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Business A-Level > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

What is operation management?

A

describes the activities, decisions and responsibilities of managing production and delivery of products and services

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2
Q

What does operation management involve?

A

managing the process of converting inputs into outputs. It transforms resources into products and services

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3
Q

What things are considered when setting operational objectives?

A
  • level of output a business needs to be able to produce
  • range of products a business wants to offer, the level of customer service to provide and how flexible a business wants to be in relation to customer demands
  • how best to produce the good or service: labour intensive and capital intensive
  • how best to provide the good or service to the customer
  • how much of the process managers want the business to provide themselves and how they want to use supplied
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4
Q

What is labour intensive?

A

means that a higher proportion of labour is being used compared to capital equipment

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5
Q

What is capital intensive?

A

means that a higher proportion of capital equipment is being used compared to labour

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6
Q

What is the supply chain?

A

the series of activities involved in taking the initial resources to providing the final product

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7
Q

What are the series of stages throughout the operations process?

A 
1 - raw materials
2 - manufacturing
3 - transportation
4 - retail
5 - disposal / recycling
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8
Q

What are the 4 v’s in categorising operations?

A

volume of output
variety of demand
variability of production
visibility of output

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9
Q

What is the visibility of production

A

refers to how visible the staff are in relation to the final customer (direct contact)

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10
Q

What are the features of having low volume of output?

A
  • high unit costs
  • employees likely to be multiskilled
  • little repetition of tasks
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11
Q

What are the features of having high volume of output?

A
  • low unit costs
  • high repeatability
  • capital intensive
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12
Q

What are the features of having low variability of demand?

A
  • stable
  • routine
  • predictable
  • high capital utilisation
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13
Q

What are the features of having high variability of demand?

A
  • changing levels of capital utilisation
  • need to try and predict demand
  • need flexibility
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14
Q

What are the features of having high visibility of production?

A
  • good customer service skills needed

- flexible in terms of information and communication to customer

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15
Q

What are the features of having low visibility of production?

A
  • limited customer service skills

- time lag between production and consumption

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16
Q

What are the features of having high variety of output?

A
  • flexible
  • quite complex operations to manage
  • high unit costs
  • can meet customer needs precisely
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17
Q

What are the features of having low variety of output?

A
  • routine operations
  • standardised processes
  • low unit costs
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18
Q

What is the operational decision making process?

A 
1 - analyse operations data
2 - make operations decision
3 - implement decisions
4 - review
5 - set operations decision
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19
Q

How can ethics and environment affect operational decisions?

A
  • treatment of employees - increased workload may improve amount produced but place higher stress on employees
  • location factors - locate in low wage location
  • safety
  • environment e.g noise, pollution and emissions
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20
Q

What are 5 operational decisions?

A 
quality 
costs
flexibility
speed
dependability
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21
Q

What is quality as an operational objective?

A

based on what the customers expect and want

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22
Q

What are the benefits of high quality?

A

more competitive

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23
Q

What is speed as an operational objective?

A

producing goods or services faster than competitors

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24
Q

What are the benefits of increasing speed?

A

competitive advantage

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25
Q

What is dependability as an operational objective?

A

the ability to deliver on time

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26
Q

What is flexibility as an operational objective?

A

meeting customer needs better than competitors

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27
Q

What are some other operational objectives?

A

environmental objectives
defect rates
safety targets
speed of response

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28
Q

What is competitive advantage?

A

an advantage a firm has over its competitors to encourage sales from consumers

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29
Q

How do PEST-C factors affect operations?

A
  • political and legal factors - greater legal regulation and concerns over health and safety. This may place restrictions on what can be produced
  • economic factors - greater globalisation enables businesses to source supplies more easily from other countries
  • social factors - there is now greater demand for choice and variety
  • technological factors - technology improved
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30
Q

What is the calculation to work out labour productivity?

A

output (per period) / number of worker (per period)

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31
Q

What is the calculation for unit costs?

A

total costs / total output

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32
Q

What is unit costs also known as?

A

average costs

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33
Q

What is capital utilisation?

A

is about the use that a business makes from its resources

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34
Q

What is the calculation for capital utilisation?

A

current (existing) output / maximum possible output x 100

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35
Q

What does efficient mean?

A

getting more output from a given level of inputs and/or using less resources to achieve a given level of output and quality

36
Q

Why is efficiency important?

A

Lowers unit costs, so they can lower prices or increase profit margins

37
Q

How can efficiency be improved?

A
  • using capacity more effectively - the amount and quality of its employees, capital and land - the maximum produced at that given time
  • choosing the optimal mix of resources
  • increasing labour productivity
  • introducing lean production
  • using technology
38
Q

What would a business do if capacity utilisation is too low?

A
  • try and improve their marketing to boost sales

- reduce its capacity - rationalising or down sizing

39
Q

What would a business do if capacity utilisation is too high?

A
  • outsource to other producers

- find a way to reduce demand in the short term - increase price, waiting list etc

40
Q

What is labour productivity?

A

output per employee

41
Q

How can labour productivity be improved?

A
  • training
  • new reward systems
  • better management
  • new ways of working
  • new technology
42
Q

What are the problems with improving labour productivity?

A
  • rushing leads to quality issues
  • employees wanting higher pay
  • waste through excess stock
43
Q

What will impact on the best (optimal) combination of resources?

A
  • the production process

- what is affordable and achievable

44
Q

What is lean production?

A

when managers reduce waste and therefore operations become more efficient

45
Q

How can lean production reduce waste?

A
  • improving quality - reducing the amount of items needed to be fixed
  • reducing the amount of inventory held
  • reducing the time items are waiting for something to happen to them
  • reducing the time between products are in stages
46
Q

What processes can a business do to become leaner?

