chapter 23- operations planning Flashcards
define operation planning
preparing input resources to supply products to meet expected demand
define CAD (computer aided design)
the use of computer programs to create 2D or 3D graphical representation of physical objects
define CAM (computer aided manufacturing)
the use of computer software to control machine tools and related machinery in the manufacturing of components or complete products
define operation flexibility
the ability of a business to vary both the level of production and the range of products following changes in consumer demand
define process innovation
application and the use of a new or much improved production method or service delivery method
define job production
producing a one off item specially made and designed for the customer
define batch production
producing a limited number of identical products- each item in the batch passes through one stage of production before passing onto the next stage
define flow production
producing items in a continually moving process
define mass customization
the use of flexible computer used production systems to produce items to meet individual customers requirements at mass production cost levels
define optimal location
a business location that gives the best combination of quantitive and qualitative factors
define quantitive factors
these are measurable in financial terms and will have direct impact on the costs of a site or the revenues from it and its profitability
define qualitative factors
non measurable factors that may influence business decisions
define multi site location
a business that operates from more than one location
define offshoring
the relocation of a business process done in one country to the same or another company in another country
define multinational
a business with operation or production bases in more than one country
define trade barriers
taxes (tariffs) for other limitations on the free international movement of goods and services
define scale of operation
the maximum output that can be achieved using the available inputs (resources)- this scale can only be increased in the long term by employing more of all inputs
define economies of scale
reductions in a firms unit (average) costs of production that result from an increase in the scale of operations
define diseconomies of scale
factors that cause average costs of production to rise when the scale of operation is increased
what can influence the decisions taken by operations managers
marketing factors, availability of resources, technology
name 2 benefits of CAD (computer aided design)
lower product development costs, increased productivity, improved product quality, good visualization of the final product, great accuracy so errors are reduced
give 2 limitations to CAD (computer aided design)
couples programs, extensive employee training, large amounts of computer processing power required which can be expensive
name 2 advantages to CAM (computer aided manufacturing)
precise manufacturing and reduce quality problems compared to production methods controlled by people, faster production and increased labour productivity, more flexible production, integrating CAD and CAM allows more design variants so niche products and mass products can be made
give 2 limitations to CAM (computer aided manufacturing)
cost of hardware, programs and employee training, hardware failure like breakdowns are complex, expensive and time consuming to solve, quality assurance is still needed
giev 3 ways that operational flexibility can be achieved
increase capacity by extending building and buying more equipment, hold high stocks, have flexible and adaptable labour force, have flexible flow line production equipment
give a factor that will influence a businesses decision of which production style to adopt
size of market, amount of capital available, ability of other resources, market demand exists for products adapted to specific customer requirements
what type of workforce does job production have
highly skilled
what does batch production require
labour and machines must be flexible to switch to making batches of other designs
what are 2 essential requirements of flow production
specialized and often expensive capital equipments and a high steady demand for standardized products
give an advantage and disadvantage of job production
advantage- able to undertake specialist projects or jobs often with high value added, high levels of worker motivation
disadvantages- high unit production costs, time consuming, wide range of tools and equipment needed
give an advantage and disadvantage of batch production
advantage- some economics of scale, faster production with lower unit costs than job production, some flexibility in design of product in each batch
disadvantage- high levels of stocks at each production stage, unit costs likely to be higher than with flow production
give an advantage and disadvantage of flow production
advantage- low costs due to constant working of machines, high labour productivity and economies of scale
disadvantage- inflexible and time consuming, expensive to set up
name 2 problems of changing production methods from job to batch
cost of equipment needed to handle large numbers in each batch, additional working capital needed to finance stocks and work in progress, staff demotivation- less emphasis placed on an individuals craft skills
what are the quantitative factors influencing location decisions
site and other capital costs such as building or shop fitting costs, labour costs, transport costs, sales revenue potential, government grants
what are the qualitative factors influencing location decisions
safety, room for further expansion, managers preferences, ethical considerations, environmental concerns, infrastructure
name 2 advantages to multi site locations
greater convenience for consumers, lower transport costs, cost advantages if in different countries
name 2 disadvantages of multi site locations
coordination problems between the locations, potential lack of control, different cultural standards and legal systems in different countries
what are the 3 reasons for international location decisions
to reduce costs, to access global (world) market, to avoid protections trade barriers
what are 3 issues and potential problems with international locations
- language and other communication barriers
- cultural differences
- level of service concerns
- supply- chain concerns
- ethical considerations
what are 3 factors that influence the scale of operation of a business
owners objectives, capital available, size of the market the firm operates in, number of competitors, scope for scale economies
give 3 management lead problems that cause diseconomies of scale
- communication problems
- alienation of the workforce
- poor coordination
give 2 approaches to minimise the risk of diseconomies of scale
- management by objectives
2. decentralisation
