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Business studies > Operations > Flashcards

Operations Flashcards

1
Q

Explain added value

A

The difference between what a business spends to produce its goods or service, and the price customers are willing to pay

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2
Q

How do you calculate added value

A

The selling price - the cost of bought in materials and components

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3
Q

Explain what’s meant by innovation

A

Altering an already existing product

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4
Q

Explain what’s meant by research

A

Work done to see how you could improve a product

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5
Q

Explain what’s meant by development

A

Physically improving the product from the research you have conducted

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6
Q

Explain the reasons for innovation, research and development within a business and industry

A

Improve productivity
Increase competitiveness
Improve brand recognition
Increase turnover
Improve profitability
Changing external factors

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7
Q

Explain product innovation

A

Developing existing products to differentiate it from their competitors

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8
Q

Explain process innovation

A

Finding a new or better method of production to increase: efficiency, productivity, reduce costs +waste and to improve quality

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9
Q

Evaluate the disadvantages of innovation

A

Time consuming
Initial costs
Staff motivation

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10
Q

Evaluate the advantages of innovation

A

Improved productivity
Reduced costs
Increased competitiveness
Improved brand recognition
Increased turnover and profitability

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11
Q

Explain job production

A

Production items that meet specific needs of customers

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12
Q

Explain batch production

A

May similar items are produced together

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13
Q

Explain flow production

A

Continuous movement of items through production processes (when one task finishes the next one starts immediately)

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14
Q

Explain cell production

A

Workers split into teams to work on a part of the production process

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15
Q

State advantages of job production

A

Meets customers needs
High quality
Higher job satisfaction
More flexibility

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16
Q

state disadvantages of job production

A

No economies of scale
Higher costs
Requires skilled labour
Difficult costing

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17
Q

State advantages of batch production

A

Reduces unit costs
Can still address customer needs
Faster than job production
Some economies of scale
Some flexibility

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18
Q

State disadvantages of batch production

A

Time can be lost switching batches
Need to keep stock of raw materials
Can be de-motivating
Money is tied up in storage

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19
Q

State advantages of flow production

A

Continuous
Economies of scale lowers the cost of production
Division of labour and specialisation

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20
Q

State disadvantages of flow production

A

Difficult to alter the production o=process
Employee boredom
High set up costs
Can’t address customer needs

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21
Q

State advantages of cell production

A

Workers become multi-skilled and adaptable
Greater workers motivation
Can lead to efficiency
Quality improvements

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22
Q

State disadvantages of cell production

A

May not allow firms to use their machinery as intensively, meaning output will be lower
Greater investments required in new management and control process
May be rivalry between different cells and conflict may arise

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23
Q

Explain specialisation

A

Where workers perform specific tasks

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24
Q

Explain division of labour

A

The allocation of workers into specific tasks, intended to increase productivity

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25
Q

Explain the reasons for the introduction of specialisation and division of labour into a business

A

It’s introduced for the intention that worker productivity and efficiency will increase therefore lowering business costs. This creates a larger profit for them

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26
Q

Explain the advantages of division of labour

A

Workers become more efficient
Output increases whilst lowering business costs
Improves the profit margin

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27
Q

Explain the disadvantages of division of labour

A

Tasks may become repetitive so workers become de-motivated and less efficient
If talks are small and repetitive, automation may take over resulting in redundancies

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28
Q

Explain project management

A

The act of planning, organising and managing a project in order to achieve a predefined outcome or goal

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29
Q

Explain why businesses use project management

A

It helps every part of the business run more efficiently and effectively

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30
Q

Explain what a Gantt chart is

A

Graphical representation of the order and duration of tasks within a project

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31
Q

Explain what CPA is

A

A project management technique which shows how to complete tasks in the shortest possible time

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32
Q

Explain what PERT analysis is

A

Used to calculate the amount of time it takes to realistically finish

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33
Q

Explain the advantages of PERT analysis

A

More realistic given pessimistic views
A simple formula to apply
A lot of data can be visually represented