A

kaizen
andon cord
changes to the layout of a store or factory
change the process

47
Q

What is kaizen?

A

continuous improvement

48
Q

What are the issues with lean production?

A
  • more vulnerable as hold little to no stock
  • issues in the production process will halt operations - deliveries, absences
  • risk from external factors e.g. weather
  • employees are checking their own work - engaged, skills and training
  • need excellent links to suppliers
  • need excellent communications and technology - expensive
49
Q

How can technology improve operational efficiency?

A
  • flexible to customer needs
  • innovative
  • reduce costs by being more efficient with less errors
50
Q

What are the disadvantages of using technology to improve operational efficiency?

A
  • have to have the finance invest
  • have the training to use it effectively
  • be able to judge which technology will be useful
51
Q

What is quality?

A
  • the extent to which an operation meets its customer requirements
  • a quality good or service is ‘fit for purpose’.
52
Q

What does a quality operation process need?

A
  • clear targets - set to meet customer requirements
    systems to achieve these targets
  • training so employees have the right skills
  • ongoing measurement of what is achieved relative to targets
  • action to be taken if performance does not meet the targets
53
Q

What is the name of the theorists which introduced something to do with quality?

A

Edward Deming

54
Q

What did Edward Deming create?

A

PDCA cycle

55
Q

What is the PDCA cycle?

A

Plan
Do
Check
Act

56
Q

Why is quality so important?

A 
reputation
price
customer satisfaction
repeat sales
standards
57
Q

How can quality be achieved?

A
  • training
  • understanding customer requirements
  • investment in technology
  • new processes
  • selecting the right partners
58
Q

What are the 2 ways which quality can be ensured?

A

quality control

TQM (quality assurance)

59
Q

What is involved in a quality assurance process?

A
  • teamwork
  • quality circles
  • technology
  • kaizen
  • training
  • lean production
  • empowerment
60
Q

What is theory X?

A

according to this view, management must actively intervene to get things done

61
Q

Who created theory X?

A

McGregor

62
Q

What do X-Type organisations tend to be like?

A
  • top heavy, with managers and supervisors required at every step to control workers.
  • little delegation of authority and control remains firmly centralised.
63
Q

What does theory X style of management assume about workers?

A
  • dislike working
  • avoid responsibility and need to be directed
  • have to be controlled, forced, and threatened to deliver what’s needed
  • need to be supervised at every step, with controls put in place
  • need to be enticed to produce results; otherwise they -have no ambition or incentive to work
64
Q

What are the benefits of improving quality?

A
  • reputation
  • price
  • customer satisfaction
  • repeat sales
  • standards - legislation
  • more competitive
  • reliable
  • better brand image
65
Q

What are the difficulties of improving quality?

A
  • rest on their success, don’t push for higher targets, may see it as a criticism
  • extra work - may want higher wages
  • unwilling to suggest improvements - above their pay grade
  • unwilling to carry out the check due to paperwork and increased workload
66
Q

What inventory (stock)?

A

the goods or stock a business holds

67
Q

What are the different type of inventory?

A

inventory of supplies
inventory of work in progress
inventory of finished products

68
Q

What are the costs of holding inventory?

A

storage costs
opportunity costs
security costs
cost of it losing value

69
Q

What is stock rotation?

A

using the oldest stocks first

70
Q

What is stock rotation also known about?

A

FIFO ( first in first off)

71
Q

What is stock wastage?

A

wastage is a cost to the firm through paying for stock that cannot be used

72
Q

When might a business have issues with inventory control?

A
  • supplies are delayed
  • usage rate is faster than usual
  • failure to reorder inventory - generally done electronically
73
Q

How has technology helped with stock control?

A
  • electronic point of sale scanners
  • marketing databases - forecast likely sales
  • communication with suppliers
74
Q

What can businesses do to match supply to demand?

A
  • flexible workforce - multiskilled employees and part time or temporary staff
  • part time staff work less than a full working week
  • queuing systems or waiting lists
  • outsourcing production
  • increasing prices
  • producing to order
75
Q

What is stock wastage?

A

wastage is a cost to the firm through paying for stock that cannot be used

76
Q

When might a business have issues with inventory control?

A
  • supplies are delayed
  • usage rate is faster than usual
  • failure to reorder inventory - generally done electronically
77
Q

What decisions will be involved in managing the supply chain?

A
  • what to produce themselves and what to buy from others

- which other businesses to work with - supplier - build a good relationship or multiple suppliers

78
Q

What can businesses do to match supply to demand?

A
  • flexible workforce - multiskilled employees and part time or temporary staff
  • part time staff work less than a full working week
  • queuing systems or waiting lists
  • outsourcing production
  • increasing prices
  • producing to order
79
Q

What is the supply chain?

A

refers to all of the providers of resources at different stages of the operations process.

80
Q

What are some examples of providers in a supply chain?

A

such as money, people, finance, machinery and equipment

81
Q

What will effective management of the supply chain will mean?

A
  • materials come on time

- fair price is paid for materials

82
Q

How will the way in which the supply chain is managed will affect?

A
  • the extent to which suppliers meet the requirements of the business reliably
  • the costs of the business
  • the ability of the business to be flexible to customer requirements
83
Q

What is outsourcing?

A

occurs when a business uses another provider for some of its goods and services

84
Q

What is good about outsourcing?

A
  • can make use of specialist skills and services - leading to a better quality of worker provided more efficiently
  • increase the capacity of a business
85
Q

What is bad about outsourcing?

A
  • cost and quality of suppliers
  • how does that business behave - ethical?
  • may be more expensive than producing themselves

Business A-Level (11 decks)

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