nature of operations Flashcards
what is intellectual capital
intangible capital of business
includes human capital—>well trained + knoelwdgble
and structural capital –> data base + info system
and relation capital –? good links w supplier
whay is production process
and what does it invlove
process of providing good or service to satisfy want + needs
process invlvoes –? providing for input —processing them –>forming them into outputs
explain the opperstion quality
opperations dep –> make sure effective quality systems placed
- endure possible defects avoided+ customers given best possible standards
production process is also known as
transformation process as raw material transformed into finshed goods
what are the factors/opperations that add value
- effeciency
- flexibilty + innovation
- quality
explain the opperation efecincy
opperations dep —> ensure resrouces are being untiized w min possible wastage
will cut down expenses
recudce production costs
explain the oppertion
operaions dep to ensure opperations mananged in flexible way—> to
able to change quanitty
change variety of production if needed
will help min waste
save material cost of the business
define productivity
measure of the quanitity of output—> that firm produces in a given time period
hoe effeceintly inpits converted into outputs
what is the imp of productivity
it is v imp for bsts to utilze their resrouces in most effecient way
- cuts down expenses + other costs
- impact on profit margins in long term
- reduces deffective products making
- customer satisfaction rate increase + less chanve of cusmtomer getting a deffected product
-saves cost of dealing w customers complaints
- fall in avg cost per unit
- cut down on final prcies
- make bst more competitive in market
how to improve productivity
improve raining of employees –> increase skills
- introduce new tech
- improve inventory control
- training
- improve employee motivation
why is improving productivity not asnwer to all problems
1) if product not popular within custmers –> no use of increaseing productivity
2) when increasing producitivty–> less labor required –> lead to downsizing
3)greater efforts from workers to increase productivity–> higher wage demands —> increase in costs
4) opperations considred more subcessful if effecient + effective
jusr efficent not solution
define labor productivity
what is the difference btween effecient + efective
effeicent = measued by producitivty
effective = acheived if cusmtoers demands satisfied
what does sustainabilitty in opperations mean
when bst opperations can be maintained in long term
- can protect environment
- not dmamage quality if life for future genrations
how to be more sustainable
reduce plastic use
reduce energy use
reduce carbon emmisiions
reduce wastage from opperations
recude use of other biodegradable materials
manufacture products –> that are recyclble
use recylced material
what are the benifits of being sustainable
- operating in sustanable way help bst –>
- maintainb good public image
- avoid attention of pressure grps + media +govt
-since soceity noe highly regards bsts that focus on sustainability in opperations —> can be used as marketing tool
helps establish brand stronger
charge premium price
- attract new customers
- differentate then from competitive bsts
what are the costs of being sustainable
require capital investments intially -solar panels
environmentaly friendlymaterials –> cost more + avg c.o,p high
development of recyble products–> expensive + time consuming
what are the factors that deterine labor or capital intensive bst?
nature of product –> that needs to be produced
- tailor made then labor intensive
scale of production —> larger scale – more feasable to use capital intensive
financial position + affordability —> if financial posotion strong –> captual intensive
COP and productivity of labor + capital
- if labor cost high –> go for capital intsneive –> as tech costs may be lower
product range that needs to be produced
what are capital intensive benifits
- can work 24/7
- consistent quality of work
- can do dangerous + unpleasent work
- dont need breaks
- more productive than labor–> produce more output per hour
less imp of tu
reduce dependancy on labor
what are capital intensicve costs
- need to be maintained
- can bvreakdown –> if d0–> can halt production
- intial cost high
- can only be used for tasks desinged to do
- need huge preimises o accomadate machinery + equuipment
what are labor intensive benifits
workers can learn new skills
more felxible –>workers can be used for many different tasks
benigit from premium prive from labels such as handcrafted goods
personal services
what are labor intensive costs
wage cost
work limited time due to human capacity
can get ill –> take off –> will disturb production
t.u issues –> create problems for bst
mention the production methodds
job
batch
flow
mass
what does production invlove
adding value to inputs –> so outputs can be sold for profit
what is job prodiuction
- single product made at a time
- make to order
- every induvudual product has to be completed before the next product is staerted
- product made to meet specific requiements of a consumer
- typically performed by skilled experts –> high standards
alllows for flexibility + customization in finished goods
what are advantages of job production
- products can be customized to meet consumer requierements
- staff is highly skilled –> quality is high
production is varried + flexible –> wokrers find work intersting + stay motivated
- can charge premium price for tailor made products –> customers willing to pay higher prices
- personal services
what are disadvantages of job production
- production is time consuming
- expensive machinery may remain idle for too long
- costs high bec production is labor intensive
- any errors made –> difficult to correct
what is batch production
quaunity of one product is made then quanitity of another item is produced
- used to produce similar products
- invlvoes distinct stages
- every unit in natch must go through an induvidual production stage before batch moves as a whole towards next stage
what are the advantages of batch production
- variety of work for workers
- lower unit cost then job
- ecos of scale obtained
- flexible prodcution-tailored to meet needs of customers
- quicker than job productiob becuase made in grps
- work gets less affected in case of machinery breakdown
what are the disadvantages of batch production
- stock lvls needed as more work in progress
- staff motivation less bec work less skilled than job
- hige space requitred for staorage purposes
- downtime needed btw batches to adjust machinery
what is flow production
large quanitities of product produced –> in a continious process
- also known as mass prodution
- induvdiual product is moved from stage to stage as soon as it gets ready w/o having to move for any other product
what are the adv of flow prodcution
- production is standardized + quality is consistent
- use of automation–> thus production can operate continiously
- ecos of scale
unit cost low –> since fixed cost is spread over large no of units
-
what are the disadvantages of flow prodcution
boring system for workers
motivation lvl low bec repetitive tasks
huge storage space required
capital cost for automation too high
inflexible production= cannot be altered to meet specfic needs
what does mass customization mean
mixture of job + flow prodcution
allows products to be mass produced + adapted to induvidual requirements
use of cmputer aided prodcution system
what are adv of mass customization
unit cost low
products can be customized
what are disasv of mass customization
heavily dependant on new tech —> so initial costs high
expensive + flexible capuital needed
factors that influence what type of production method a firm should adopt
1) Size of market
if marke size small for desingers —> job production
if market seize large for identical product –> that is consistent trhough out year –> flow production
if market size huge for large no of years BUT at different times of year –> batch production
2) ammount of capital available
higher affordability power of bst –> larger the prouction method bst can use
3)availabilty of other resrouces
- skilled labor
location
4) Neeed for adaptability in production process
- bst will have to consider how much variety they want to produce + how much variation they want in product —> in order to meet customer requirements
what are the changing probelms from JOB to BATCH
- cost of equipment needed to handle large no in each batch high
additional working capital needed –> to finace work in progress inventory
- risk of worker demotivation –> less skill for induviduals craft skills
what are the problems of changing from JOBor BATCH TO FLOW
