Operations Test Definitions

Question 1

Competitive Advantage

Answer 1

2. Refers to the features implemented by a business that create an advantage over its competitors.

Question 2

Vertically Integrate

Answer 2

1. When a business purchases a controlling interest in other businesses in its supply chain.

Question 3

Break-even Point

Answer 3

3. When total revenue from sales equals total costs of operations. Any increase in output and sales means the business will begin to make a profit.

Question 4

Transport Logistics

Answer 4

4. The organisation of the physical movement of inputs and outputs from their point of origin to their destination. The route, method and speed of transportation are all factors to consider when delivering inputs and outputs.

Question 5

Tangible

Answer 5

5. Able to be seen and felt.

Question 6

Trading Bloc

Answer 6

6. A group of nations that have formed a trade alliance by signing a multilateral trade agreement.

Question 7

Bottleneck

Answer 7

7. Where output is limited by one aspect of operations.

Question 8

Total quality management (TQM)

Answer 8

An approach to quality control that relies on
continuous improvement in all aspects of the
business. It is often referred to as kaizen and is
very evident in Japanese manufacturers, such
as Toyota

Question 9

Economies of Scale

Answer 9

8. By increasing the scale of operations, a business can lower the cost of producing each individual output as a result of cost savings and greater efficiency.

Question 10

Jugaad

Answer 10

Originating in India, this term pertains to making
use of what resources are available to complete a
project imminently before it is due; a quick fix to
a problem using whatever is available.

Question 11

Globilisation

Answer 11

Different national economies integrated into one
market for easy trade of goods and services,
and the development of a world economy
owing to the increasing flow of goods, services,
people, finance and information around
the world.

Question 12

Benchmarking

Answer 12

The process of measuring performance against
established standards, such as a comparison
of a firm’s performance against standards set
by competitors in the same industry in the
domestic market

Question 13

Patent

Answer 13

Gives the owner the exclusive rights to sell,
market, license or make a profit from an
invention, innovation or production technique

Question 14

Quality Assurance

Answer 14

Establishing and using a set of procedures and/
or processes that will prevent products from
having problems (such as faults or errors).

Question 15

Obsolescence

Answer 15

Loss of value of, or need for, an object, service
or practice by its becoming less suitable for use

Question 16

max potential … of a business

Productive capacity

Answer 16

The maximum potential output of a business.

Question 17

time between supplier receipt order and delivery of purchaser

Lead Time

Answer 17

The time it takes for a supplier to provide its customer with the goods ordered; that is, the time between the supplier’s receipt of an order for goods until the delivery of those goods to the purchaser.

Question 18

operationscheduling tool involving …

Critical Path Analysis

Answer 18

A scheduling tool used in an operation involving
repetitive tasks, especially if the exact time
each task will take is known

Question 19

Specialisation

Answer 19

A high level of skill at a specific task or role.

Question 20

Efficiency

Answer 20

The achievement of maximum output with the
minimum level of inputs. It involves achieving
an objective without wasting resources and
while keeping costs as low as possible.