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Business Studies > Operations > Flashcards

Operations Flashcards

1
Q

What sort of objectives would operations management set?

A
  • productive targets

- quality targets

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2
Q

What things must management take into account when setting operations objectives?

A
  • size of the business
  • other objectives of the business
  • state of economy
  • level of competition
  • government
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3
Q

What factors may have an impact on operations management?

A
  • social factors
  • ethical factors
  • environmental factors
  • legal factors
  • economic factors
  • political factors
  • technological factors
  • international factors
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4
Q

What is added value?

A

The difference between the actual price charged for a product and the cost of producing that product.

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5
Q

How might a business add value?

A
  • customer service
  • additional features
  • delivery service
  • quality
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6
Q

What are the advantages of addedvalue to the business?

A
  • able to charge a higher price
  • higher level of profit
  • enable the business to target its chosen market more easily
  • USP
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7
Q

What are the benefits to stakeholders of added value?

A
  • consumers gain additional service
  • increases value for money
  • consumers will more likely go back and shop there
  • shareholders at benefit as profit increases dividends increase
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8
Q

What is innovation?

A

Introduction of a new idea, method of production or new equipment into the production process.

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9
Q

What is research and development?

A

Process that enables the creation of new or improved products to meet the needs of its consumers.

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10
Q

When is R&D essential?

A

It is vital in a highly competitive market, helps a business survive

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11
Q

What are the problems with R&D?

A
  • costly
  • risk
  • copying from other businesses
  • limited protection of new ideas
  • hard to keep up with changes in technology
  • constant changes may annoy consumers
  • unemployment
  • technological changes
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12
Q

What is product orientation?

A

Means the business concentrates its activities on improving the quality or efficiency of the product

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13
Q

What is a morphological study?

A

A study that generates a lot of ideas very quickly and therefore more cheaply.

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14
Q

What are the three aspects of value analysis?

A
  • function
  • cost
  • aesthetics
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15
Q

What is the hardest thing about value analysis?

A

Balancing the three aspects

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16
Q

In value analysis where does the most important factor go?

A

At the top of the triangle

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17
Q

What factors affect research and development?

A
  • level of competition in the market
  • product
  • external environment
  • state of the economy
  • responding to a particular problem
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18
Q

What is job production?

A

Involves producing a single item or product.

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19
Q

What is job production usually concerned with?

A

Satisfying a consumers specific needs

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20
Q

What are benefits of job production?

A
  • meet customer needs exactly.
  • high quality
  • easier to motivate workers
  • flexibility
  • little stock is tied up
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21
Q

What are the limitations of job production?

A
  • no opportunities of economies of scale
  • higher costs
  • labour is more skilled
  • difficult to gauge the costs
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22
Q

What is batch production?

A

Where there is a set procedure and stages that the production process needs to go through. One stage needs to be be completed before another stage can be started.

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23
Q

What are the benefits of batch production?

A
  • able to produce large quantities
  • may be some economies of scale
  • faster than job production
  • more flexibility than flow production
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24
Q

What are the limitations of batch production?

A
  • time delay between batches
  • downtime reduces output
  • higher stock levels
  • storage space for products
  • less variety of work
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25
Q

What is flow production?

A

provides a continuous process, utilising a conveyor belt approach, whereby the product is assembled on a production line with employees undertaking specific repetitive tasks for each stage of the individual processes

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26
Q

What are the benefits of flow production?

A
  • economies of scale
  • can benefit from division of labour
  • little downtime
  • costs low
  • offer more opportunities for specialisation
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27
Q

What are the limitations of flow production?

A
  • high set up costs
  • considerable amount of planning required
  • lacks flexibility
  • if the line stops the whole output is stopped
  • any fall in demand will make the process uneconomical
  • less motivated workers
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28
Q

What is cell production?

A
  • production system that has employees working in teams, who are responsible for the whole production for a given product
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29
Q

What are the disadvantages of cell production?

A
  • expensive to set up
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30
Q

What are the benefits of cell production?

A
  • improved working conditions
  • incentive to ensure high quality
  • encourages a sense of responsibility
  • opportunity for job rotation
  • allows the employees to set their own pace of work
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31
Q

What is division of labour?

A

When the job or task is broken down into separate tasks

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32
Q

What is the impact of division of labour on the stakeholders of the business?

A
  • increased efficiency
  • suppliers may benefit from supplying more components to the business
  • employees may be bored by repetitive work
  • customers may be able to buy at lower prices
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33
Q

What needs to be taken into account when changing the method of production?

A
  • nature of the product
  • actual cost of the machinery
  • budgets
  • practical ability to change
  • support of the workforce
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34
Q

What is the impact of choosing a specific method of production?

