nature of operations

Question 1

operations management is

Answer 1

concerned with the use of resources called inputs to provide outputs in the form of goods and services

Question 2

operations managers must be concerned with:

Answer 2

■ efficiency of production − keeping costs as low as possible will help to give competitive advantage
■ quality − the good or service must be suitable quality − the good or service must be suitable for the purpose intended ■ flexibility and innovation - need to adapt and develop new processes and products

Question 3

the production or transformation process

Answer 3

inputs (factors of production) process of production either capital or labour intensive to give us output (finished goods, services)

Question 4

the degree of value created and added to the inputs will depend on a number of factors

Answer 4

1. the design of the product
2. the efficiency with which the input resources are combined and managed
3. being able to convince consumers to pay more for the product than the cost of the inputs

Question 5

stages of the operating process

Answer 5

1. converting a consumer need into a product that can be produced efficiently
2. organising operations so that production is carried out
3. deciding on suitable production methods
4. setting quality standards and checking if they are maintained

Question 6

how to calculate labour productivity

Answer 6

total output in a given time period divided by total workers employed

Question 7

how to calculate capital productivity

Answer 7

output divided by capital employed

Question 8

how to raise productivity levels

Answer 8

1. improve training of staff to raise skill levels
2. improve worker motivation
3. purchase more technologically advanced equipment
4. more efficient management

Question 9

labour and capital intensive

Answer 9

labour intensive: involving a high level of labour input compared with capital equipment

capital intensive: involving a high quantity of capital equipment compared with labour input

Question 10

factors that determine whether to use labour or capital intensive

Answer 10

1. the nature of the product and the product image that the frim wishes to establish
2. the relative prices of the 2 inputs- if labour costs are high then using capital equipment is justifiable
3. the size of the firm and its ability to afford expensive capital equipment