Operations Flashcards
1
Q
What sort of objectives would operations management set?
A
- productive targets
- quality targets
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
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
4
Q
What is added value?
A
The difference between the actual price charged for a product and the cost of producing that product.
5
Q
How might a business add value?
A
- customer service
- additional features
- delivery service
- quality
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
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
8
Q
What is innovation?
A
Introduction of a new idea, method of production or new equipment into the production process.
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.
10
Q
When is R&D essential?
A
It is vital in a highly competitive market, helps a business survive
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
12
Q
What is product orientation?
A
Means the business concentrates its activities on improving the quality or efficiency of the product
13
Q
What is a morphological study?
A
A study that generates a lot of ideas very quickly and therefore more cheaply.
14
Q
What are the three aspects of value analysis?
A
- function
- cost
- aesthetics
15
Q
What is the hardest thing about value analysis?
A
Balancing the three aspects
16
Q
In value analysis where does the most important factor go?
A
At the top of the triangle
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
18
Q
What is job production?
A
Involves producing a single item or product.
19
Q
What is job production usually concerned with?
A
Satisfying a consumers specific needs
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
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
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.
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
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
25
What is flow production?
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
26
What are the benefits of flow production?
- economies of scale
- can benefit from division of labour
- little downtime
- costs low
- offer more opportunities for specialisation
27
What are the limitations of flow production?
- 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
28
What is cell production?
- production system that has employees working in teams, who are responsible for the whole production for a given product
29
What are the disadvantages of cell production?
- expensive to set up
30
What are the benefits of cell production?
- 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
31
What is division of labour?
When the job or task is broken down into separate tasks
32
What is the impact of division of labour on the stakeholders of the business?
- 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
33
What needs to be taken into account when changing the method of production?
- nature of the product
- actual cost of the machinery
- budgets
- practical ability to change
- support of the workforce
34
What is the impact of choosing a specific method of production?
- may require additional capital equipment
| - may require laying off or hiring more workers
35
What is project management?
Process which involves planning and organising activities using resources to help achieve the objectives of the business
36
What is critical path analysis?
The process that allows for the overall time of a project to be calculated
37
How do you calculate the earliest starting time? In CPA?
Add the length of the previous activity to the length of the current activity.
38
If two activities are going into one node what answer do you take for the EST and why?
Take the highest value as BOTH activities have to be completed before moving onto the next activity
39
What is the LFT?
Refers to the latest time in which an activity can be completed without causing a delay to the next activity
40
How do you calculate LFT?
LFT of previous activity - duration of activity.
41
When 2 activities flow into one what value do you use for the LFT?
The lowest value as a result of the subtraction or you minus the largest number
42
What is the critical path?
Where EST and LFT are the same
43
What is a dummy activity?
One that’s has no significant time but is an essential link between other activities.
44
What are floats?
Shows how much time an activity may be delayed before it has an effect on either the next activity or project as a whole.
45
What are the two types of float?
- Total float
| - Free float
46
What is total float?
Represents the longest time which any activity’s start may be delayed without affecting the length of the project as a whole
47
How do you work out total float?
LFT of an activity - duration of activity - EST of the activity
48
What does free float refer to?
The effect upon The next activity and not the project as a whole
49
How do you work out free float?
EST of next activity. - duration of the activity - EST at the start of the activity
50
If the free float is 1 what does that mean?
Means the next task can be delayed by one day before it will affect the start of the next activity.
51
What can CPA be used for?
Used to help solve problems regarding delays.
52
What is a GANTT chart?
Graphical representation of the order and duration of given tasks within a project.
53
What does a GANTT chart look like?
It has the duration of the activities along the horizontal axis and the activity on the vertical axis
54
What are the benefits of critical path analysis?
- 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
55
What are the limitations of CPA?
- 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
56
What are the benefits of the GANTT chart?
- 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
57
What are the limitations of the GANTT chart?
- doesn’t show what activities are the most important
- does not show EST and LFT
- the calculation of floats is not straight forward
58
What is the difference between PERT and CPA?
PERT takes a more pessimistic approach to the time taken to complete various tasks within a project.
59
What is the formula for PERT?
Estimated time:
| Optimistic time + 4 x Likley time + pessimistic time / 6
60
What are the advantages of PERT?
- 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
What are the disadvantages of PERT?
- requires some guesswork
| - complicated to use
62
How do you work out productivity?
Output/input
63
How can productivity within a business be improved?
- 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
What is the importance of productivity to the business and its stakeholders?
- 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
What is internal/organic growth?
Natural growth of a firm achieved by increased production and sales.
66
Why do business’s grow?
- objectives change
- increase market share
- greater profit
- higher chances of survival
- cost reductions
67
What is external growth?
Growth achieved by takeover and merger
68
What is capacity?
The maximum that a firm can produce in a given period with the available resources
69
What is capacity?
The maximum that a firm can produce in a given period with the available resources
70
What is capacity utilisation?
The percentage of total capacity that is actually being achieved in a given period
71
What are example of internal economies of scale?
- purchasing
- financial (negotiate cheaper loans)
- managerial
- technical (buying more effective capital)
- marketing
- Risk bearing (can diversify products)
72
How are internal economies of scale achieved?
As a result of a firm growing internally
73
How are external economies of scale achieved?
As a result of growth in the industry/
74
What are examples of external economies of scale?
- concentration economies
| - information
75
What are diseconomies of scale?
