Operations #1

Question 1

transformation process

Answer 1

conversion of inputs into outputs

Question 2

value adding

Answer 2

the creation of extra or adding value as inputs are transformed into outputs

Question 3

minimising waste

Answer 3

detecting where inefficiencies are and correcting them

Question 4

ethical sourcing

Answer 4

refers to business practices of sourcing from suppliers that engage in ethical conduct such as the payment of fair wages and the use of environmentally friendly practices

Question 5

profit centres

Answer 5

aspects of a business that directly derives revenue and profits

Question 6

cost centres

Answer 6

particular areas, departments or sections of a business to which costs can be directly attributed

Question 7

cost leadership

Answer 7

aiming to have the lowest costs or to be the most price-competitive in the market. A key aspect to cost leadership is that although trading with the lowest cost, the overall business should still be profitable

Question 8

economies of scale

Answer 8

the cost advantages that can be created as a result of an increase in scale of business operations. Typically the cost savings come from being able to purchase lower cost per unit of input and from efficiencies created through improved use of technology and machinery.

Question 9

standardisation

Answer 9

refers to the marketing of products that are homogenous or identical

Question 10

product differentiation

Answer 10

means distinguishing products in some way from those of competitors

cross branding - adds value to products by offering consumers added benefits from a cross-branding arrangement

Question 11

standardised goods

Answer 11

those mass produced, usually on an assembly line

Question 12

customised goods

Answer 12

those that varied according to the needs of customer. these goods are produced with a market focus rather than a production focus

Question 13

intermediate goods

Answer 13

goods that may be processed more than once

produce milk - can also produce cheese later

Question 14

drip pricing

Answer 14

means that a business advertises one price but in the process of a customer purchasing the service numerous additional charges and costs are added. The effect is that the final price can be much higher than the price advertised. Drip pricing has been an issue in relation to airline ticketing and travel products sold online

Question 15

interdependence

Answer 15

the mutual dependence that the key business functions have on one another

Question 16

globalisation

Answer 16

refers to the removal of barriers of trade between nations. Globalisation is characterised by an increasing integration between national economies and a high degree of transfer to capital, labour, intellectual capital and ideas, financial resources and technology

Question 17

supply chain

Answer 17

refers to the range of suppliers a business has and the nature of its relationship with those suppliers

businesses require a very predictable and reliable supply chain that is highly responsive to changes in demand as experienced by the business

Question 18

global web

Answer 18

refers to the network of suppliers a business has chosen on the basis of lowest overall cost, lowest risk and maximum certainty in quality and timing of supplies

Question 19

technology

Answer 19

the design, construction and/or application of innovative devices, methods and machinery upon operations processes

Question 20

cost-based competition

Answer 20

derived from determining breakeven point and applying strategies to create cost advantages over competitives

Question 21

break even point

Answer 21

the level at which the firm’s total revenue is exactly equal to its total costs

Question 22

fixed costs

Answer 22

those that are not dependent on the level of operating activity in a business. They do not change when the level of activity changes – they must be paid regardless of what happens in the business

Question 23

variable costs

Answer 23

those that vary in direct relationship to the levels of operating activity or production. This includes labour costs and costs of energy

Question 24

compliance costs

Answer 24

the expenses associated with meeting the requirements of legal reputations

Question 25

environmental sustainability

Answer 25

means that business operations would be shaped around practices that consume resources today without compromising access to those resources for future generations

Question 26

precautionary principle

Answer 26

requires that, where environmental impacts are uncertain, a business undertake actions that are most likely to cause least environmental impact

Question 27

CSR (corporate social responsibility)

Answer 27

refers to open and accountable business actions based on respect for people, community/society and the broader environment. It involves businesses doing more than just complying with the laws and regulations

Question 28

triple bottom line

Answer 28

refers to the financial profitability, social impact and the environmental impact of a business

Question 29

intermediate goods

Answer 29

goods that may be processed more than once. if a product has gone through one set of operation processes, then the output can then be processed through another set