Section4-operstional Objectives

Question 1

What are some of the operational objectives that are set?

Answer 1

Quality 
Costs
Flexibility 
Efficiently 
Innovation

Question 2

What is added value and how do you increase it?

Answer 2

This is increasing the difference between the costs of raw materials and selling price

Sales revenue DIVIDED by costs of bought goods and services

Question 3

What is flow production?

Answer 3

Mass production of a continuous line

Question 4

What’s batch production?

Answer 4

Production of small batches with identical items

Question 5

What’s lean & cell production?

Answer 5

Lean- reducing waste

Cell-production split into talks and each complete by a work group

Question 6

What is the capacity of an organisation?

Answer 6

The maximum output that it can produce in a given period with out buying anymore fixed assets

Question 7

What is Capacity utilisation and how is it calculated?

Answer 7

How much capacity the business is using

Current output DIVIDED by MAX output X100

Question 8

Why is 90% capacity utilisation better than 100%?

Answer 8

At 100%

• Quality levels may not be as high
• may have to turn away potential customers
• no downtime for machines so delays of some breakdown
• no margin for error meaning increased stress for managers