An increase in unit costs as a result of an increased scale of production.
76
How might a diseconomies of scale arise?
- Communication problems
- reduction in morale
- problems in managing the production process
77
What are the costs and benefits of diseconomies of scale?
- 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
What is capacity management?
Concerned with the usage of the resources of a business
79
What does capacity management include?
- anaylsis of performance
- monitoring the capacity of the IT server
- aids the development of a strategy for the business
80
How do you work out capacity utilisation?
Actual or current level of output/maximum possible output x 100
81
How can a business reach full capacity?
- increase demand
- produce different additional products with the same resources
- reduce capacity
82
What are the constraints on reaching full capacity?
- level of competition
- stage of the product life cycle
- if the product is seasonal
- if there are new superior alternatives
- increased capacity
- outsourcing
83
What are the benefits of operating at full capacity?
- average costs fall
- fixed costs are spread out
- less wastage of resources
- profits increase
- employees are busy
- more competitive
84
What are the disadvantages of operating at full capacity?
- 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
What is over utilisation of capacity?
When resources are pushed beyond their normal levels
86
What is stock?
- raw materials
- work in progress
- finished goods
87
What are the benefits of holding stock?
- satisfying demand
- coping with fluctuations in demand
- buffer stock to meet late deliveries
- cost savings due to economies of scale purchases
88
What are the costs of holding stock or inventory?
- storage costs
- opportunity costs
- security costs
- administrative costs
- insurance costs
- out of stock costs
89
What does a stock control graph look like?
Stock - y axis
Time - x axis
Maximum and minimum stock level lines
Reorder lines
90
What is maximum stock level determined by?
- storage capacity
- product
- level of sales
- costs of storage
- degree of competition
- timing of marketing campaigns
- time of year
91
What factors are minimum stock levels determined by?
- level of sales
- amount of time to deliver new stock
- history of unforeseen circumstances
92
What factors are reorder levels influenced by?
- time
- location of factory to suppliers
- the sales record
93
What are the two types of reorders?
- fixed time reorder
| - economic order level
94
What is a buffer stock?
The difference between the max and minimum stock levels
95
What factors affect the buffer stock level?
- likelihood of delays with deliveries
- speed of the production process
- reliability and location of suppliers
- patterns in demand
96
What is lead time?
The length of time between the stock and its arrival
97
How do you calculate the average level of stock?
Maximum stock level+minimum stock level/2
98
What are methods to control stock levels?
LIFO, FIFO, EPOS
99
What do LIFO and FIFO stand for?
LIFO - last in first out
| FIFO - first in first out
100
What is EPOS?
They use barcodes so when the product is sold it automatically reorders the stock
101
Where did lean production originate from?
Japan
102
What is lean production?
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
What are the advantages of lean production?
It helps reduce waste, reduces time wastage, reduces costs
104
What is time based competition?
Reduces the time taken between the generation of an idea for a product and it going into production
105
What is TQM?
Total quality management
106
What does TQM aim to do?
Reduce wastage and improve quality standards
107
How is TQM conducted?
- by all employees
108
What is Jidoka?
The process for building into the production process an ability to detect faulty goods and components at the earliest possible moment in production
109
What is Kaizen?
Philosophy which regards improvements in quality as an ongoing phenomenon, and not just something that takes place occasionally
110
What are quality circles?
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
What is JIT?
Just in time - whereby the levels of stock are kept low in order to reduce the amount of space required for storing stock
112
What is a Kanban system?
It helps organise the flow of components onto the production line at the right time
113
What are the main benefits of JIT?
- 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
What are the disadvantages of JIT?
- 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
What is needed for a kanban system to work effectively?
- 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
What is cell production?
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
What is ergonomics?
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
What factors affect the location of a business?
- type of market and significance of costs
- type of business
- cost of labour
- cost of site
- degree of competition
- location of consumers
119
What is infrastructure?
The structures that support a society, such as transport links, telecoms, education and health facilities
120
What is logistics concerned with?
The supply chain management.
121
What is supply chain management?
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
What is out sourcing?
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
What are the advantages of outsourcing?
- managers can concentrate on important core issues
| - don’t have to spend large amounts on capital
124
What is sub contracting?
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
What is off shoring?
Is the relocation by a business of an operational process, such as manufacturing.
126
What is reshoring?
Refers to the returning of production operations back to the original country.
127
What is distribution management?
The process of managing the movement of goods to the point of sale. It includes activities such as stock control, warehousing and transportation
128
What is quality concerned with?
- 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
What is quality assurance?
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
What is quality control?
The process in which a business reviews the quality of all factors in loved in the process of production
131
How do you work out wastage?
Number of rejects/total number of products produced x 100
132
What is total quality management?
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
What does the TQM help businesses do?
- 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
What is benchmarking?
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
What types of bench marking is there?
- external
- internal
- competitive benchmarking
- functional benchmarking
- strategic benchmarking
136
What are the limitations of benchmarking?
- 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
What is kaizen?
The philosophy of attempting to gain “continuous improvement”
138
What are quality circles?
Voluntary schemes where employees meet within the working day to consider problems affecting their work.
139
What are examples of quality standards?
- Kite mark
| - European standards
140
Who are ISO 9000 relevant for?
Suitable for any organisation that is looking to improve the way in which it operates and is managed, regardless of size or sector
141
What are zero defects?
Where there is no waste at all
