Unit 4 Flashcards
Intellectual capital
Intangible capital of a business that includes human capital (well trained, knowledgeable employees), structural capital (databases and information systems) and relational capital (good links with supplier and customer)
Transformational process
An activity or group of activities that transforms one or more inputs, adds value to them, and produces output for customers
Productivity
The ratio of inputs to outputs during production
E.G. output per worker per time period
Level of production
The number of units produced during a period of time
Production
Converting inputs to outputs
Efficiency
Producing output at the highest ratio of output to input
Effectiveness
Meeting the objectives of the enterprise by using inputs productively to meet customer needs
Sustainability of operations
Business operations that can be maintained in the long term, for examples, by protecting the environment and not damaging the quality of life for future generations
Labour intensive
Involving a high level of labour input compared with capital equipment
Capital intensive
Involving a high quantity of capital equipment compared with labour input
Job production
The production of a one-off item specially designed for the customer
Batch production
The production of a limited number of identical products — each item in the batch passes through one stage of production before passing on to the next stage
Flow production
The production of items in a continually moving process
Mass customisation
The use of flexible computer-aided technology on production lines to make products that meet individual customer’s requirements for customised products
Inventory (stock)
Materials and goods required to allow for the production and supply of products to the customer
Inventory management
The process of ordering, storing and using a company’s inventory
Economic order quantity
The optimum or least-cost quantity of stock to reorder taking into account delivery costs and stock holding costs
Buffer inventory
Minimum inventory level that should be held to ensure that continuous production is possible should deliver delays occur or output increase
Re-order quantity
Number of units ordered each time
Lead time
The time between ordering new supplies and their delivery
Re-order level
The level of inventory that triggers a new order to be sent to suppliers
Supply chain
The network of businesses and activities involved in creating a product for sale, starting with the delivery of raw materials and finishing with delivery of the finished product
Supply chain management
Handling the entire production flow of a product to minimise costs but improve customer service
Just-in-time (JIT)
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
Just-in-case (JIC)
This method aims to reduce the risk of running out of inventory to the minimum by holding high buffer inventory levels
Maximum capacity
The highest level of sustained output that can be achieved
Capacity utilisation
The proportion of maximum output capacity currently being achieved
Outsourcing
Using another business (a third party) to undertake a part of production process rather than doing it so the in the business using the firm’s own employees
Excess capacity
This exists when the current levels of output are less than the full capacity output of a business
Rationalisation
Reducing capacity by floating factories/unit of production
Capacity shortage
When demand for a business’s product exceeds production capacity
Business process outsourcing (BPO)
A form of outsourcing that uses specialist contractors to take responsibility for certain business functions
E.G. Human Resources and finance
