Unit 4 - Operations Flashcards
What is operations
what is responsible for the production of goods and services
What are some key operational objectives
Reduce unit costs
Quality
Added value
Ethical and environmental
What is labour productivity
The volume of output produced by each employee
Calculation for labour productivity
Output/Number of staff
What is unit cost
The cost of producing one unit
What is the calculation for unit cost
Total costs/output
What is maximum capacity
The maximum output a business can produce in a period of time
What is the calculation for capacity utilisation
(Actual output/maximum output) x100
What can operations data be used for
Assess areas of under-performance & to assess potential problems of inefficiencies
What are economies of scale
Savings resulting from increasing the size of the business
How is efficiency improved
Increasing labour productivity
How can labour productivity be improved
Staff training
Recruit better skilled workers
Utilise division of labour
Better machinery
Motivation methods
What are some potential negative consequences of improving labour productivity
Increased workload
Higher wages
What occurs when capacity utilisation increases
Unit cost is lowered as resources are being optimally utilised
What are drawbacks of having a high capacity utilisation
Loss of flexibility
Strain on machines
No time for repairs or maintenance
Quality issues
