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business. > Operations Management > Flashcards

Operations Management Flashcards

1
Q

What are the different business functions/departments?

A
  • Marketing
  • Production/Operations (inc logistics)
  • Accounting and finance
  • Human Resources
  • Customer service (inc sales)
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2
Q

What is the main role of marketing function?

A
  • Showcasing company in a positive light
  • Why customers should purchase
  • Drawing in target audience
    (Promotion and Research)
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3
Q

What is the main role of production/operations function?

A

Planning, organising and directing all of the activities in an organisation which helps convert raw materials into valuable goods and services

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4
Q

What is the main role of accounting function?

A

To perform financial functions (recording and analysing) which monitor spending, sales and other financial relations

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5
Q

What is the HR function responsible for?

A
  • Hiring/firing
  • Training workers
  • Maintaining interoffice relationships
  • Dealing with employment laws
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6
Q

What is the main role of the customer service function?

A

Taking care of the customers needs by providing and delivering a professional and helpful service

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7
Q

What are logistics?

A

Involves getting the people and resources for something to be able to take place

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8
Q

What are the factors which indicate business size?

A
  • No. of employees
  • Amount of capital invested
  • Sales turnover
  • Share value
  • Market share
  • Assets
  • Brand name and history
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9
Q

What advantages might arise from being a large business?

A
  • More revenue/profits
  • Economies of scale
  • More opportunities for investment/growth
  • More established - greater access to funding
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10
Q

How do businesses increase their size and become more successful?

A
  • Continuously seek to improve
  • Become efficient and productive
  • Respond to market changes
  • Provide a good service
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11
Q

How might a small business compete with a larger one?

A
  • Develop good customer service and relationships
  • Focus on a particular market (niche)
  • Be more flexible to customer needs
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12
Q

What are the main criticisms of the UK being in the EU?

A
  • More competition for businesses
  • Free movement of people causes social issues
  • Pay a membership fee
  • Fund EU foreign aid
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13
Q

What are the reasons for being an EU member?

A
  • Access to single market
  • Free movement of people, more employees
  • More opportunities
  • No conflict between nations
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14
Q

What are some of the common problems UK firms face when trading internationally?

A
  • Difficulty finding/understanding overseas customers
  • Costly
  • Fluctuating exchange rates
  • Cultural issues (Ikea,India)
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15
Q

What assistance does the government give to UK business trading internationally?

A
  • Finds customers and markets overseas
  • Helps to promote via the internet
  • Sets them up with contacts
  • Provides export insurance (reclaiming losses)
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16
Q

What are multinationals?

A

Businesses which have activities and operations in more than one country

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17
Q

What benefits might multinationals bring to a country and its economy?

A
  • Creates more jobs
  • Improves standard of living
  • MNCs work with charities
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18
Q

What limitations might multinationals bring to a country and its economy?

A
  • Tax avoidance
  • Exploitation
  • Threat to local business
  • Risk of monopoly
  • Environmental threat
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19
Q

What are the effects of globalisation on a business?

A
  • Increased competiton

- Hypercompetitive

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20
Q

What is hypercompetition?

A

The disruption of existing markets by flexible and fast moving business into new markets

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21
Q

What is a joint venture?

A

When 2 or more business pool their resources and expertise to achieve a particular goal. The risks and rewards of the enterprise are also shared

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22
Q

Why might a business form a joint venture?

A
  • Business expansion
  • Development of new products
  • Moving into new markets
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23
Q

What possible problems are there with joint ventures?

A
  • No better off then if done independently
  • Could lead to legal issues post venture
  • Difficult to properly co-ordinate
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24
Q

What is a strategic alliance?

A

An arrangement between two companies that have decided to share resources to undertake a specific and mutually beneficial project. A strategic alliance is less involved and less permanent than a joint venture

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25
Q

What do the production department (function) do?

A
  • Manufacture the product
  • Buy raw materials
  • Monitor quality
  • Packaging
  • Storage
  • Shipping
  • Monitors productivity of staff
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26
Q

What are the benefits of using technology in production?