A
  • may require additional capital equipment

- may require laying off or hiring more workers

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35
Q

What is project management?

A

Process which involves planning and organising activities using resources to help achieve the objectives of the business

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36
Q

What is critical path analysis?

A

The process that allows for the overall time of a project to be calculated

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37
Q

How do you calculate the earliest starting time? In CPA?

A

Add the length of the previous activity to the length of the current activity.

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38
Q

If two activities are going into one node what answer do you take for the EST and why?

A

Take the highest value as BOTH activities have to be completed before moving onto the next activity

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39
Q

What is the LFT?

A

Refers to the latest time in which an activity can be completed without causing a delay to the next activity

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40
Q

How do you calculate LFT?

A

LFT of previous activity - duration of activity.

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41
Q

When 2 activities flow into one what value do you use for the LFT?

A

The lowest value as a result of the subtraction or you minus the largest number

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42
Q

What is the critical path?

A

Where EST and LFT are the same

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43
Q

What is a dummy activity?

A

One that’s has no significant time but is an essential link between other activities.

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44
Q

What are floats?

A

Shows how much time an activity may be delayed before it has an effect on either the next activity or project as a whole.

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45
Q

What are the two types of float?

A
  • Total float

- Free float

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46
Q

What is total float?

A

Represents the longest time which any activity’s start may be delayed without affecting the length of the project as a whole

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47
Q

How do you work out total float?

A

LFT of an activity - duration of activity - EST of the activity

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48
Q

What does free float refer to?

A

The effect upon The next activity and not the project as a whole

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49
Q

How do you work out free float?

A

EST of next activity. - duration of the activity - EST at the start of the activity

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50
Q

If the free float is 1 what does that mean?

A

Means the next task can be delayed by one day before it will affect the start of the next activity.

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51
Q

What can CPA be used for?

A

Used to help solve problems regarding delays.

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52
Q

What is a GANTT chart?

A

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

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53
Q

What does a GANTT chart look like?

A

It has the duration of the activities along the horizontal axis and the activity on the vertical axis

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54
Q

What are the benefits of critical path analysis?

A
  • simplistic visual form
  • simple method to calculate the shortest time in which to complete the project
  • gives a method to identify the activities which are critical
  • knowing EST allows for supplies to be delivered JIT
  • helps a business to see when cash will be needed to ensure that supplies are ready for any given activity
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55
Q

What are the limitations of CPA?

A
  • value of CPA depends upon the accuracy of the activity times
  • knowing that some activities are critical may encourage a reduction in quality in order to complete the activity on time
  • CPA only requires the timings not the costs
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56
Q

What are the benefits of the GANTT chart?

A
  • simplistic and visual representation of a project
  • easy to use for monitoring progress of a project
  • can see at glance what activity should be taking place
  • shows both time and resource allocation such as labour
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57
Q

What are the limitations of the GANTT chart?

A
  • doesn’t show what activities are the most important
  • does not show EST and LFT
  • the calculation of floats is not straight forward
58
Q

What is the difference between PERT and CPA?

A

PERT takes a more pessimistic approach to the time taken to complete various tasks within a project.

59
Q

What is the formula for PERT?

A

Estimated time:

Optimistic time + 4 x Likley time + pessimistic time / 6

60
Q

What are the advantages of PERT?

A
  • more realistic given the pessimistic view
  • simple formula to apply
  • a lot of data can be visually represented to aid decision making
  • able to see the critical path within a set of activities.
61
Q

What are the disadvantages of PERT?

A
  • requires some guesswork

- complicated to use

62
Q

How do you work out productivity?

A

Output/input

63
Q

How can productivity within a business be improved?

A
  • by using fewer inputs to achieve the same level of output
  • by an increased output using the same number of inputs
  • monitoring employees (set targets)
  • training
  • ergonomics
  • division of labour
64
Q

What is the importance of productivity to the business and its stakeholders?

A
  • lower selling prices for customers
  • competitive advantage over competitors
  • help the business be competitive in the international market
  • creditors of the business may be pleased if the business can pay of its debts
65
Q

What is internal/organic growth?

A

Natural growth of a firm achieved by increased production and sales.

66
Q

Why do business’s grow?

A
  • objectives change
  • increase market share
  • greater profit
  • higher chances of survival
  • cost reductions
67
Q

What is external growth?

A

Growth achieved by takeover and merger

68
Q

What is capacity?

A

The maximum that a firm can produce in a given period with the available resources

69
Q

What is capacity?

A

The maximum that a firm can produce in a given period with the available resources

70
Q

What is capacity utilisation?

A

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

71
Q

What are example of internal economies of scale?

