Operations Flashcards
Intellectual capital
Intangible capital of a business that includes human capital, structural capital and relational capital
Production
Converting inputs to outputs
Level of production
Number of units produced during a period
Productivity
The ratio of outputs to input during production
Efficiency
Producing output at the highest ratio of output to input
Measured by productivity
Effectiveness
Meeting the objectives of the enterprise by using inputs productively to meet customers needs
Labour intensive
Involving a high level of labour input compared with capital equipment
Capital intensive
Involving high quantity of capital equipment compared with labour input
Operations planning
Preparing input resources to supply products to meet expected demands
Computer aided design – CAD
Use of computer programs to create two or three dimensional graphical representations of physical objects
Computer aided manufacturing – CAM
Use of computer software control machine tools and related machinery in the manufacturing of components or complete products
Flexibility
The ability of a business to vary both the level of production and the range of products following changes in consumer demand
Process innovation
Use of a much improved/new production method/service delivery method
Job production
Producing a one off item specially designed for the customer
Batch production
Producing a limited number of identical products, each item passed through one stage of production before passing onto the next stage
Flow production
Producing items in continuously moving process
Mass customisation
Use of flexible computer aided production systems to produce items to match individual customers requirements at mass production cost level
Optimal location
Business location that gives the best combination of quantitative and qualitative factors
Quantitative factors
Measurable in financial terms and will have a different impact on either the cost of the site or the revenues from it and its profitability
~ labour costs
~ transport cost
~ sales revenue potential
Qualitative factors
Non measurable factors that may influence business decisions
~ safety
~ ethical considerations
~ environmental concerns
~ room for expansion
Off shoring
Relocation of a business process done in one country to the same or another company in another country
Multinational
Businesses which operate in production bases in more than one country
Trade barriers
Taxes/limitations on free international movement of goods and services
Scale of operation
Maximum output that can be achieved using the available inputs at that scale - can only be increased in the long term by employing more of all inputs
Economies of scale
Reduction in a firms unit average cost of production that results from an increase in scales of operations
Diseconomies of scale
Factors that cause average cost of production to rise when scale of operation is increased
Causes:
~ communication
~ alienating workforce
~ poor co-ordination
Solutions :
> MBO
> decentralisation
> reduce product diversification
Supply chain
All of the stages in the production process from obtaining raw materials to selling to the consumer
Enterprise resource planning
Use of a single computer application to plan purchase and use of resources in an organisation to improve efficiency of operation
Sustainability
Production system that prevents waste by using the minimum of nonrenewable resources so that levels of production can be sustained in the future
Inventory
Materials and good required to allow for the production and supply of products to the consumer
Economic order quantity
Optimum/least cost quantity of stock to re-order taking into account delivery cost and stockholding cost
Buffer inventory
Minimum inventory level that should be held to ensure the production could still take place should a delay in delivery occur or should production rates increase
Re-order quantity
Number of units ordered each time
Lead time
Normal time taken between ordering new stock and the delivery
Just-in-time – JIT
Inventory control method aim is to avoid holding inventory therefore requiring supplies to arrive just in time just as they are needed in production and completed products are produced to order
Labour productivity
Total output in a given time
Total workers employed
Capital productivity
Output
Capital employed
