Unit 4

Question 1

Intellectual Capital

Answer 1

intangible capital of a business that
includes human capital (well trained and knowledgeable
employees), structural capital (databases and information
systems) and relational captial (good links with supplier
and customers).

Question 2

Production

Answer 2

Converting inputs into outputs

Question 3

Level of production

Answer 3

The number of units produced during a time period.

Question 4

Productivity

Answer 4

the ratio of outputs to inputs during
production, e.g. output per worker per time period.

Question 5

Efficiency

Answer 5

producing output at the highest ratio of output
to input.

Question 6

Effectiveness

Answer 6

meeting the objectives of the enterprise by
using inputs productively to meet customers’ needs.

Question 7

Labor intensive

Answer 7

involving a high level of labor input
compared with capital equipment.

Question 8

Capital intensive

Answer 8

involving a high quantity of capital
equipment compared with labor input.

Question 9

Operations planning

Answer 9

preparing input resources to supply
products to meet expected demand.

Question 10

CAD – computer aided design

Answer 10

the use of computer
programs to create two- or three-dimensional (2D or 3D)
graphical representations of physical objects.

Question 11

CAM – computer aided manufacturing

Answer 11

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

Question 12

Operational flexibility

Answer 12

the ability of a business to vary
both the level of production and the range of products
following changes in customer demand.

Question 13

Process innovation

Answer 13

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

Question 14

Job production

Answer 14

producing a one-of item specially
designed for the customer.

Question 15

Batch Production

Answer 15

producing a limited number of
identical products – each item in the batch passes through
one stage of production before passing on to the next stage.

Question 16

Flow production

Answer 16

producing items in a continually
moving process.

Question 17

Mass customization

Answer 17

the use of flexible computer-
aided production systems to produce items to meet individual customers’ requirements at mass-production
cost levels.

Question 18

Optimal Location

Answer 18

a business location that gives the best
combination of quantitative and qualitative factors.

Question 19

Quantitative Factors

Answer 19

these are measurable in financial
terms and will have a direct impact on either the costs of
a site or the revenues from it and its profitability.

Question 20

Qualitative factors

Answer 20

non-measurable factors that may
influence business decisions.

Question 21

Multi-site location

Answer 21

a business that operates from more
than one location.

Question 22

Offshoring

Answer 22

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

Question 23

Multinational

Answer 23

a business with operations or production
bases in more than one country.

Question 24

Trade barriers

Answer 24

taxes (tariffs) or other limitations on the
free international movement of goods and services.

Question 25

Scale of operation

Answer 25

the maximum output that can be
achieved using the available inputs (resources) – this scale
can only be increased in the long term by employing more
of all inputs.

Question 26

Economies of scale

Answer 26

reductions in a firm’s unit (average)
costs of production that result from an increase in the scale
of operations.

Question 27

Diseconomies of scale

Answer 27

factors that cause average
costs of production to rise when the scale of operation is
increased.

Question 28

Enterprise resource planning

Answer 28

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 29

Supply chain

Answer 29

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 30

Sustainability

Answer 30

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

Question 31

Inventory (stock)

Answer 31

materials and goods required to allow
for the production and supply of products to the customer.

Question 32

Economic order quantity

Answer 32

the optimum or least-cost
quantity of stock to re-order taking into account delivery
costs and stock-holding costs.

Question 33

Just-in-time

Answer 33

this inventory-control method aims to avoid
holding inventories by requiring supplies to arrive just as
they are needed in production and completed products
are produced to order.

Question 34

Re-order quantity

Answer 34

the number of units ordered each
time.

Question 35

Lead time

Answer 35

the normal time taken between ordering new
stocks and their delivery.