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34
Q

Explain the disadvantage of PERT analysis

A

It can be difficult to judge

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35
Q

Explain the advantages of a Gantt chart

A

Allows a visual representation
Easy to monitor
Shows time and resource allocation

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36
Q

Explain the disadvantages of a Gantt chart

A

Doesn’t show the critical activities
Can’t see EST and LFT
Can’t calculate float times

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37
Q

Explain the advantages of CPA

A

Helps reduce the risk and cost of complex projects
Encourages careful assessment
Better allocation of resources
Provides managers with a useful overview of the project
Allows resources to be delivered just in time (JIT)

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38
Q

Explain the disadvantages of CPA

A

Reliability is largely based on accurate estimates
Doesn’t guarantee success of the project
Resources may not be as flexible as the management hope

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39
Q

Explain what’s meant by productivity

A

The volume of output by each employee

40
Q

How to calculate measures of productivity

A

Output / number of machines
Output / input

41
Q

Explain the advantages of high productivity

A

Helps a business become more competitive
Same output with less units of labour, reduces costs
Encourages investment as productivity’s a measure of performance

42
Q

Explain the disadvantage of productivity

A

If units of labour are reduced, it may lead to job insecurity and make management harder

43
Q

State ways to improve productivity

A

Setting targets
Motivation techniques
Investing in technology
Staff training
Division of labour

44
Q

Explain what is meant by economies of scale

A

Unit costs falls as output rises

45
Q

Explain what’s meant by diseconomies of scale

A

Unit costs rise as output falls

46
Q

Explain what’s meant by internal economies of scale

A

Achieved as a result of a firm growing internally

47
Q

Explain what’s meant by external economies of scale

A

Benefits the whole industry not just one firm

48
Q

Types of internal economies of scale

A

Technical - gain the benefit of buying more effective capital equipment
Managerial - employ specialist managers
Marketing - use most effective marketing methods
Purchasing - buying raw materials in larger quantities
Financial - negotiate cheaper loans
Risk-bearing - spread risk by diversifying into different products

49
Q

Explain capacity utilisation

A

The percentage of total capacity that’s actually being achieved in a given period

50
Q

Explain capacity management

A

Managing the available capacity to ensure that resources are used optimally

51
Q

Explain advantages of capacity utilisation

A

Average unit costs fall
Less wastage of resources
Employee motivation
Stakeholders view businesses as favourable

52
Q

Explain disadvantages of capacity utilisation

A

Competition
Seasonality
Alternative products
Maintenance and breakdowns
Additional orders can’t be done

53
Q

How to reach full capacity

A

Reduce stock room size
Increase demand for your products
Differentiate the product

54
Q

Explain stock control

A

Processes and controls used by a business to ensure that it has sufficient stock for its purpose

55
Q

Explain just in time

A

Allows stock to fall to zero as no need of time to replenish stock

56
Q

Explain advantages of just in time

A

Lower stock holding means less costs for storage
Less likely of stock perishing
Less time spent on checking and re-working the product

57
Q

Explain disadvantages just in time

A

Little room for mistake as minimal stocks kept for re-working faulty products
If not delivered on time, can cause the whole production to be delayed
No spare finished products to meet unexpected orders

58
Q

Explain lean production

A

Focuses on cutting waste whilst ensuring quality and improving efficiency

59
Q

Explain why lean production is used

A

Doing the simple things better
Doing things better
Involves employees in the continuous improvement

60
Q

Explain ergonomics

A

Looks at the relationship between the employee and the capital equipment being used

61
Q

Explain kaizen

A

Improvement in quality as an ongoing phenomenon and not something that takes place occasionally

62
Q

Explain total quality management

A

The efficient usage of all resources used within the production process, on finding ways to prevent mistakes rather than inspecting for mistakes

63
Q

Explain time based management

A

Attempt to reduce the time taken between the generation of the idea for a product and it going into production

64
Q

Explain Kanban

A

Helps to organise the flow of components onto the production line at the right place and at the right time

65
Q

Explain jidoka

A

A process for building into the production an ability to detect and reject faulty goods and components at the earliest time

