Making operational targets Flashcards
What are operational targets?
These are specific and usually measurable objectives set for each operations activity of a business.
What is capacity utilisation?
This is the proportion that current output is of full capacity output.
What is the calculation for capacity utilisation?
Current output/Maximum output x 100
What is unit cost?
The average cost per unit of output.
What is the calculation for unit cost?
Total costs/Output
What is Excess capacity?
When a business has greater production capacity than is likely to be used in the foreseeable future.
What is overtime?
Staff working beyond their contracted hours in exchange for a higher hourly wage.
What are temporary staff?
Workers employed for a fixed period of time after which the employment contract may not be renewed.
What are part time staff?
Workers employed on a less than fill weekly hours contract, e.g. 15 hours a week.
What is sub-contracting?
Using a supplier to manufacture part or all all a firms products or service.
What is stock?
Materials or finished goods held by a firm as needed to supply customer demand.
What is rationalisation?
Reorganising resources to cut costs - often leading to a cut back in capacity.
