Operations Flashcards
What are the 6 operational objectives?
Lower Unit Cost
Improve quality
Response speed/flexibility
Create added value
Environmental
Dependability
Reduce unit cost obj.
higher profit margin
increase scale= eos
Improve quality obj.
increase customer satisfaction
increase rep
lower price sensitivity
Response speed/flexibility obj.
adapting to change
fulfilling orders quick
delivery met
Create added value obj.
increase profit margin
Environmental obj.
consider community
pollution produced
Dependability
customer needs/wants met?
average unit cost formula?
total costs/ units produced
labour productivity formula?
total output/ no. of employees
How to increase labour productivity?
training
reward system
tech
management
costs of capacity
equipment
facilities
labour
Capacity Utilisation formula?
actual output/ maximum output x100
actions if capacity utilisation is low?
reduce capacity size
increase sales
actions if capacity utilisation is high?
outsource
reduce demand short term
Adding Value- definition
the EXTRA value a business creates through production, distribution or marketing process
Efficiency- definition
production maximised based on given level of factors of production (CELL)
Importance of increasing efficiency?
reduce unit costs- increase price (demand)/profit margin
use efficacy gains- increase quality/wages(motivation)
How to improve efficiency?
-use capacity better
-increase labour productivity
-lean production
Drawbacks of improving efficiency?
Cost of training
Investment costs
Waste/lack of demand
Quality expectations
Performance
Appearance
availability
reliability
value for money
Benefits of good quality
Customer satisfaction
repeat purchase
customer recommendation
low market cost
customer loyalty
Quality Assurance
Maintenance of target quality by attention at every stage of the process
Quality Control
Maintaining standards by inspecting output for quality
Capacity
Maximum output a business can produce/handle
