Operations Flashcards
Added value
The difference between the selling price of a finished product and the cost of inputs involved in making it.
selling price per unit - variable costs per unit.
Kob production
Producing a one-off item that has been tailor-made to suit a specific customer.
Batch production
Manufacturing a limited number of identical products, completing work for the whole batch before moving to the next stage.
Flow production
Continuous production on production lines, allowing a large quantity of identical products to be made.
Labour productivity
Measured by dividing the total output by the average number of employees over a period of time.
Total output per period of time/Average number of employees per period of time
Capacity utilisation
A measure of the extent to which the productive capacity of a business is being used, expressed as a percentage.
actual output/maximum possible output x 100.
Lean production
Aims to remove waste from the production process, increasing productivity and reducing costs.
Kaizen
Continuous improvement, encouraging employees to make regular small changes for better waste reduction, productivity, and quality.
Just in time (JIT)
ensures that parts, raw materials, and components are received only when needed, and products are made only when ordered. Minimises stock holding
Cell production
The production line is subdivided into cells (teams), allowing workers to fulfil multiple tasks and enabling job rotation.
Time-based management
Emphasis on reducing the time taken in all aspects of the production process.
Quality control
based on inspection by quality inspectors of a sample of finished products. Quality checking occurs at the end of the production process.
Quality assurance
Quality assurance is a system of agreed quality standards at each stage of production, focusing on the prevention of poor quality.
Total Quality Management
a managerial approach that focuses on quality and aims to improve the effectiveness, flexibility, and competitiveness of a business. E.g empowerment and benchmarking
Benchmarking
setting a target in terms of quality standards based on competitors or best performing areas of the business.
Stock control
The management of raw materials in a business, including work-in-progress and finished goods
Reorder level
The level of stock at which a new order is placed.
Reorder quantity
quantity ordered to return the stockholding to maximum level, measured by the difference between maximum and minimum stock holding levels.
Lead time
The amount of time that elapses between placing an order and the delivery of that order.
Buffer stock
The amount of stock held below the minimum stock level and zero stock, held for unforeseen rises in demand.
Minimum stock level
Minimum stock level is the lowest amount of stock the business wants to hold.
Innovation
The creation of a new product or an improved version of a current product or service & the commercial exploitation of an invention.
Computer design software (CAD)
Enables businesses to create products on-screen, allowing products to be tested on-screen.
Research and development
Research is the inquiry into and discovery of new ideas, while development is the process that changes ideas from research into commercially viable products and processes.
