Operations Management 2

Question 1

Specialisation and Interdependence

~specialisatiom leads to a division of labour

~division of labour has its problems:
…low job satisfaction
…poor quality products
…halt production in whole business
…workers can become overspecialised
…occupational immobility

~specialisaton makes firms interdependent

Answer 1

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Question 2

Methods of production

Flow production
~also called mass production sometimes
~flow production is making lots of things continuosly
~enables businesses to make products non-stop
~aim is to make as many identical products as possible and gain from economies of scale
~often used for mass-market products

Businesses can produce more efficientley as they grow

Answer 2

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Question 3

Productivity
Two “non-lean” stock control methods…
1.A traditional method is to use stock control graphs

2.Just-in-case

Lean Production uses as few resources as possible
~japanese approach to making products that aims to use as few resources as possible

~Just-in-time=method that aims to keep stock levels to the bare minimum-ideally zero

Rationalisation-Reorganising to increase Efficiency
~can be used to increase efficiency
~used when they need to reduce overheaf costs -to reduce their break-even point

Methods include:

• closing an administrative department and delegating their work elsewhere
• closing a factory and moving the production to another site
• reducing the number of managers

*rationalisation-can be bad news for some workers as it often results in redundancies

Answer 3

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Question 4

Effects pf expansion-ecomies of scale
6 main internal economies of scale

1. purchasing economies
2. marketing economies
3. manageral economies
4. financial economies
5. Technical economies
6. Risk-Bearing Economies

Four main external economies of scale
-happens when a number of large firms locate near to each other

Diseconomies of scale:
~growth brings with it some disconomies of scale

1. the bigget the firm the harder it is to manage it properly
2. decisions take time to reach the whole workforce/and workers at the bottom of the hierarchy feel insignificant-workers can get demotivatef which may cause productivity to go down

~productiom process may become more complex and more difficult to coordinate
This means different departments may end up working on very similar projects without knowing

Answer 4

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Question 5

Quality managment

Quality Control-spotting problems before its too late
~quality control involves checking products to make sure quality standards are being met
~products are checked for things like design/appearance/defects/safety
3 stages:
1.check raw materials from suppliers
2.Random samples taken to check quality of work in progress
3.random samples taken of finished products-items removed if they diddnt meet required quality.

Total Quality management- a Culture of quality

Rapid Growth makes it hard to maintain high quality

Answer 5

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