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Business Studies > Chapter 23- operations planning > Flashcards

Chapter 23- operations planning Flashcards

1
Q

what is operations planning?

A

preparing inputs to supply products to meet expected demand.

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2
Q

what factors influence operations decisions?

A
  • marketing factors
  • availability of resources
  • technology
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3
Q

what is sales and operations planning?

A

trying to match supply to potential demand.

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4
Q

how do accurate sales forecasts benefit operations managers?

A
  • minimum inventory levels
  • demand can be met
  • appropriate number of staff
  • reduce wastage (not produce products that arent in demand)
  • produce the right product mix.
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5
Q

what’s CAD?

A

The use of computer to create 2D or 3D visual representations for physical objects. eg. adobe photoshop

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6
Q

what’s CAM?

A

the use of computer software to control machines. for eg. powermill used to make tools.

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7
Q

what are the benefits of CAD?

A
  • faster time to market
  • accurate
  • better quality
  • low product development costs
  • more productivity
  • easily replicable
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8
Q

what are the limitations of CAD?

A
  • complex programs
  • more training needed
  • expensive. computers, electricity bill etc
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9
Q

benefits of CAM?

A
  • fast
  • accurate
  • better quality
  • flexible (quick changeover)
  • with the help of CAD, allows more designs. increases competitiveness.
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10
Q

limitations of CAM?

A
  • cost of machinery
  • maintenance of machinery
  • can have errors. (quality control is needed)
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11
Q

what is operational flexibility?

A

the ability of the business to vary both the level of production and the range of products following changes in demand.

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12
Q

how can operational flexibility be achieved?

A
  • increase space. buy more buildings and machines.
  • flexible workforce. hire part time or train them.
  • hold high stocks.
  • mass customisation equipment.
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13
Q

what is process innovation?

A

the use of new and much improved technology in the production or delivery process.

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14
Q

what is job production?

A

making a one-off product specially designed for the customer.

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15
Q

advantages of job production?

A
  • customer satisfaction
  • high prices can be charged
  • motivated workers
  • skilled workers so less chance of errors
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16
Q

disadvantages of job production?

A
  • expensive cuz skilled workers
  • expensive cuz more workers (labour intensive)
  • skilled workers are difficult to hire
  • if workers are not skilled enough then there could be a blunder.
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17
Q

what is batch production?

A

when a quantity of one product is made, then a quantity of another. products are made in batches like different size t shirts.

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18
Q

what are the advantages of batch production?

A
  • flexible. can cater to changes in demand
  • workers wont be bored
  • if one machine breaks down production wont be stopped
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19
Q

disadvantages of batch production?

A
  • low worker motivation
  • warehouse costs
  • transport costs
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20
Q

what is flow production?

A

making items in a continually moving process. eg. free size t shirts.

21
Q

advantages of flow production?

A
  • more quantity in less time.
  • less labour costs
  • due to low costs less price can be charged. meaning high sales
  • less labour training
22
Q

disadvantages of flow production?

A
  • boring job so low employee motivation
  • if one machine breaks down production will be stopped.
  • high installment costs of equipment
23
Q

what is mass customisation?

A

the use of flexible computer aided programs to produce products to meet individual customers’ demands at mass production price. for eg. dell computers.

24
Q

advantages of mass customisation?

A
  • customer satisfaction
  • higher prices can be charged
  • low unit costs (higher added value)
  • motivated labour
25
Q

disadvantages of mass customisation?

A
  • expensive machinery
  • skilled and flexible labour needed (difficult to find)
  • high labour costs
  • if machine breaks work will be stopped.
26
Q

what are the factors which affect choice of prodcution method?

A
  • size of market
  • amount of capital available
  • amount of land, labour available.
  • demand. whether more numbers of ppl would like customised products (mass customization)
27
Q

what are the problems from changing from job to batch?

A
  • cost of equipment
  • storage costs
  • low worker motivation
28
Q

what are the problems of changing from batch to flow?

A
  • cost of equipment
  • demotivated workers
  • accurate sales forecast will be needed.
29
Q

what are the key characteristics of location decisions?

A
  • difficult to reverse
  • taken at highest management level
  • strategic in nature (long term big impact)
30
Q

what is an optimal location?