A
  • Technology makes less mistakes
  • Faster and better quality output
  • Less costly in long term
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27
Q

What might the limitations be of using technology in production?

A
  • Boring
  • Redundancy of workers
  • Health and safety issues
  • Expensive to buy and repair
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28
Q

What are the objectives of production/operations?

A
  • Increase output
  • Cut costs to help break even and increase profit margins
  • Improve quality
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29
Q

What factors need to be considered when setting objectives in production/operations?

A
  • Size and type of business
  • Other (possibly conflicting) objectives
  • Current economy
  • Performance of competition
  • Laws and legislation
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30
Q

What is adding value?

A

An improvement to something that makes it worth more

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31
Q

How might a business add value to a product?

A
  • Improve quality
  • Greater speed of service
  • Branding
  • USP
  • Better design
  • More convenience
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32
Q

What is added value?

A

The increased worth a business creates for a product

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33
Q

How is added value calculated?

A

The difference between how much it costs for a business to produce a product and how much the product is then sold for is the added value

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34
Q

What are the benefits of using technology in business?

A
  • More skilled labour force
  • Increased output/production
  • More sales and profits
  • Cost effective in the long term
  • Better quality
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35
Q

What are the 3 main types of production?

A

Job
Batch
Flow/Mass

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36
Q

What is job production?

A

Making a unique and specific product the a customer order

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37
Q

What is batch production?

A

Making a specific quantity of a product, products might slightly differentiate.

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38
Q

What is mass/flow production?

A

Making very large quantities of the same product on one machine

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39
Q

What are some advantages of job production?

A
  • Motivates staff, less repetitive
  • Better quality
  • Meets customer needs
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40
Q

What are some disadvantages of job production?

A
  • More costly

- Labour costs also increase because of skill required

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41
Q

What are some advantages of batch production?

A
  • Lower labour costs
  • Production is faster
  • Economies of scale
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42
Q

What are some disadvantages of batch production?

A
  • Less interesting for staff

- One stage of production has to be completed before next can begin, losing time

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43
Q

What are some advantages of flow production?

A
  • Continuous, fast production
  • Large amounts can be made
  • Automation helps to cut costs
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44
Q

What are some disadvantages of flow production?

A
  • Expensive to set up
  • Increased costs and storage due to large amounts of stock needed
  • Boring for staff
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45
Q

What is meant by specialisation?

A

Where a firm focuses on the production of a specific and small range of products (car manufacturing)

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46
Q

What is meant by division of labour?

A

The main process of production is split into many simple parts and each part is taken by different workers who are specialised in the production of that particular part

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47
Q

What are the advantages of specialisation/division of labour?

A
  • Improved quality from specialist knowledge
  • Higher customer satisfaction
  • More motivated/productive workers
  • Charge higher prices
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48
Q

What are the disadvantages of specialisation/division of labour?

A
  • Boredom from repetitive tasks
  • High labour costs for high skill level
  • Business becomes increasingly dependent on staff (strike)
  • Harder to recruit specialised staff
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49
Q

What is cell production?

A

When the flow production line is split up into units; each team or ‘cell’ is responsible for a significant part

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50
Q

How does cell production provide a means for job rotation?

A

Team members are skilled at a number of roles therefore they can swap

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51
Q

What is an advantage of cell production?

A

Job rotation, team working and increased worker commitment

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52
Q

What are 3 main methods of selling?

A
  1. E-commerce
  2. Face to face
  3. Telesales
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53
Q

What is meant by customer service?

A

The methods used by a business to look after its current and future customers

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54
Q

How might a business provide good customer service?

A
  1. Welcoming, friendly staff
  2. Good presentation of products
  3. Help customers out with knowledge
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55
Q

What are 3 benefits a business might receive from giving good customer service?

A
  1. Better reputation, more customers
  2. Helps boost revenue and profits
  3. Increased customer satisfaction and loyalty
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56
Q

What might the problems be with customer service in businesses?

