Operations Management

Question 1

What is division of labour in specialisation

Answer 1

When workers are split to do one specific job they are good at rather than them all doing all the jobs but less of each. This makes it more efficient

Question 2

How does specialisation make production more efficient

Answer 2

Workers focus on the same simple job and do it often hundreds of times a day. This makes them very good at the simple task so can do it well and quickly, this makes it more efficient

Question 3

What are the problems with labour division, 3

Answer 3

Workers may get bored so low job satisfaction, leading to poor quality products, more time off and frequent industrial action
If one group of workers stop, the whole production in a business may halt
Workers may become over specialised and struggle to find new jobs if their speciality is no longer in demand

Question 4

What is mass/flow production. Examples and properties

Answer 4

Production method when product is made non stop on a conveyer belt with workers doing small tasks in shifts or robots doing the tasks. The aim is to make as much product as possible with the least resources and unit cost, be as efficient as possible. It’s expensive to set up but very cheap to run. Examples are chocolate bars and smartphones

Question 5

Describe the traditional non lean method of productivity

Answer 5

The firm restocks once their stock goes below a certain level, e.g. When it’s below 1000 they will order 500
The hope is that the new stock will arrive before stock falls to the minimum level, e.g. 750.
Stock is usually bought automatically

Question 6

What is JIC productivity and describe it

Answer 6

Just in case is when there is extra stock for every stage in production from raw recourses to final products. This makes sure there isn’t a supply shortage or they can support a sudden surge in customer demand. The hope is that they won’t have to worry about recourse shortages as they always have spare. However, the firm may end up with lots of spare items

Question 7

What is non lean stock control

Answer 7

Methods of stock control that aren’t as efficient as they could be

Question 8

What is lean production

Answer 8

A Japanese approach to production that uses as little resources as possible o keep waste stock and raw materials to a minimum

Question 9

Describe JIT stock control

Answer 9

Just in time aims to keep stock levels to a minimum, ideally 0
Stock arrives at the factory as soon as it’s used
This keeps storage costs down as no warehouse needed
However, there needs to be lots of good communication in the factory
Extra training is needed to make sure JIT is successful
Workers may be stressed as they are always worried about running out of stock

Question 10

What is rationalisation, method examples

Answer 10

It is something done in a firm to reduce overheads to lower the break even point for profit
Methods include moving factories to cheaper areas, making redundancies, closing departments and making workers work elsewhere

Question 11

What is economies of scale

Answer 11

The larger you become, the cheaper unit costs sh USD become

Question 12

What is purchasing economies

Answer 12

This happens when a firm buys in bulk from its suppliers so gets them at a cheaper unit price than if they bought less

Question 13

What is a marketing economies

Answer 13

This happens because marketing is usually at a affixed cost no matter how big or small you are so the larger you become, the less percentage of your money needs to be put into marketing

Question 14

What is managerial economies

Answer 14

This occurs when a firm is able to afford specialist managers who are experts in certain fields to make the firm even more money

Question 15

What is financial economies

Answer 15

This is when large firms are able to get more investment from banks and others as the investors know the larger firm is more likely to be able to pay it back than a small one

Question 16

What is technical economies

Answer 16

This is when a firm is able to afford more advanced machinery than when they were small, this reduces running and production costs even if it cost more to set up

Question 17

What is risk bearing economies

Answer 17

When a firm is large enough to take risks such as having lots of products in different markets as if one fails, the rest won’t be significantly affected, cash flow shouldn’t then become bad

Question 18

What is diseconomies of scales

Answer 18

This happens when a firm gets too big and it become harder to manage
Hierarchy has more layers so decisions take longer to spread through the whole workforce.
Workers become more distanced from directors so may be demotivated which may lower productivity
Production process may become more complex and difficult to coordinate so it becomes less efficient

Question 19

What is quality control

Answer 19

A method done to make sure a firms products are good quality for the customer, this usually involves taking a sample product from a batch and inspecting it

Question 20

How is quality control done and why

Answer 20

It’s done in three different stages. The raw materials are checked, then random samples are taken as the product is being produced and finally, random samples are taken from a batch of the finished product. Anything that isn’t good enough quality is removed. This means defects can be spotted before they are finished, reducing waste

Question 21

Why do businesses do Quality control

Answer 21

To make sure the product is good quality for the customer, it can be expensive as while batches may need to be scrapped but this is cheaper than the costs of dissatisfied customers

Question 22

What is total quality management

Answer 22

This is when a firm encourages workers to inspect their own work to make sure products are good first time so quality control is cheaper. This is expensive to introduce as it takes a long time to teach workers what to look for and they may feel demotivated having to do the extra work

Question 23

Negatives of rapid growth on quality

Answer 23

Firm may cut corners to meet sudden demand so quality may reduce
Work may be outsourced to other factories who don’t understand the need for quality
Expensive to carry out more quality inspections