influencing the choice of supplier?
dependability
flexability
quality
price and payment terms
ethics
(5.5 managing inventory and supply chains) What 3 things are required to have the right goods in the right place at the right time?
good communication with suppliers
coordination with other functional areas
an understanding of the external environment
