business unit 4 vocabulary Flashcards
productivity
the output measured against the inputs used to create it
productivity formula
quantity of output / quantity of input
labour productivity formula
output over a given period of time / number of employees
buffer inventory level
inventory held to deal with uncertainty in customer demand and deliveries of supplies
lean production
techniques used by the business to cut down waste and therefore increase efficiency, for example, by reducing the time it takes for a product to be developed and become available for sale
kaizen
a Japanese term meaning continuous improvement through the elimination of waste
just-in-time JIT
a production method that involves reducing or virtually elimination of waste inventories of the finished product. supplies arrive just at the time they are needed
job production
where a single product is made at a time
batch production
where a quantity of one product is made, then a quantity of another item will be produced
flow production
where large quantities of a product are produced in a continuous process. it is sometimes referred to as mass production
automation
where equipment used in the factory is controlled by a computer to carry out mechanical processes
eg. spraying paint on a car
the production line will consist mainly of machines and there are only a few people needed to ensure everything runs smoothly
mechanization
where production is done by machines but operated by people
eg. printing process
computer aided design CAD
a computer software that draws items being designed more quickly and allows them to be rotated to see the item from all sides, it is used for designing are products or restyling existing ones
computer aided manufacture CAM
where computers monitor the production process and control machines or robots on the factory floor
computer integrated manufacturing CIM
the total integration of computer aided design CAD and computer aided manufacture CAM. the computers that design the products are linked directly to the computers that aid the manufacturing process
electronic point of scale EPOS
used at checkouts where the operator scans the bar code of each item
electronic funds transfer at point of scale EFTPOS
where the electronic cash register is connected to the retailer’s main computer and also to banks over a wide area computer network
fixed costs
costs which do not vary the number of items sold or produced in the short run. they have to be paid whether the business is making any sales or not. they are also known as overhead costs
variable costs
costs which vary directly with the number of items sold or produced
total costs
fixed costs + variable costs
average cost per unit
the total cost of production divided by the total output. also known as unit cost
economies of scale
the factors that lead to a reduction in average costs as a business increases in size
diseconomies of scale
the factors that lead to an increase in average costs as a business grows beyond a certain size
break even level of output
the quantity that must be produced/sold for total revenue to equal total costs
