Section 4

Question 1

Intellectual capital

Answer 1

Intangible capital of a business that includes human capital, structural capital and relational capital

Question 2

Production

Answer 2

Converting inputs to outputs

Question 3

Level of production

Answer 3

Number of units produced during a period

Question 4

Productivity

Answer 4

The ratio of outputs to input during production

Question 5

Efficiency

Answer 5

Producing output at the highest ratio of output to input

Measured by productivity

Question 6

Effectiveness

Answer 6

Meeting the objectives of the enterprise by using inputs productively to meet customers needs

Question 7

Labour intensive

Answer 7

Involving a high level of labour input compared with capital equipment

Question 8

Capital intensive

Answer 8

Involving high quantity of capital equipment compared with labour input

Question 9

Operations planning

Answer 9

Preparing input resources to supply products to meet expected demands

Question 10

Computer aided design – CAD

Answer 10

Use of computer programs to create two or three dimensional graphical representations of physical objects

Question 11

Computer aided manufacturing – CAM

Answer 11

Use of computer software control machine tools and related machinery in the manufacturing of components or complete products

Question 12

Flexibility

Answer 12

The ability of a business to vary both the level of production and the range of products following changes in consumer demand

Question 13

Process innovation

Answer 13

Use of a much improved/new production method/service delivery method

Question 14

Job production

Answer 14

Producing a one off item specially designed for the customer

Question 15

Batch production

Answer 15

Producing a limited number of identical products, each item passed through one stage of production before passing onto the next stage

Question 16

Flow production

Answer 16

Producing items in continuously moving process

Question 17

Mass customisation

Answer 17

Use of flexible computer aided production systems to produce items to match individual customers requirements at mass production cost level

Question 18

Optimal location

Answer 18

Business location that gives the best combination of quantitative and qualitative factors

Question 19

Quantitative factors

Answer 19

Measurable in financial terms and will have a different impact on either the cost of the site or the revenues from it and its profitability

~ labour costs
~ transport cost
~ sales revenue potential

Question 20

Qualitative factors

Answer 20

Non measurable factors that may influence business decisions

~ safety
~ ethical considerations
~ environmental concerns
~ room for expansion

Question 21

Off shoring

Answer 21

Relocation of a business process done in one country to the same or another company in another country

Question 22

Multinational

Answer 22

Businesses which operate in production bases in more than one country

Question 23

Trade barriers

Answer 23

Taxes/limitations on free international movement of goods and services

Question 24

Scale of operation

Answer 24

Maximum output that can be achieved using the available inputs at that scale - can only be increased in the long term by employing more of all inputs

Question 25

Economies of scale

Answer 25

Reduction in a firms unit average cost of production that results from an increase in scales of operations

Question 26

Diseconomies of scale

Answer 26

Factors that cause average cost of production to rise when scale of operation is increased

Causes:
~ communication
~ alienating workforce
~ poor co-ordination

Solutions :
> MBO
> decentralisation
> reduce product diversification

Question 27

Enterprise resource planning

Answer 27

Use of a single computer application to plan purchase and use of resources in an organisation to improve efficiency of operation

Question 28

Supply chain

Answer 28

All of the stages in the production process from obtaining raw materials to selling to the consumer

Question 29

Sustainability

Answer 29

Production system that prevents waste by using the minimum of nonrenewable resources so that levels of production can be sustained in the future

Question 30

Inventory

Answer 30

Materials and good required to allow for the production and supply of products to the consumer

Question 31

Economic order quantity

Answer 31

Optimum/least cost quantity of stock to re-order taking into account delivery cost and stockholding cost

Question 32

Buffer inventory

Answer 32

Minimum inventory level that should be held to ensure the production could still take place should a delay in delivery occur or should production rates increase

Question 33

Re-order quantity

Answer 33

Number of units ordered each time

Question 34

Lead time

Answer 34

Normal time taken between ordering new stock and the delivery

Question 35

Just-in-time – JIT

Answer 35

Inventory control method aim is to avoid holding inventory therefore requiring supplies to arrive just in time just as they are needed in production and completed products are produced to order

Question 36

Labour productivity

Answer 36

Total output in a given time

Total workers employed

Question 37

Capital productivity

Answer 37

Output

Capital employed