Unit 3; Outcome 3- Operations Management

Question 1

Operations Management

Answer 1

The area of business that is responsible for the production of goods and/or services.

Question 2

Inputs

Answer 2

The resources used in the process of production.

Question 3

Input Categories

Answer 3

Natural resources and minerals. Physical resources. Human Resources. Financial resources. Time. Info from a variety of sources.

Question 4

Processes

Answer 4

All of the activities that transform the inputs into the final output.

Question 5

Outputs

Answer 5

The final good or service that is delivered or provided to the customer.

Question 6

Manufacturing Business

Answer 6

1) Often relies on heavy machinery and equipment for their inputs
2) Minimal customer involvement during the processes being performed
3) Production processes and consumption of the output are separated
4) Produced tangible outputs
5) Outputs can be stored

Question 7

Service Business

Answer 7

1) Often relies on human labour for their inputs to perform the service
2) Often a high level of customer involvement as the processes are being performed
3) Production processes and consumption of the output often occur at the same time
4) Produced intangible outputs
5) Outputs cannot be stored

Question 8

Automated Production Lines

Answer 8

Machinery and equipment in a sequence with components added to a good as it proceeds through each step, with the processes controlled by computers

Question 9

Computer Aided Design (CAD)

Answer 9

Computerized design tool that allows a business to create product possibilities from a series of input parameters

Question 10

Computer Aided Manufacturing (CAM)

Answer 10

The use of software to direct and control manufacturing processes

Question 11

Robotics

Answer 11

Highly specialized form of technology capable of complex tasks

Question 12

Artificial Intelligence

Answer 12

The ability of a computer or robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence ad discernment

Question 13

Online Services

Answer 13

An internet based presence of a business

Question 14

Materials Management

Answer 14

The strategy that manages the use, storage and delivery of materials to ensure the right amount of inputs
is available when required in the operations system

Question 15

Forecasting

Answer 15

A materials planning tool that relies on data from the past and present and analysis of trends to attempt to determine future events

Question 16

Forecasting- Effect

Answer 16

Efficiency- ensuring enough materials are on hand, leading to a continuous flow, minimises wastage
Effectiveness- helps meet customer demand, enhances the ability to respond to changes in the market
Cons- potential for inaccuracy, time consuming

Question 17

Master Production Schedule (MPS)

Answer 17

A plan that details what is to be produced, in what quantities, where and when

Question 18

MPS- Effect

Answer 18

Efficiency- streamlines production processes, can reduce lead times, reduce over production
Effectiveness- allows the business to plan their resources, reducing costs and improving profits
Cons- can cause less flexibility, increasing costs

Question 19

Materials Requirement Planning (MRP)

Answer 19

Involves producing an itemised list of all materials involved in production to meet the specified orders.

Question 20

MRP- Effects

Answer 20

Efficiency- ensures materials are on hand so there is continuous flow, minimise waste
Effectiveness- reduces delays, can lead to reduced costs
Cons- requires accurate data, costs can be significant

Question 21

Just in Time (JIT)

Answer 21

Ensures that the right amount of material inputs will arrive only as they are needed in the operations process

Question 22

JIT- Effects

Answer 22

Efficiency- reduces storage costs, minimises wastage
Effectiveness- more easily able to adapt, less money tied up in idle stock
Cons- dependent on suppliers, increased delivery costs

Question 23

Quality Control

Answer 23

The use of inspections at various points in the production process to check for problems and defects

Question 24

Quality Control- Effect

Answer 24

Efficiency- identifying errors early, reduces wastage
Effectiveness- consistently good quality products can lead to increases in customer satisfaction and business image
Cons- can slow production, reactive strategy

Question 25

Quality Assurance

Answer 25

The use of a system where the business achieves a set of quality standards (set by an external body) to prevent errors from occurring.

Question 26

Quality Assurance- Effect

Answer 26

Efficiency- fewer errors created, leading to less wastage
Effectiveness- focus on prevention rather than detection
Cons- can be costly and time consuming

Question 27

Total Quality Management (TQM)

Answer 27

An ongoing whole business approach to quality that focuses on continuously improving quality

Question 28

TQM- Effect

Answer 28

Efficiency- reducing wastage, fewer errors
Effectiveness- improved consistency of product quality can lead to increases in customer satisfaction and business image
Cons- can be expensive, requires a change in culture

Question 29

Waste Minimisation

Answer 29

The process of reducing the amount of resources that are unused/discarded in a business.

Question 30

3 R’s- Reduce

Answer 30

Aims to limit the amount of waste produced in the first place

Question 31

3 R’s- Reuse

Answer 31

Focusses on finding new uses for items that would otherwise become waste.

Question 32

3 R’s- Recycle

Answer 32

The process of converting waste materials into new products.

Question 33

Lean Management

Answer 33

A methodology that focuses on minimising waste while simultaneously maximising productivity and value for the end customer.

Question 34

Lean Principles- Pull

Answer 34

Customer demand determines the rate of production. Products are only produced when a customer places an order.

Question 35

Lean Principles- One-piece Flow

Answer 35

Where work in progress moves smoothly from one operation to the next, one piece at a time (continuous flow), reducing waiting time or idle time.

Question 36

Lean Principles- Takt

Answer 36

Refers to the rate of production needed to meet customer demand.
Takt time is the average times that passes between production starting on one unit of a product and the start of production of the next unit, in order to meet demand.

Question 37

Lean Principles- Zero Defects

Answer 37

Errors or defects need to be identified as closely as possible to where they occur.

Question 38

Corporate Social Responsibility (CSR)

Answer 38

The commitment from a business to go above and beyond their legal obligations to operate in an economically, socially and environmentally sustainable manner.

Question 39

Global Outsourcing

Answer 39

The contracting of a specific business operation to an external person or business in another country.

Question 40

Global Outsourcing- Pros/Cons

Answer 40

+ Costs can be reduced, production may be quicker.
- Management may have less control over the production process, may be difficult to maintain quality.

Question 41

Global Sourcing of Inputs

Answer 41

The practice of seeking the most cost-efficient materials and other inputs, including from countries overseas.

Question 42

Global Sourcing of Inputs- Pros/Cons

Answer 42

+ Reducing costs, increasing capacity of total supply.
- Long lead times, difficult to monitor input quality.

Question 43

Overseas Manufacturing

Answer 43

The production of a good in a country that is different to the location of the business’s headquarters.

Question 44

Overseas Manufacturing- Pros/Cons

Answer 44

+ Lower labour costs, a large number of manufacturers.
- Lack of oversight, safety risks.