Operations Management (Keywords)

Question 1

Define Productivity

Answer 1

Productivity is the output measured against the inputs used to create it

Question 2

Define Buffer inventory level

Answer 2

The buffer inventory level is the inventory held to deal with uncertainty in customer demand and deliveries of supplies

Question 3

Define Lean Production

Answer 3

Lean production is a term for those techniques used by business to cut down on waste and therefore increase efficiency, for example, by reducing the time it takes for a product to be developed and become available for sale.

Question 4

Define Kaizen

Answer 4

Kaizen is a Japanese term meaning ‘continuous improvement through the elimination of waste
Just-in-time is a production method that involves reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the finished product

Question 5

Define Job Production

Answer 5

Job production is where a single product is made at a time

Question 6

Define Batch Production

Answer 6

Batch production is where a quantity of one product is made, and then a quantity of another item will be produced

Question 7

Define Flow Production

Answer 7

Flow production is where large quantities of a product are produced in a continuous process. It is sometimes referred to as mass production

Question 8

Define Fixed Costs

Answer 8

Fixed costs are costs which do not vary in the short run with the number of items sold or produced. They have to be paid whether the business is making any sales or not. They are also known as overhead costs.

Question 9

Define Variable Cost

Answer 9

Variable costs are costs which vary directly with the number of items sold or produced

Question 10

Define Total Cost

Answer 10

Total costs are fixed and variable costs combined

Question 11

Define Average Cost

Answer 11

Average cost per unit (unit cost) is the total cost of production divided by total output

Question 12

Define Economies of Scale

Answer 12

Economies of scale are the factors that lead to a reduction in average costs as a business increases in size

Question 13

Define Diseconomies of Scale

Answer 13

Diseconomies of scale are the factors that lead to an increase in average costs as a business grows beyond a certain size

Question 14

Define Break even Point

Answer 14

Break-even point is the level of sales at which total costs = total revenue

Question 15

Define Revenue

Answer 15

The revenue of a business is the income during a period of time from the sale of goods or services.

Question 16

Define Quality

Answer 16

Quality means to produce a good or service which means customer expectations

Question 17

Define Quality Control

Answer 17

Quality control is the checking for quality at the end of the production process; it uses quality inspectors as a way of finding any faults

Question 18

Define Quality Assurance

Answer 18

Quality assurance is the checking for quality standards throughout the production process by employees.