Operations Management Flashcards
What are the different types of production? Outline them.
batch - each batch goes through each stage together (pottery)
job - single item, specific needs
cell - employees in teams each with a process
flow - continuous of standardized product
What is meant by added value?
difference between actual price charged for a product and the actual cost of making the product
What is meant by productivity?
measure of output per unit of input
considers the relationship between inputs and outputs
Calculate productivity
output/input
calculate labour productivity
average output / average number of employees
Define economies of scale
unit costs fall as output rises
list 3 of the 6 internal economies of scale
purchasing financial managerial technical marketing risk-bearing
list the 2 external economies of scale
concentration of industry (skilled workers move to that area)
information (access to data or market research)
Define disconomies of scale
unit costs rise as a result of increased scale of production
What is capacity?
maximum that a firm can produce in a given period with available resources
what is capacity utilisation?
% of total capacity that is actually being achieved
What is stock control?
keeping just the right amount of stock at one time
What is JIT?
just in time
ordering stock just in time so that you don’t run out
What is lean production?
being as efficient as possible
What is fixed reordering?
business reorders at a given fixed time
What is buffer stock?
difference between minimum stock level and holding no stock
What is economic order level?
represents the attempt to balance cost of holding stock and amount of stock that is ordered
What is JIDOKA?
mistake spotting in production with specialist staff checking andon lights (green and red)
What is TOTAL QUALITY MANAGEMENT?
each stage is checked to stop faults
What is KAIZEN?
continuous improvement, not just the mistake spotting
improving areas of the production process
What are QUALITY CIRCLES?
team meetings in working hours to discuss problems related to working environment etc
Differentiate between outsourcing and offshoring?
outsourcing - someone else does the work for you
offshoring - overseas work done
Define outsourcing
use of third party to undertake specific jobs or contract rather than employing into the business
