The nature of operations 4.1

Question 1

Define the term “Production”

Answer 1

Converting inputs into outputs.

Question 2

Define the term “Level of production”

Answer 2

The number of units produced during a time period.

Question 3

Define the term “Productivity”

Answer 3

The ratio of outputs to inputs during production.

Question 4

Define the term “Efficiency”

Answer 4

Producing output at the highest ratio of output to input.

Question 5

Define the term “Effectiveness”

Answer 5

Meeting the objectives of the enterprise by using inputs productively to meet customer’s needs.

Question 6

Define the term “Labor intensive”

Answer 6

Involving a high level labor input compared with capital equipment.

Question 7

Define the term “Capital intensive”

Answer 7

Involving high quantity of capital equipment compared to labor input.

Question 8

Define the term “Operations planning”

Answer 8

Preparing input resources to supply products to meet expected demand.

Question 9

Define the term “Computer aided design (CAD)”

Answer 9

The use of computer programs to create 2 or 3D graphical representations of physical objects.

Question 10

Define the term “Computer aided manufacturing (CAM)”

Answer 10

The use of computer software to control machine tools and related machinery in the manufacturing of components or complete products.

Question 11

Define the term “Process innovation”

Answer 11

The use of a new or much improved production method or service delivery method.

Question 12

Define the term “Job production”

Answer 12

Producing a unique item specifically designed for the customer.

Question 13

Define the term “Batch production”

Answer 13

Producing a limited number of identical products before moving onto producing another group of identical products.

Question 14

Define the term “Flow production”

Answer 14

Producing items in a continually moving process.

Question 15

Define the term “Mass customization”

Answer 15

The use of flexible computer-aided production systems to produce item to meet individual customers requirements at pass production cost levels.

Question 16

List 2 Advantages of job production.

Answer 16

1. Able to undertake specialist projects or jobs often with high added value.
2. High levels of worker motivation

Question 17

List 2 Disadvantages of job production.

Answer 17

Answers may include :
- High unit production costs
- Time consuming
- Wide range of tools and equipment needed

Question 18

List 2 Advantages of batch production.

Answer 18

Answers may include :
- Some economies of scale to benefit from
- Faster production with lower unit costs than job production
- Some flexibility in design of product in each batch

Question 19

List 2 Disadvantages of batch production.

Answer 19

1. High levels of stocks at each production stage.
2. Unit costs likely to be higher than with flow production.

Question 20

List an Advantage of flow production.

Answer 20

Low unit cost due to constant working of machines, high labor productivity and economies of scale.

Question 21

List 2 Disadvantages of flow production.

Answer 21

1. Inflexible as it is difficult and time consuming to switch to another type of product.
2. Expensive to set up the machinery.

Question 22

List an Advantage of mass customization.

Answer 22

Combines low unit costs with flexibility to meet customer’s individual requirements.

Question 23

List 2 Disadvantages of mass customization.

Answer 23

1. Expensive product redesign may be needed to allow key components to be switched to allow variety.
2. Expensive flexible capital equipment needed.

Question 24

Define the term “Optimal location”

Answer 24

A business location that gives the best combination of quantitative and qualitive factors.

Question 25

Define the term “Multi-site location”

Answer 25

A business that operates in more than one location.

Question 26

Define the term “Offshoring”

Answer 26

The relocation of a business process done in one country to the same or another company in another country.

Question 27

Define the term “Multinational”

Answer 27

A business with operational or production bases in more than one country.

Question 28

List 3 Advantages of multi-site location businesses

Answer 28

Answers may include :
- Greater convenience for consumers
- Lower transportation costs
- Opportunities for delegation of authority to regional managers from head office. This helps to develop staff skills and improve motivation.
- Cost advantage of multi-sites in different countries.

Question 29

List 3 Disadvantages of multi-site location businesses

Answer 29

Answers may include :
- Coordination problems between locations.
- Potential lack of control and direction from senior management based at head office.
- Different cultural standards and legal systems in different countries.
- if sites are too close to each other, there may be a danger of “cannibalism” where one restaurant or store takes sales away from another owned by the same business.

Question 30

Define the term “Trade barriers”

Answer 30

Tariffs or other limitations on the free international movements of goods and services.

Question 31

Define the term “Scale of operation”

Answer 31

The maximum output that can be achieved using the available inputs.

Question 32

Define the term “Economies of scale”

Answer 32

Reduction in a firm’s unit costs of production that results from an increase in the scale of operations.

Question 33

Define the term “Diseconomies of scale”

Answer 33

Factors that cause average costs of production to rise when the scale of operation’s increased.

Question 34

Define the term “Enterprise resource planning”

Answer 34

The use of a single computer application to plan the purchase and use of resources in an organization to improve the efficiency of operations.

Question 35

Define the term “Supply chain”

Answer 35

All of the stages in the production process from obtaining raw materials to selling to the consumer from point of origin to point of consumption.

Question 36

Define the term “Sustainability”

Answer 36

Production systems that prevent waste by using the minimum if non-renewable resources so that levels of production can be sustained in the future.