Section 4 - Operations management (Chap 10 - 17) - stocks, production productivity, costs, break even, EOS, quality production

Question 1

what does operations management do

Answer 1

-process input to give output
-has multiple manager in charge of different things

Question 2

labor/ capital productivity formula (humans/ machines)

Answer 2

output/ no. humans/ machines

Question 3

productivity formula

Answer 3

no. output/ no. input

Question 4

what do manufacturing businesses have typically

Answer 4

-factory manager - responsible for no. & quality of products
-purchasing manager - provides materials
-research & development manager - responsible for design & testing of new products

Question 5

define production

Answer 5

making products/ services

Question 6

labor productivity formula

Answer 6

no. output/ no. employees

Question 7

define productivtiy

Answer 7

-how efficiently products are made

Question 8

ways to increase productivity

Answer 8

-improve quality control to reduce waste
-employee motivation
-new technology
-use machines instead of people
-train staff to be more efficient
-improve inventory control

Question 9

what happens when too less/ more inventory

Answer 9

less:
-run out of stocks
-no production
-waste money
more:
-storage & security cost up
-shelf life - lead to wastage
-money spent at first

Question 10

define stocks

Answer 10

resources needed to make goods/ provide service

Question 11

3 types of stocks

Answer 11

-raw materials: basic form
-work in progress: some work done
-finished goods: final product

Question 12

define stock chart

Answer 12

chart used to help maintain stocks

Question 13

how does stock chart work

Answer 13

-quantity over time
-max, reorder & min. level where stocks should not go over/ below max & min.
ideally:
-start at max level and slowly go down
-once below reorder level, order stocks again
-when min. level (buffer inventory), restocks come
-line down is usage of stocks
-line up is restocks

Question 14

define buffer inventory

Answer 14

stocks held for uncertain delivery of supply or customer demands

Question 15

types of waste in produciton

Answer 15

-overproduction - storage cost, possible damage
-waiting - good’s aren’t being processed
-transport - moving goods around
-unnecessary inventory - takes up space
-motion - action by employee wastes time
-over processing - machine for simple tasks
-defects - waste time inspecting product

Question 16

define lean production

Answer 16

-producing goods using fewer resources without dropping quality

Question 17

define buffer inventory

Answer 17

stocks held to deal with uncertain deliveries of supply & customer demand

Question 18

ways to do lean production & what they cause

Answer 18

-cut down wastage
-store less raw materials
-better use of equipment
-use each resource to the max
-practice kaizen
-practice just in time
cause:
-more efficiency
-less cost
-more saving

Question 19

define just in time

Answer 19

-a method to avoid keeping large stocks of raw materials & finished goods
-save money & space

Question 20

define kaizen

Answer 20

continuous improvement by reducing waste

Question 21

ways to do kaizen & what they cause

Answer 21

-don’t have too many goods which won’t be sold on time = no loss
-get supplies right on time = no loss
-less holidays for workers = more efficiency
-no expensive machine for simple tasks = better us of materials
-no faulty products = save time to fix them
-eg. reduce time for workers to walk btw jobs

Question 22

ways to do just in time & what they cause

Answer 22

-buy raw materials only when needed
-make product just in time to give to customer
cause:
-no cost to hold stocks
-warehouse space not needed = less cost
-product sold quickly, money comes back, better cash flow

Question 23

note: rationalize stocks depending on price & frequency of use

Question 24

define cell production

Answer 24

-where groups of people work together in cells to produce the final product
-promotes healthy rivalry
-motivates = more efficient, less likely for strike

Question 25

3 method of production

Answer 25

-job production
-batch production
-flow production

Question 26

define job production & eg.

Answer 26

-making 1 product at a time
eg. houses, tailors

Question 27

advantages of job production

Answer 27

-for customized products - can charge high price
-product meets exact requirement of customer
-more varied tasks for workers = more motivation

Question 28

disadvantages of job production

Answer 28

-need skilled workers = more cost
-labor intensive = expensive
-takes long time
-errors can be expensive
-materials specifically bought = high cost

Question 29

define batch production & eg.

Answer 29

-products of same batch made in limited quantity
eg. bakeries, clothes

Question 30

advantages of batch production

Answer 30

-production can change from 1 product to another
-variety for workers = motivation
-variety consumer choices

Question 31

disadvantages of batch production

Answer 31

-expensive
-machines reset btw production = delay in production
-need warehouse space for stocks
-quality may differ from batch to batch
-if quality is bad: recall products with batch no. compensate, loss of money & reputation

Question 32

define flow production

Answer 32

-producing the same product in unlimited quantities
-eg. cars, food

Question 33

advantages of flow production

Answer 33

-high output
-low cost = low prices = high sales
-capital intensive = low labor cost, more efficiency
-capital intensive = unskilled workers, little training
-operate 24/7 = more output
-consistent quality

Question 34

disadvantages of flow production

Answer 34

-demotivation for workers
-need lots of stock storage
-production line set up is expensive
-if a machine breaks down, production line stops
-needs a huge demand for product
-little variety in products

Question 35

factors affecting production choice

Answer 35

-nature of product = type of product/ service
-nature of demand = high demand, batch/ flow production
-size of market = bigger market, bath/ flow production
-size of business = how much money business wants to invest

Question 36

types of technology in production

Answer 36

-Automation: comp. control production process, few workers oversee process
efficient, more precise, training workers cost
-Mechanization: machines in factory operated by humans
use machine to do dangerous tasks, training workers cost, 24/7, accurate machines
-CAD: Comp. Aided Design - designing products done through comp. eg. software
expensive, for detailed technical drawings
-CAM: Comp. Aided manufacturing - comp. controls factory machines
expensive
-CIM: Comp. Integrated manufacturing - CAD linked to CAM

Question 37

types of technology in payments

Answer 37

-EPOS: Electronic Point of Scale - in checkouts
product detail & payment goes to database of things bought
print receipts
-EFTPOS: Electronic Funds Transfer at Point of Sale eg. credit car, QR code
online money in bank transferred after payment by swiping card
-Contactless payment:
paying without pressing buttons for small amounts of money
fast, easy

Question 38

advantages of technology in production/ services

Answer 38

-more efficient, more output, more productivity
-less workers, can lower prices
-less expensive in long run
-training will make workers skilled = motivated workers
-better and consistent quality
-safer workers
-better com. with comp.

Question 39

disadvantages of technology in production/ services

Answer 39

-initially expensive
-unemployment
-demotivation
-training workers cost money
-bad for environment
-tech. gets outdated quickly
-cyber attacks
-maintenance