A
  • purchasing
  • financial (negotiate cheaper loans)
  • managerial
  • technical (buying more effective capital)
  • marketing
  • Risk bearing (can diversify products)
72
Q

How are internal economies of scale achieved?

A

As a result of a firm growing internally

73
Q

How are external economies of scale achieved?

A

As a result of growth in the industry/

74
Q

What are examples of external economies of scale?

A
  • concentration economies

- information

75
Q

What are diseconomies of scale?

A

An increase in unit costs as a result of an increased scale of production.

76
Q

How might a diseconomies of scale arise?

A
  • Communication problems
  • reduction in morale
  • problems in managing the production process
77
Q

What are the costs and benefits of diseconomies of scale?

A
  • may mean the business is closer to full capacity
  • as full capacity is reached machines may be working for longer and so reducing the time to maintain them, which in turn may lead to breakdowns
  • diseconomies of scale must be monitored carefully
78
Q

What is capacity management?

A

Concerned with the usage of the resources of a business

79
Q

What does capacity management include?

A
  • anaylsis of performance
  • monitoring the capacity of the IT server
  • aids the development of a strategy for the business
80
Q

How do you work out capacity utilisation?

A

Actual or current level of output/maximum possible output x 100

81
Q

How can a business reach full capacity?

A
  • increase demand
  • produce different additional products with the same resources
  • reduce capacity
82
Q

What are the constraints on reaching full capacity?

A
  • level of competition
  • stage of the product life cycle
  • if the product is seasonal
  • if there are new superior alternatives
  • increased capacity
  • outsourcing
83
Q

What are the benefits of operating at full capacity?

A
  • average costs fall
  • fixed costs are spread out
  • less wastage of resources
  • profits increase
  • employees are busy
  • more competitive
84
Q

What are the disadvantages of operating at full capacity?

A
  • little or no opportunity for maintenance of machines
  • additional orders wont be able to be completed (little flexibility)
  • may put pressure on employees
  • no time for in house training
  • quality may be affected
85
Q

What is over utilisation of capacity?

A

When resources are pushed beyond their normal levels

86
Q

What is stock?

A
  • raw materials
  • work in progress
  • finished goods
87
Q

What are the benefits of holding stock?

A
  • satisfying demand
  • coping with fluctuations in demand
  • buffer stock to meet late deliveries
  • cost savings due to economies of scale purchases
88
Q

What are the costs of holding stock or inventory?

A
  • storage costs
  • opportunity costs
  • security costs
  • administrative costs
  • insurance costs
  • out of stock costs
89
Q

What does a stock control graph look like?

A

Stock - y axis
Time - x axis
Maximum and minimum stock level lines
Reorder lines

90
Q

What is maximum stock level determined by?

A
  • storage capacity
  • product
  • level of sales
  • costs of storage
  • degree of competition
  • timing of marketing campaigns
  • time of year
91
Q

What factors are minimum stock levels determined by?

A
  • level of sales
  • amount of time to deliver new stock
  • history of unforeseen circumstances
92
Q

What factors are reorder levels influenced by?

A
  • time
  • location of factory to suppliers
  • the sales record
93
Q

What are the two types of reorders?

A
  • fixed time reorder

- economic order level

94
Q

What is a buffer stock?

A

The difference between the max and minimum stock levels

95
Q

What factors affect the buffer stock level?

A
  • likelihood of delays with deliveries
  • speed of the production process
  • reliability and location of suppliers
  • patterns in demand
96
Q

What is lead time?

A

The length of time between the stock and its arrival

97
Q

How do you calculate the average level of stock?

A

Maximum stock level+minimum stock level/2

98
Q

What are methods to control stock levels?

A

LIFO, FIFO, EPOS

99
Q

What do LIFO and FIFO stand for?

A

LIFO - last in first out

FIFO - first in first out

100
Q

What is EPOS?

A

They use barcodes so when the product is sold it automatically reorders the stock

101
Q

Where did lean production originate from?

A

Japan

102
Q

What is lean production?

A

Lean production is an approach to management that focuses on cutting out waste, whilst ensuring quality. This approach can be applied to all aspects of a business – from design, through production to distribution. Lean production aims to cut costs by making the business more efficient and responsive to market needs.

103
Q

What are the advantages of lean production?

A

It helps reduce waste, reduces time wastage, reduces costs

104
Q

What is time based competition?

A

Reduces the time taken between the generation of an idea for a product and it going into production

105
Q

What is TQM?

A

Total quality management

106
Q

What does TQM aim to do?

A

Reduce wastage and improve quality standards

107
Q

How is TQM conducted?

A
  • by all employees
108
Q

What is Jidoka?

