Nature of Operations

Question 1

Intellectual capital

Answer 1

The intangible capital of a business including human capital, structural capital and regional capital

Question 2

Transformational process

Answer 2

Activities that transforms inputs, adds value to them and produces outputs to consumers

Question 3

Factors contributing to operations managers adding value

Answer 3

-Efficiency of production
-Quality of product
-Flexibility and innovation

Question 4

Factors contributing to operations adding value that are non management issues

Answer 4

-The design of the product
-The efficiency of operations
-Branding to encourage consumers to pay more for the product than inputs

Question 5

Productivity

Answer 5

The ratio of outputs to inputs during production

Question 6

Level of production

Answer 6

The number of units produced during a period of time

Question 7

Labour productivity

Answer 7

total output in a given period
________________________________

total workers employed

Question 8

Main ways to increase productivity

Answer 8

-Improve the training of employees to raise skill
-Improve worker motivation
-Purchase technologically advanced equipment
-More effective management

Question 9

Reasons productivity doesn’t guarantee success

Answer 9

-Product maybe be unpopular w consumers
-Greater effort for workers leads to greater demand for higher wages
-Workers may resist measures to raise productivity
-The quality of the management maybe low

Question 10

Efficiency

Answer 10

Producing output at the highest ratio of output to input

Question 11

Effectiveness

Answer 11

Meeting the objectives of the business by using inputs productively to meet customer needs

Question 12

Sustainability of operations

Answer 12

Business operations that can be maintained in the long run

Question 13

Benefits of increasing sustainability

Answer 13

• Reducing energy use can reduce energy costs
  -Reducing use of plastic and non-biodegradable materials will attract more demand from green consumers
  -Reducing waste from operations will also reduce production costs
  -Making recyclable products reduces the cost waste disposal

Question 14

Limitations of increasing sustainability

Answer 14

-Increasing sustainability might require capital investment
-Recycled materials might need to be cleaned or processed before use
-Development of recyclable products can be expensive and time consuming
-Increasing sustainability might need investment in worker training and more accurate equipment

Question 15

Labour intensive

Answer 15

Involving a high level of labour input compared with capital equipment

Question 16

Capital intensive

Answer 16

Involving a high quantity of capital equipment compared with labour input

Question 17

Benefits and Limitations of labour intensive

Answer 17

-Interesting and varied work
-Low machine costs
-One off designs meet customer requirements such as exclusive furniture

-Low output levels
-Skilled and high paid workers required
-Product quality depends on the skill and experience of the worker

Question 18

Benefit and Limitations of capital intensive

Answer 18

-Economies of scale
-Consistent quality
-The ability to supply the mass market

-Cost of financing the equipment
-High maintenance costs and the need for skilled workers to do repairs
-The quick pace of technological change, which can make existing machines outdated

Question 19

Job production

Answer 19

The production of a one-off item specially designed for the customers

Question 20

Batch production

Answer 20

The production of a limited number of identical products

Question 21

Mass customisation

Answer 21

The use of a flexible computer aided technology on productions lines to make products meet customers requirements for customised products

Question 22

Flow production

Answer 22

The production of items in a continually moving process

Question 23

Factors that influence which production method to use

Answer 23

-Size of market
-The capital available
-Customers demand products adapted to specific requirements
-Other resources

Question 24

Problem with changing job to batch production

Answer 24

-The cost if equipment needed to handle large numbers maybe high
-Additional working capital is needed to finance work in progress inventory
-Risk of worker demotivation because of less need for individual craft skill

Question 25

Problem with changing batch production to flow

Answer 25

-The cost of capital equipment iOS high
-Employee training needs to be flexible and multi-skilled
-Accurate estimates of future demand are needed to ensure that output matches demand