Unit 4- Improve Operational Performance

Question 1

What are the 6 operational objectives?

Answer 1

•Costs
•Quality
•speed of response and flexibility
•dependability
•environmental objectives
•added value

Question 2

What are some ways of measuring efficiency?

Answer 2

•labour productivity
•unit costs
•capacity
•capacity utilisation

Question 3

Calculation for labour productivity

Answer 3

Output per period/ no.employees working in that period

Question 4

Capacity

Answer 4

The maximum total level of output or production that a business can produce in a given time period

Question 5

Calculation for capacity utilisation

Answer 5

Capacity used per annum (or month)
/
Maximum possible output per annum (or month)

Question 6

Unit cost

Answer 6

The cost of producing one unit of output

Question 7

Benefits of spare capacity

Answer 7

•Allows a business to plan maintenance time
•less pressure on employees
•can cope with sudden increase in demand
•improvements can be planned

Question 8

Disadvantages of spare capacity

Answer 8

•higher unit costs
•employees may get bored or demoralised

Question 9

What is the ideal percentage for capacity utilisation?

Answer 9

93%

Question 10

Lean production

Answer 10

An approach to production that aims to minimise waste,
Which can reduce costs

Question 11

Just in time production

Answer 11

Aims to hold as little stock as possible, items are ordered just in time to be used

Question 12

Pros and cons of Just in time production

Answer 12

+don’t have to rent a large warehouse
+if items are perishable there is less waste
+all items made are sold
+room for personalisation
+can charge a higher price
+improved relationship with supplier

-may be more expensive
-may take longer to get to customer
-risky if suppliers aren’t reliable
-sudden increase in demand may not be able to be fulfilled

Question 13

Just in case production

Answer 13

A method of operating production with buffer stock just in case a supply shortage or demand increases

Question 14

Kaizen

Answer 14

Kaizen means continuous improvement. It is an approach to production that aims to achieve change from a series of small steps.

Question 15

Lean production methods

Answer 15

•just in time
•kaizen
•Total quality management
•cell production
•waste minimisation

Question 16

Cell production

Answer 16

Organising production around teams instead of a production line. The production is divided into a series of different stages which are undertaken by teams or cells

Question 17

Pros and cons of cell production

Answer 17

+can divide work up
+each cell is responsible for their own work
(improved quality)
+they have control over their own work

-outflow may be less than “flow” production
-may be expensive to invest in equipment for each cell
-cells may work at different speeds (causing tension and conflict)

Question 18

Quality control

Answer 18

A system that uses inspections to check the quality of work at stages of the manufacturing process

Question 19

Pros and cons of quality control

Answer 19

+stops faulty products going to customers
+problems can be fixed

-expensive to operate
-doesn’t encourage team responsibility
-may reduce motivation

Question 20

Quality assurance

Answer 20

A system that improves quality by arranging every process to get products right first time

Question 21

Pros and cons of quality assurance

Answer 21

+reduced costs
+greater consistency
+motivated workforce
+workers take responsibility

-may need a change in company culture
-could increase short term costs
-can take time to get used to

Question 22

Total quality management

Answer 22

An approach to quality in which everyone is focused on preventing errors occurring and ensuring quality at each stage of the production process

Question 23

Supply chain

Answer 23

All the businesses, people and activities that take place in the production process from the start u til it gets the customer

Question 24

On a bar stock graph what is the reorder level?

Answer 24

When reaching it, it acts ad a trigger point so that when stock falls to this level, the next supply order should be placed

Question 25

On a bar stock graph what is the lead time?

Answer 25

Amount of time between placing the order and receiving stock

Question 26

On a bar stock graph what is the minimum stock level ?

Answer 26

Minimum amount of the product the business would want to hold in stock

Question 27

On a bar stock graph what is a buffer stock?

Answer 27

An amount of stock held as a contingency in case of unexpected orders so that such orders can be met and in case of any delays from suppliers