unit 4: chapter 22- nature of operations

Question 1

define added value

Answer 1

the difference between the cost of purchasing are materials and the price the finished goods are sold for (same as creating value)

Question 2

define intellectual capital

Answer 2

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

Question 3

define production

Answer 3

converting inputs into outputs

Question 4

define level of production

Answer 4

the number of units produced during a time period

Question 5

define productivity

Answer 5

the ratio of outputs to inputs during production eg output per worker per time period

Question 6

define efficency

Answer 6

producing outputs at the highest ratio of output to input

Question 7

define effectiveness

Answer 7

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

Question 8

define labour intensive

Answer 8

involving a high level of labour input compared with capital equipment

Question 9

define capital intensive

Answer 9

involving a high quantity of capital equipment compared with labour input

Question 10

name 2 factors that the degree of value created and added to inputs will depend on

Answer 10

design of the product, efficient with which the input resources are combined and managed, being able to convince consumers to pay more for the product than the cost of inputs

Question 11

give the 4 stages of the operations process before selling a good or service

Answer 11

converting a consumer need into a product that can be produced efficiently, organizing operations so that production is carried out efficiently, deciding on suitable production methods, setting quality standards and checking they are maintained

Question 12

what are the 3 resources required for all business operations

Answer 12

land, labour, capital

Question 13

how do you calculate labour productivity

Answer 13

total output in a given time period/ total workers employed

Question 14

how do you calculate capital productivity

Answer 14

output/ capital employed

Question 15

what are 2 main ways to raise productivity levels

Answer 15

improve the training of staff to raise skill levels, improve worker motivation, purchase more technologically advanced equipment, more efficient management