Unit 22 The nature of operations

Question 1

What is operations management concerned with?

Answer 1

Operations management are concerned with using the factors of production; inputs to produce goods and services.

Question 2

What are operations managers concerned with?

Answer 2

Efficiency of production - keeping costs as low as possible
Quality - The goods are suitable for the required purpose
Flexibility and innovation - the need to develop new products due to dynamic business environments .

Question 3

What is the transformation process?

Answer 3

It is the process of transforming inputs into finished goods or services and components for other firms. Its aim is to add value to the inputs bought in by the business.

Question 4

Which factors does the value-added depend on?

Answer 4

-Design of the product/ Packaging
- The efficiency with which the inputs are combined and managed
- The ability to convince consumers to pay more for the product than the cost of the inputs.

Question 5

What are the stages of an operations planning process before selling the good?

Answer 5

• Converting a. consumer needs into a product that can be PRODUCED efficiently
• Organising operations so that production is carried out efficiently
• deciding on suitable production methods
• setting quality standards

Question 6

What is intellectual capital?

Answer 6

Intangible capital of a business that includes
- human capital ( knowledgeable employees)
-structural capital (infomation systems and databases)
-relational capital ( good links with supplier and customers)

Question 7

What is production?

Answer 7

Converting inputs into outputs

Question 8

What is productivity?

Answer 8

The ratio of outputs to inputs during production. This measures the productivity of workers.

Question 9

What are ways to increase productivity?

Answer 9

• Employing few but better-skilled workers.
• Utlising fewer but more technologically advanced machines.
• Improving the training of staff to raise skill levels.
• Improve worker motivation, perhaps by involving workers in the decision making process.
• Utilise more technologically advanced machinery
• More efficient management

Question 10

Is raising productivity always the answer? What other factors should be considered?

Answer 10

-The product needs to be bought to awareness by the marketing department, if not sales wouldn’t be achieved, no matter how productive a business is.
- Greater effort and contributions from workers to increase productivity, could lead to much higher wage demands.
- It is the quality of management that will determine the overall success of a policy that aims to increase productivity, If the management involves workers in the working strategies and seek their views, then the productivity improvements are likely to be more significant
.

Question 11

What is efficiency?

Answer 11

Efficiency is measured by productivity. It is produced at the highest ratio of output to input.

Question 12

What is effectiveness?

Answer 12

It is meeting the objectives of the enterprise, by using inputs productively to meet consumer needs. This is an important factor in the long term.

Question 13

What are the factors that influence the method of production?

Answer 13

• What the business wishes to promote and establish, for instance “ hand made “ goods will employ more labour
• The relative prices of the two inputs
• The size of the firm and it’s ability to afford expensive capital equipment

Question 14

What is labor intensity?

Answer 14

The use of high quantity labor input compared to capital equipment .

Question 15

Define capital-intensive production methods.

Answer 15

The use of greater capital equipment than labour.

Question 16

What are the advantages of using labour-intensive production methods?

Answer 16

• To benefit from marketing as a ‘hand made” product.
• Less expensive machinery cost
  -Humans can use their own initiative and problem solving ability.
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