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
