Gibbins operations

Question 1

Operations management meaning

Answer 1

Area of management concerned with designing and controlling the process of production and redesigning business operations in the production of good and services

Question 2

Adding value=

Answer 2

The difference between the price of the finished product/service and the cost of the inputs involved in making it

Question 3

How to add value(function/cost/aesthetics)

Answer 3

• building a brand
• delivering excellent service
• product features and benefits
• offering convenience reducing cost

Question 4

Benefits of adding value

Answer 4

• charging a higher price
• creating a point of difference from the competition
• protecting from competitors trying to steal customers by charging lower price

Question 5

Disadvantages of adding value

Answer 5

• not guaranteed that the cost if adding value can be recouped
• the increase of price may restrict sales
• the elasticity of product may make price increases hard to accept

Question 6

Value added =

Answer 6

Selling price - cost of inputs

Question 7

The mission statement

Answer 7

Is the overriding goal of the business and the reason for its existence. A mission statement provides a strategic perspective for the business and a vision for the future

Question 8

Aim meaning

Answer 8

Long term plan for the business

E.g. to survive, grow, increase market share, increase or maximise profit

Question 9

SMART objectives

Answer 9

Specific 
Measurable
Achievement 
Relevant 
Time bound

Question 10

Invention meaning

Answer 10

The action of creating a new process or device, opening a new market

Question 11

Innovation

Answer 11

Adding on developments to an existing product, improving its functions

Question 12

Job production

Answer 12

Involves firms producing items that meet the specific requirement of the customer

• these are a one-off, unique items such as those made by an architect or wedding dressmaker

Question 13

Pros to job production

Answer 13

• meets customer needs
• quality
• motivational
• flexible
• add value

Question 14

Cons of job production

Answer 14

• No economies of scale
• higher costs
• skilled labour
• cash flow problems

Question 15

Batch production

Answer 15

Many similar items are produced together. Each batch goes through one stage of the production process before moving into the next stage e.g. bread, clothing

Question 16

Flow production

Answer 16

Involves a continuous movement of items through the production process. Mass

Question 17

Ads of flow production

Answer 17

Is continuous 
Economies of scale
Standardised products
Division of labour and specialisation 
Employees become skilled and more efficient

Question 18

Cons of flow production

Answer 18

Difficult to alter the production process
Boring for employees
High setup costs
Breakdowns 
Stock holding

Question 19

Cell production

Answer 19

• Workers are organised into multi-skilled teams
• each team is responsible for a particular part of the production process including quality control and health and safety

Question 20

Cell production pros

Answer 20

• closeness of cell members should improve communication avoiding confusion
• workers become multi-skilled and more adaptable to future needs of the business
• great worker motivation as there is variety of working tasks

Question 21

Cons of cell production

Answer 21

• workers can feel that they are constantly being pushed for more and more output with no respite
• cell production may not allow a firm to use their machinery as intensively as Flow production

Question 22

Research and development meaning

Answer 22

The process that enables the creation of new and improved products to meet the customers needs and wants

Question 23

Process of R and D

Answer 23

• Market research Vs product orientated
• brainstorming
• morphological studies( grid system generates ideas cheaply and quickly)

Question 24

Factors influencing R and D

Answer 24

• level of competition
• product
• external environment
• state of the economy

Question 25

Value analysis

Answer 25

• improves value of a product by assessing each components cost
• seeks to find improvements to the components by either reducing cost or increasing the value of their functions

Question 26

3 main aspects for to value analysis

Answer 26

• Function- does it do what the consumer expects it to do
• Cost- keeping costs down allows businesses to be competitive (charge lower prices)
• aesthetics- concerned with how the product looks(vary from product to product)

Question 27

Product launch

Answer 27

To launch a product a business uses the marketing mix to identify if there is a gap in the market and if the customer need for a certain product or service

Question 28

Main factors in product launch

Answer 28

• marketing research - finding out what customers want, who they are and where the gaps are in the market
• product development and testing - make prototypes; experiment by allowing a sample of potential customers to trial the product before it is launched

Question 29

Critical Path Analysis(CPA)

Answer 29

• CPA is a project management technique that involves mapping out every key task that is necessary to complete in a project.
  It identifies the quickest way a project can be completed

Question 30

Total float =

Answer 30

LFT- duration-EST

Question 31

Free float =

Answer 31

EST(next activity) - duration - EST(this activity)