The nature of operations Flashcards
What are the 4 factors of production? (Define them)
- Land: Place of operation.
- Labour: Workers.
- Capital: Tools, machinery, computers and other equipment that businesses use to produce the goods and services they sell.
- Enterprise: The decision-making skills and risk-taking qualities of
entrepreneurs are essential for new business formation.
State ways operation managers can increase added value by effectively managing.
- Efficiency of production is crucial for gaining a competitive advantage by minimizing costs.
- Quality: Goods or services must be suitable for the purpose intended.
- The design of the product.
What are the 4 main ways in which productivity could be increased?
- Enhance employee training to boost skill levels and productivity, but costly and time-consuming, as highly qualified workers may leave to join another business.
- Utilizing both financial and non-financial motivation methods can enhance worker motivation, leading to increased efficiency and productivity, ultimately resulting in lower production costs.
- Invest in advanced machinery for increased output with fewer workers, but maintain high output levels, retrain workers, and address job loss and employment security concerns.
- Ineffective management can decrease a business’s productivity by causing issues like incorrect material purchases, poor machine maintenance, and demotivating employee management methods.
What are benefits of increasing sustainability?
- Reducing energy use can reduce energy costs.
- Reducing waste from operations will also reduce production costs.
- Making recyclable products reduces the cost of waste disposal.
- Reducing use of plastic and non-biodegradable materials will attract more demand from green consumers.
What are limitations and costs of increasing sustainability?
- Might require capital investment.
- Recycled materials might need to be cleaned/processed before use.
- Development of recyclable products can be expensive and time-consuming.
- Might need investment in worker training and more accurate equipment.
What are advantages of labour intensive?
- Interesting and varied work.
- Low machine costs.
- One-off designs meet customer requirements such as exclusive furniture.
What are limitations of labour intensive?
- Low output levels.
- Skilled, high-paid workers required.
- Product quality depends greatly on the skill and experience of each worker.
What are advantages of capital intensive?
- Economies of scale.
- Consistent quality.
- Low unit costs of production.
- The ability to supply the mass market.
What are limitations of capital intensive?
- High fixed costs.
- Cost of financing the equipment.
- High maintenance costs and the need for skilled workers to do repairs.
- Quick pace of technological change, making latest production equipment and computer systems obsolete and relatively inefficient.
What is required of job production?
Highly skilled workers
What are advantages of job production?
- Allows for specialist projects or jobs, often with high added value.
- High levels of worker motivation.
What are disadvantages of job production?
- High unit production costs.
- Time-consuming.
- Wide range of tools and equipment needed.
What is required of batch production?
Labour and machines must be flexible to switch to making batches of other designs.
What are advantages of batch production?
- Some economies of scale.
- Faster production with lower unit costs than job production.
- Some flexibility in design of product in each batch.
What are disadvantages of batch production?
- High levels of inventory at each production stage.
- Unit costs likely to be higher than with flow production.