66
Q

Explain how technology can be applied in the operations of a business

A

Technology could be used in the production of their products through buying machines which can replace workers and they do the same job

67
Q

Explain advantages of technology ina business

A

Cuts employment costs
More efficient than workers
Can be the most up to date software so would be efficient

68
Q

Explain disadvantages of technology in a business

A

May break which adds costs for replacing it
May not be reliable
High costs to begin with when buying the machinery

69
Q

Distinguish quality control

A

The process of checking the quality of products for any faults

70
Q

Distinguish quality assurance

A

Processes that ensure production quality meets the requirements of customers

71
Q

Explain reasons for quality control and quality assurance in a business

A

Make sure theirs no faults in products which reduces the chance of customers wanting refunds, maintains a good reputation

72
Q

Explain why total quality management is used in a business

A

Helps organisations identify skill deficiencies in employees along with necessary training that’s required

73
Q

Explain reasons for training employees in a business

A

They will be more efficient
Less likely to make mistakes, meaning that no resources are wasted

74
Q

Explain BS 5750 kitemark

A

Rewarded to businesses that adopt certain quality procedures

75
Q

Explain ISO9000 European standards

A

Member states are obliged to make them and remove ones that might conflict it

76
Q

Explain quality benchmarking

A

The general approach to business improvement based on the the best practice in the industry and it allows them to see where they fall short against competitors

77
Q

Explain the factors affecting the choice of location for a business

A

Labour costs - vary from location to location
Land costs - location can affect the price of warehouses etc
Proximity to raw materials - transport costs are reduced if you’re closer to them
Labour skills - where specialist skills are required
Site suitability - some may need particular characteristics to maximise customer satisfaction
Potential expansion - future production capacity has to be taken into account

78
Q

Evaluate the impact and importance of location to a business and stakeholders

A

If they are far from materials it could increase the costs for the business or if they dont have the correct warehouse they could have to spend more money on getting the correct facilities

79
Q

Explain what’s meant by logistics

A

The movement of good from one pace to another, meaning two functions transportation and warehousing

80
Q

Explain supply chain management

A

The handling of the entire production flow of a good or service to maximise quality,delivery, customer experience and profitability

81
Q

Explain distribution management

A

The process used to oversee the movement of goods from supplier to manufacture to wholesaler or retailer and end up at the consumer

82
Q

Explain the role of warehousing

A

The process of storing physical inventory for sale or distribution

83
Q

Explain the role of distribution centres

A

The handle receiving from manufacturers or wholesalers and organising them o be shipped to the customer

84
Q

Evaluate factors affecting logistical decisions

A

Demand characteristics (eg seasonal)
Logistic costs (transport + warehousing)
Product characteristics

85
Q

Explain offshoring logistics

A

Moving manufacturing or other business processes overseas

86
Q

Explain advantages of offshoring logistics

A

Lower labour costs
Access skilled labour
Access to global marketplace

87
Q

Explain disadvantages of offshoring logistics

A

Time zone differences
Quality control issues
Cultural and language barriers

88
Q

Explain restoring logistics

A

Bringing back outsourced personnel and services back to the home location from where they were from

89
Q

Explain advantages of resourcing logistics

A

Better control over supply chain
Improves product quality
Enhances innovation

90
Q

Explain disadvantages of resourcing logistics

A

Can’t use cheap about so higher costs
Few skilled workers available
Expensive process to bring the production back

91
Q

Explain outsourcing logistics

A

When a company uses an external provider to handle various supply chain functions

92
Q

Explain advantages of it sourcing logistics

A

Controlled costs
Increased efficiency
Share the freight costs

93
Q

Explain disadvantages of outsourcing logistics

A

Loss of control
Unavoidable costs
Strategic misalignment

94
Q

Explain subcontracting logistics

A

Hiring an outside firm or individual to complete specialised tasks that can’t be done internally

95
Q

Explain advantages of subcontracting logistics

A

Helps with large projects
Increased productivity
They have specialised knowledge

96
Q

Explain disadvantages of subcontracting logistics

A

Lack of control
Increased costs
Lowering of standards

Business studies (9 decks)

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