A
  1. Costs more to train staff
  2. Creates a need for more staff
  3. Gives customers a sense of entitlement beyond what is reasonable
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57
Q

Why might good customer service improve stakeholder relationships?

A
  • More motivated staff
  • Better relationship with supplier
  • Better dividends
  • Builds a good relationship with the community
58
Q

What are the key areas a project manager would need to consider when planning a project?

A
  • Feasibility
  • Project plan + timescale
  • Finance
  • Resources
  • Risk assessments
  • Contingency planning
59
Q

What might the risks be of a project?

A
  • Poor leadership
  • Poor planning
  • Failing to manage change
  • Lack of resources
  • Poor communication within project
60
Q

What might influence task priority within a project?

A
  • Customer requests
  • Resources only being available at certain times
  • One job being critical to another
61
Q

How might a project manager decide how to complete the project in the most efficient way?

A

Critical path analysis

62
Q

What are the advantages of using critical path analysis?

A
  • Reduces risk
  • Encourages careful assessment of the project requirements
  • Helps to identify tasks which have some flexibility
63
Q

What are the disadvantages of using critical path analysis?

A
  • Less reliable, estimate based
  • Does not guarantee the success of a project
  • Resources may not be as flexible as management think
64
Q

How do you calculate the estimated duration of a project?

A 
                                   6
65
Q

What does PERT stand for?

A

Program evaluation review technique

66
Q

What things can productivity be measured according to?

A
  • Wages to Revenue
  • Output per employee
  • Output per machine
67
Q

How can a business improve their productivity?

A
  • Monitor staff
  • Invest in technology
  • Invest in training
  • Motivation techniques
  • Division of Labour
68
Q

What is the importance of productivity for a business?

A
  • Creates a drop in costs per product
  • Faster production
  • Better quality
  • More revenue
  • Competitive
69
Q

What is the theory of economies of scale?

A

The more you buy, the cheaper each item is to sell/produce

70
Q

What are the 2 types of costs?

A

Fixed and Variable

71
Q

What are the 6 types of internal economies of scale?

A
  1. Purchasing
  2. Production/Technology
  3. Marketing
  4. Financial
  5. Risk bearing
72
Q

What is purchasing economies of scale?

A

Getting a discount for buying in bulk

73
Q

What is production/technology economies of scale?

A

Spreading the cost of production over more output

74
Q

What is marketing economies of scale?

A

Promoting the brand name

75
Q

What is managerial economies of scale?

A

Employing the best specialist managers and staff members

76
Q

What is financial economies of scale?

A

Borrowing at cheaper rates of interest

77
Q

What is risk bearing economies of scale?

A

Spreading the risk over a range of products

78
Q

What are the advantages of economies of scale?

A
  • Allows a better profit margin per product
  • Prices can be reduced, increasing demand and becoming more competitive
  • Means business is more efficient
79
Q

What is meant by diseconomies of scale?

A

When a business gets TOO BIG, average costs start to rise

80
Q

What are the characteristics of diseconomies of scale?

A
  • Poor staff morale
  • Staff working poorly in a big team
  • Communication problems
  • Lack of co-operation between departments
  • Office politics
  • Impersonal relationships with customers
81
Q

What are external economies of scale?

A

When the average costs all for the industry and not just the individual business

82
Q

What are 2 examples of external economies of scale?

A
  • Government grants

- Better transport links saving time and money

83
Q

What is the break even point?

A

The amount of products that a business needs to sell in order to cover/balance out total costs

84
Q

What is meant by quality control?

A

Checking the quality once the product has been made

85
Q

What is meant by quality assurance?

A

Putting systems in place in advance to guarantee the quality whilst the product is being made

86
Q

Why is quality important to a business?

A
  • Increases customer satisfaction
  • Improves reputation
  • Less complaints=less hassle
  • Competitive advantage
  • Result in increased revenue/profits/market share
  • Add value to the product
87
Q

What problems might there be for businesses with quality systems?

