chapter 3 a-c

Question 1

Operations management

Answer 1

coordinating and organising the activities involved in producing the goods or services that a business sells to customers

Question 2

efficiency

Answer 2

how productively a business uses its resources when producing a good or service.

Question 3

effectiveness

Answer 3

the extent to which a business achieves its stated objectives

Question 4

To make a profit

Answer 4

Implement technology into the production process. Reduces the number of employees required in the operations system, which can reduce overall expenses associated with labour and increase profit.

Question 5

Increase market share

Answer 5

Check that the products produced are not faulty. Can improve the quality of a business’s product, increasing customer satisfaction and the business’s proportion of sales within its industry.

Question 6

Meet shareholder expectations

Answer 6

Create a website for customers to purchase goods and services. Increases online sales, leading to higher levels of profit and higher dividends for shareholders.

Question 7

Fulfil a market need

Answer 7

Use technology to design new products. Can design innovative products to fulfil unmet needs in the market.

Question 8

Fulfil a social need

Answer 8

Ensure that any waste is recycled in the production process. Can reduce wastage in the production process, minimising the business’s impact on the environment.

Question 9

inputs

Answer 9

the resources used by a business to produce goods and services.

• Labour resources (employees)
• Raw materials
• Equipment and machinery
• Time
• Electricity
• Information

Question 10

processes

Answer 10

the actions performed by a business to transform inputs into outputs.

• Mixing
• Designing
• Baking
• Computing
• Assembling
• Constructing

Question 11

outputs

Answer 11

the final goods or services produced as a result of a business’s operations system which are delivered or provided to customers.

Question 12

Production process (manufacturing business)

Answer 12

Manufacturing businesses tend to have highly automated processes that are capital intensive.

Question 13

Occurrence of production and consumption (manufacturing business)

Answer 13

At manufacturing businesses, production and consumption of the good occur at separate times.

Question 14

Customer contact (manufacturing business)

Answer 14

Manufacturing businesses often have a low degree of customer contact during production, as the production stage is separated from consumption.

Question 15

Tangibility (manufacturing business)

Answer 15

The outputs produced by a manufacturing business are tangible.

Question 16

Storability (manufacturing business)

Answer 16

The outputs produced by a manufacturing business can be stored as inventory.

Question 17

Consistency (manufacturing business)

Answer 17

Manufacturing businesses produce goods that can be standardised through mass production

Question 18

Production process (services business)

Answer 18

Service businesses tend to have production processes that are labour intensive.

Question 19

Occurrence of production and consumption (services business)

Answer 19

At service businesses, production and consumption of the service occur simultaneously.

Question 20

Customer contact (services business)

Answer 20

Service businesses tend to have a high degree of customer contact during production, as production and consumption occur simultaneously.

Question 21

Tangibility (services business)

Answer 21

The outputs produced by a service business are intangible.

Question 22

Storability (services business)

Answer 22

The outputs produced by a service business are not able to be stored as inventory.

Question 23

Consistency (services business)

Answer 23

Services usually are not standardised, and instead tailored specifically to individual customers needs.

Question 24

The relationship between operations and

productivity

Answer 24

Productivity is the overall measure of an organisation’s ability to transform inputs into outputs. Productivity refers to the level of output obtained from a level of input. The more efficient an organisation is in turning inputs into outputs the higher the rate of productivity.

In order to improve productivity the operations manager must ensure the most efficient use of the organisation’s inputs; that is, to get the highest output possible from the inputs used.
The organisation must effectively manage its production of goods and/or services through wise implementation of operations management strategies. These strategies focus on 4 main areas: technological developments, materials management, quality and waste minimisation

Question 25

Similarities between operations systems of both manufacturing and service businesses.

Answer 25

• Both service and manufacturing businesses aim to optimise their operations to produce high quality outputs at a low cost of production.
• Both service and manufacturing businesses have to deal with suppliers during the process of managing operations.
• Both service and manufacturing businesses can utilise forms of technology in their operations systems.
• Both service and manufacturing businesses aim to optimise efficiency and effectiveness in their operations.