A

a location that gives the best combination of quantitative and qualitative factors.

31
Q

what are some drawbacks of non optimal locations?

A
  • high site costs
  • high labour costs
  • low unemployment
  • high unemployment (incomes low so less demand for income elastic products)
  • transport problems.
32
Q

what are the quantitative factors that affect location decisions? (measureable in terms of finance)

A
  • site costs
  • labour costs
  • grants
  • transport costs
  • sales potential
33
Q

what techniques can be used to assist in location decisions once quantitative factors have been identified?

A

1- profit estimates.
by comparing the estimated profits of each location, the location giving most profit can be identified.
HOWEVER:
annual forecasts alone are of very limited use. they need to be compared with capital costs of buying and setting up location. a location that gives 10% higher profits is less likely to be chosen if the capital cost is 50% higher.

2- Investment appraisal.
can be used to identify which locations will have the highest returns.
HOWEVER
it requires estimates of costs and revenue for several years so it can be inaccurate and uncertain.

3- Breakeven analysis.
shows the number of units that must be made to cover total costs. the lower the breakeven, the better the site.
HOWEVER
it is unrealistic, costs cant always be classified and no allowance for inventory.

34
Q

what are the qualitative factors that affect location decisions?

A
  • safety
  • room for further expansion
  • ethical considerations (making workers redundant, moving to a country with less strict laws)
  • managers preference
  • infrastructure
  • environmental concerns
  • availability of water and power supplies.
35
Q

what are some other locational issues?

A

-the pull of the market.
shop should be where potential customers are. however its less important cuz transportation.
-government restrictions. dont locate in residential area but create jobs etc.
-external economies of scale. all firms of the same industry should be located near each other

36
Q

what are the advantages of a multi site location?

A

1- convenience to customers
2- low transport costs
3- if there are technical problems in one factory others keep producing
4- opportunities for delegation of managers and worker promotion. improving employee motivation

37
Q

what are the disadvantages of a multi site location?

A
  • communication problems
  • cultural differences in different countries.
  • potential lack of control and direction from head office.
  • if sites are too close to each other cannibalism can happen.
38
Q

what does multi national mean?

A

a firm that operates in more than one countries.

39
Q

what is offshoring?

A

moving a business’s processes or sevices to the same or another company in another country.

40
Q

why do businesses move abroad?

A
  • to cut costs
  • to assess world markets
  • to avoid trade barriers. (taxes or quota)
41
Q

what are trade barriers?

A

taxes or other limitations on the free international movement of goods and services.

42
Q

why do businesses move abroad?

A
  • to cut costs
  • to assess world markets
  • to avoid trade barriers. (taxes or quota)
43
Q

what are trade barriers?

A

taxes or other limitations on the free international movement of goods and services.

44
Q

what are the problems of moving abroad?

A
  • language barriers (communication probs dissatisfied customers)
  • cultural differences (a wine shop wont sell in pakistan)
  • ethical considerations (jobs will be lost. if child labour is used or something to cut costs then bad name)
  • supply chain concerns. JIT manufacturing will become riskier.
  • level of service concerns. offshoring some services like banking, accounting etc might lead to poor quality cuz communication problems.
45
Q

what are the different type of economies of scale?

A
  • purchasing economies (discounts)
  • technical economies (modern technology is more effecient so reduces cost)
  • financial economies (banks more likely to give loan, low interest rates)
  • marketing economies (costs can be spread over as there will be more sales. also big firms are usually famous already)
  • managerial economies. large firms will hire managers that are expert and make less mistake)
46
Q

what are economies of scale?

A

when a business cuts down average unit costs due to large scale of production.

47
Q

What are diseconomies of scale?

A

factors that cause averages cost to rise when scale of production is increased.

48
Q

what are different types of diseconomies of scale?

A
  • communication problems. too much news from everywhere so managers might get bored and inefficient.
  • alienation of workforce. low motivation cuz low self esteem.
  • poor coordination. if one outlet is unethical the whole firm will pay damage.
49
Q

how can diseconomies be avoided?

A
  • set objectives. this will improve coordination problems
  • decentralization. only important problems shall be discussed with the head office.
  • reduce diversification.

Business Studies (13 decks)

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