A
  • Staff training costs
  • Slows down production
  • Considered excessive and unnecessary
88
Q

What are 3 examples of quality systems?

A
  • Just in Time
  • Total Quality Management
  • Kanban
89
Q

What is just in time? (JIT)

A

Keeping stock to a minimum, and the raw materials are ordered only when they are needed

90
Q

What are the benefits of JIT?

A
  • More time and cost efficient
  • Helps with budgeting and improves cash flow
  • Less wastage
  • Reduces storage costs
91
Q

What are the problems with JIT?

A
  • If deliveries are late, this could disrupt business and they could be understocked
  • More pressure for the business
  • Lack of flexibility
  • No economies of scale
  • Unable to meet increased demand
92
Q

What is lean production?

A

Eliminating waste and therefore using less labour, materials, space and time; thus costs are reduced

93
Q

What is total quality management?

A

When everybody is involved in checking the quality where they work, the product will only move down the line if it passes quality checks

94
Q

What are the benefits for TQM?

A
  • Produces better quality products which will boost customer loyalty and satisfaction
  • Higher revenue and profits
  • Long term cost reduction
  • Decrease in waste
95
Q

What are the problems for TQM?

A
  • Cost benefits may not be seen for several years
  • Boring and demotivating for staff
  • Slows down production
  • Training cost
  • Makes product more expensive which is passed on to the customer
96
Q

What is continuous improvement?

A

Staff attend a review meeting where they look at output mistakes and put in place measures to improve it

97
Q

What is capacity utilisation?

A

The use that a business makes of its resources, the % of the capacity used

98
Q

What is the formula for capacity utilisation? (%)

A

Actual output
———————- x 100
Potential output

99
Q

What are the benefits of operating at a high capacity?

A
  • Increase efficiency
  • Increase workforce hours
  • Measures productivity
  • More products, sales and profits
  • Make use of economies of scales
100
Q

What are the problems of operating at a high capacity?

A
  • Less flexibility
  • Added workload and stress
  • Less opportunity to increase output without having to invest in an expansion
  • Less time for quality control
  • Demotivation/tired, ineffective staff
  • If the supply doesn’t meet demand, money is wasted
101
Q

What is efficiency?

A

How well input (raw materials, labour, capital) can be changed into output (goods and services)

102
Q

How is productivity measured?

A

Av. number of employees

103
Q

What are the ways to improve productivity?

A
  • Motivation techniques
  • Targets
  • Better machinery
  • Training
  • Factory layout
  • Work staff harder
104
Q

How is wastage calculated?

A

Wastage
————— x 100. = Wastage Rate %
Output

105
Q

What are the 3 external quality standards that a business should comply with?

A
  1. British Standards
  2. European Standards
  3. International Standards
106
Q

What are the benefits of complying with external standards?

A
  • Better reputation
  • Improves quality
  • Helps with marketing
  • Increased customer satisfaction
  • Better systems within the business
107
Q

What are the problems of complying with external standards?

A
  • More costly
  • Bigger need for staff training
  • Less time efficient, less productive
  • Costs may be passed on to the customer as higher prices
108
Q

What is benchmarking in business?

A

Identifying who is the best company in the industry and they are used as a model for setting a standard

109
Q

What is useful about benchmarking for businesses?

A
  • Helps the business stay competitive
  • Raises the standards of service which leads to improvements
  • Improves quality
110
Q

What do logistics do?

A

Logistics plans, implements and controls the effective flow and storage of goods between the point of origin and consumption

111
Q

What is supply chain management/procurement?

A

Selecting suppliers who you can buy from, establishing the payment terms and negotiating the contracts and actual purchasing of goods

112
Q

What are the factors that need to be considered in logistics?

A 
Time - how quickly do you need stock?
Reliability of supply 
Length of supply chain - how many distributors?
Costs - how expensive?
Customer service
113
Q

What is transport design and modelling?