A

The process for building into the production process an ability to detect faulty goods and components at the earliest possible moment in production

109
Q

What is Kaizen?

A

Philosophy which regards improvements in quality as an ongoing phenomenon, and not just something that takes place occasionally

110
Q

What are quality circles?

A

Voluntary scheme where employees often between themsleves are allowed to meet in working hours to discuss problems relating to their working environment and workstations.

111
Q

What is JIT?

A

Just in time - whereby the levels of stock are kept low in order to reduce the amount of space required for storing stock

112
Q

What is a Kanban system?

A

It helps organise the flow of components onto the production line at the right time

113
Q

What are the main benefits of JIT?

A
  • reduced costs due to less stock being held
  • less cash tied up
  • higher liquidity
  • less likelihood of damage or it becoming out of date
114
Q

What are the disadvantages of JIT?

A
  • with less stock being held any delay from supplier could halt production
  • any serious errors within the production system may affect the level of production as again there is little spare stock to utilise
  • there is a substantial set up cost in order to operate JIT (Kanban technology)
115
Q

What is needed for a kanban system to work effectively?

A
  • all components must have a kanban attached to the parts or the container of the parts
  • no parts should be moved without a kanban
116
Q

What is cell production?

A

Where employees are placed in different teams with each team responsible for a particular part of the production process. These teams have to carry out quality control.

117
Q

What is ergonomics?

A

Looks at the relationship between the employee and the capital equipment (machine or tool) being used, where you try and minimise the amount of time wasted

118
Q

What factors affect the location of a business?

A
  • type of market and significance of costs
  • type of business
  • cost of labour
  • cost of site
  • degree of competition
  • location of consumers
119
Q

What is infrastructure?

A

The structures that support a society, such as transport links, telecoms, education and health facilities

120
Q

What is logistics concerned with?

A

The supply chain management.

121
Q

What is supply chain management?

A

The strategic co-ordination of business functions within a firm and with other businesses in its supply chain. The aims of SCM are to co-ordinate supply with demand and lower costs

122
Q

What is out sourcing?

A

When the business contracts a specialist company with expertise in a particular area to provide activities and/or services that would otherwise be performed “in house” by its own employees

123
Q

What are the advantages of outsourcing?

A
  • managers can concentrate on important core issues

- don’t have to spend large amounts on capital

124
Q

What is sub contracting?

A

Where the production of a particular product or service is done by someone outside of the business because the business doesn’t hold the skills required to fulfil the task

125
Q

What is off shoring?

A

Is the relocation by a business of an operational process, such as manufacturing.

126
Q

What is reshoring?

A

Refers to the returning of production operations back to the original country.

127
Q

What is distribution management?

A

The process of managing the movement of goods to the point of sale. It includes activities such as stock control, warehousing and transportation

128
Q

What is quality concerned with?

A
  • the design of the product
  • the reliability of the product
  • ensuring that the product is properly checked while in production and not only when completed
129
Q

What is quality assurance?

A

Concerned with the way in which a business sets out its procedures to assure its consumers that the products are of the right quality.

130
Q

What is quality control?

A

The process in which a business reviews the quality of all factors in loved in the process of production

131
Q

How do you work out wastage?

A

Number of rejects/total number of products produced x 100

132
Q

What is total quality management?

A

considers the efficient usage of all the resources used within the production process, directly or indirectly related to the actual production process. Employees are empowered to take responsibility for the work they do.

133
Q

What does the TQM help businesses do?

A
  • focus on the needs of the consumer
  • improve quality in all its departments
  • encourage a team approach by its employees
  • encourage employees to be involved
  • find ways to improve performance and quality
  • seek out waste and any inefficiencies
134
Q

What is benchmarking?

A

It is achieved by comparing a business with that of a competitor that is usually market leader in order to improve its own practices

135
Q

What types of bench marking is there?

A
  • external
  • internal
  • competitive benchmarking
  • functional benchmarking
  • strategic benchmarking
136
Q

What are the limitations of benchmarking?

A
  • limited access to sensitive material
  • difficult to find which business offers “best practice”
  • difficult for a business to implement improvements to reduce gaps between itself and “best practice”
137
Q

What is kaizen?

A

The philosophy of attempting to gain “continuous improvement”

138
Q

What are quality circles?

A

Voluntary schemes where employees meet within the working day to consider problems affecting their work.

139
Q

What are examples of quality standards?

A
  • Kite mark

- European standards

140
Q

Who are ISO 9000 relevant for?

A

Suitable for any organisation that is looking to improve the way in which it operates and is managed, regardless of size or sector

141
Q

What are zero defects?

A

Where there is no waste at all

Business Studies (10 decks)

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