Business - Operations

Question 1

What are a businesses operational objectives?

Answer 1

costs, quality, speed of response and flexibility, dependability, environmental objectives and added value

Question 2

What does labour intensive mean?

Answer 2

when labour costs outweigh capital costs of a business

Question 3

how do you measure efficiency of a business?

Answer 3

labor productivity, unit costs, capacity and capacity utilisation.

Question 4

What is the definition of capacity?

Answer 4

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

Question 5

what is the formula for capacity (not capacity utilization)

Answer 5

capacity output per annum or month/ maximum possible output per annum or month X100

Question 6

What are some methods of increasing capacity utilisation?

Answer 6

job rotation, good working conditions, piece-rate-pay, invest in new technology, training or increase the amount of working hours

Question 7

what is the definition of unit cost?

Answer 7

the cost of producing one unit of output

Question 8

what is the formula for calculating unit cost?

Answer 8

total costs(£)/ units of output (volume)

Question 9

why is it important to have spare capacity?

Answer 9

allows you to plan maintenance which is very important for a capital intensive business.

Question 10

what is the optimum capacity level?

Answer 10

93%

Question 11

What are the advantages of spare capacity?

Answer 11

less pressure on employees, more time for maintenance and repair, improvements can be planned and you can cope with sudden increases in demand.

Question 12

what are the disadvantages of having spare capacity?

Answer 12

higher proportion of fixed costs per unit, negative image of being unsuccessful, less work for employees so they become bored or demoralized

Question 13

What is lean production?

Answer 13

an approach to production that aims to minimise waste, which can reduce costs.

Question 14

what are the aims of lean production?

Answer 14

zero delay, zero stocks, zero mistakes, zero waiting and zero accidents

Question 15

What are the advantages of using JIT?

Answer 15

reduced waste, don’t have to store much stock, you can customise the products, increased efficiency and smaller warehouse space needed

Question 16

What are the disadvantages of using JIT?

Answer 16

cant handle surges in demand, reliant on suppliers, procurement process may take longer and there are reduced options for dealing

Question 17

What is the definition of Kaizen?

Answer 17

continuous improvement, an approach to production that aims to achieve change from a series of small steps

Question 18

What are the benefits of Kaizen?

Answer 18

higher capacity utilization, less waste, more energy efficient, reduced risk, better customer experience and more accurate information.

Question 19

What are the benefits of using technology in production?

Answer 19

better working conditions for staff, lower staff costs, improved quality, automation, more efficient and you can have it work longer.

Question 20

What is cell production?

Answer 20

organising production around teams instead of a production line. The production is divided into a series of different stages which are undertaken by teams or cells.

Question 21

advantages of cell production?

Answer 21

within the cells individuals can use their individual skills, employees are motivated as they have control aver their work, a cell can refuse a product form a previous cell if its bad quality

Question 22

What are the disadvantages of using cell production?

Answer 22

heavy investment costs for new machinery, cells can work at different speeds which can cause conflict and tension, and output may be lower than a flow production system

Question 23

What does economies of scale mean?

Answer 23

a proportionate saving in costs gained by an increased level of production

Question 24

What does using technology include?

Answer 24

Robotics, automation, communication, design

Question 25

What are the tangible factors for perceived high quality?

Answer 25

Packaging, raw materials quality, design, durability

Question 26

What are the intangible factors for perceived high quality?

Answer 26

Feelings, customer service, in-store experience, post sales service, marketing, delivery speed, brand image, exclusivity, price

Question 27

What is quality control?

Answer 27

A system that uses inspections to check the quality of work at stages of the manufacturing process

Question 28

What are the advantages of quality control?

Answer 28

Inspectors can spot common problems and put them right, faulty products won’t reach the customers

Question 29

Disadvantage of quality control?

Answer 29

Expensive to operate, does not encourage team responsibility, responsibility rests with the inspectors therefore employees take no responsibility

Question 30

What is quality assurance ?

Answer 30

a system that involves quality by arranging every process to get products right first time

Question 31

What is total quality production?

Answer 31

The approach to quality where everyone is focused on improving and reducing errors

Question 32

What is the definition of supply chain?

Answer 32

all the business people and activities that take part in the production process from the start until it gets the the customer

Question 33

What is inventory?

Answer 33

Otherwise known as stock, raw materials work-in-progress, and finished goods held by a business to enable production to take place and meet customer demand

Question 34

What is outsourcing?

Answer 34

the delegation of one or more business processes to external provider, who then owns, manages and administrators the selected processes to an agreed standard

Question 35

What is the subcontracting?

Answer 35

The practice of outsourcing specific tasks or projects to other companies or individuals who specialise in those tasks