A

Improving and optimising transport operation to enhance the overall efficiency of a business.

114
Q

What is outsourcing?

A

Hiring a third party to help complete production and operations

115
Q

What is inventory management?

A

Managing the stock of goods that a business holds

116
Q

What is subcontracting?

A

Paying someone else to do work for you, it is more temporary and short term than outsourcing

117
Q

What is off shoring?

A

Taking operations and production overseas

118
Q

What is reshoring?

A

Operations from overseas back to the UK

119
Q

What are operational objectives?

A

The specific production target set by an organisation to ensure that its company goals are achieved

120
Q

What are some examples of operational objectives?

A
  • Cost/volume targets (unit costs)
  • Quality targets (customer satisfaction)
  • Efficiency targets (productivity, capacity utilisation)
  • Environmental targets (use of energy/sustainable sources)
  • Innovation
  • Flexibility
121
Q

What is work study?

A

A system of assessing methods of working to help achieve maximum output and efficiency

122
Q

What changes can be made to help overcome problems in the workplace?

A
  • Higher pay rates
  • Job rotation
  • Training opportunities
  • Improve stock management - JIT
  • Employ logistics staff who can make improvements to the business
123
Q

What is ergonomics?

A

The process of designing/arranging workplaces and systems so that they fit the workers who use them

124
Q

What benefit might a new layout/ergonomics bring to a business?

A
  • Less accidents/safer workplace
  • Less wasted time.. increased productivity
  • More space
  • More organised, encouraging productivity
  • Easier for staff
125
Q

What is waste management?

A

The activities and actions required to manage waste from its inception to its final disposal. This includes the collection, transport, treatment and disposal of waste

126
Q

What sort of waste might a business generate?

A
  • Food waste
  • CO2/Gas/fuel
  • Energy waste
127
Q

What is hazardous waste?

A

Waste that has substantial and potential threats to public health or the environment

128
Q

How might a business benefit from effective waste management?

A
  • Better reputation

- Approval from younger demographic customers

129
Q

Explain what is meant by operations management objectives

A

Specific production targets set by an organisation to ensure that its company goals are achieved

130
Q

Explain the need for a business to have clear operations management objectives

A
  • Sense of direction
  • Motivational incentive
  • Help achieve the overall goal of the business
  • Establish standards
131
Q

What is meant by innovation?

A

Introduction of a new idea, method of production, or new equipment; usually in hope of improving productivity and lowering costs

132
Q

What is meant by research and development?

A

Investigative activities a business undertakes. This usually involves the investment of money to keep up with trends and technological change in an attempt to beat the competition within a market

133
Q

Explain the reasons for innovation, research and development within a business

A

Innovation: cut costs (long term), increase productivity and efficiency
Research and Development: compete with rivals, USP, improve customer service

134
Q

What are the 2 types of innovation?

A

Product and Process Innovation

135
Q

What is meant by product innovation?

A

Introduction of a new and better product for sale in the market

136
Q

What is meant by process innovation?

A

Introduction of a new production process that either improves productivity and lowers costs, or makes improvements to the current product

137
Q

Explain the process/cycle of innovation, research and development

A
  • Market research to assess the level of demand and current rends within a market
  • Brainstorming - considering capital, staff and resources required
  • Conducting a morphological study
138
Q

What is a morphological study?

A

A method that generates a lot of ideas very quickly and therefore more cheaply

139
Q

What are the advantages of innovation, research and development to a business?

A
  • Competitive advantage
  • Attract more customers
  • Lead to an increase in profits, revenue and market share etc
140
Q

What are the disadvantages of innovation, research and development to a business?

A
  • Cost
  • Risk
  • Limited protection of new ideas
  • Technology is always changing, pressure to keep up
141
Q

What is 1 advantage and 1 disadvantage to the consumer of innovation in businesses?

A

+ : More choice and better services

- : Constant change may annoy customers

142
Q

What may happen to research and development in a recession in the economy?

A

Cutback in expenditure that a business provides

business. (11 decks)

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