Operations Management Flashcards
Capacity utilisation
The use that a business makes of its resources.
Excess or surplus capacity
When a business has too many resources, such as labour and capital, to produce its desired level of output.
Mothballing
When machines, equipment or building space are left unused but maintained so that they could be brought back into use if necessary.
Operations management
The organisation and control of the process by which inputs, such as labour, materials and machinery, are transformed into final products or by which services are provided to customers.
Operational targets
The goals set by a business that must be achieved in the production of a product or provision of a service.
Rationalising
Reducing the number of resources, particularly labour and capital, put into the production process, usually undertaken because a business has excess capacity.
Subcontracting or outsourcing
Hiring or contracting another business to do work which could be done in-house by a business.
Buffer stocks
Stocks held as a precaution to cope with unforeseen demand.
Lead time
The time between placing the order and the delivery of goods.
Re-order level
The level of stock when new orders are placed.
Re-order quantity
The amount of stock ordered when an order is placed.
Stock rotation
The flow of stock into and out of stores.
Stock take
The process of counting the amount of stock held at a point in time in order to calculate the total stock level held.
Work-in-progress
Partly finished goods.
