Unit 4 - Operations Management

Question 1

Productivity

Answer 1

is the output measured against the inputs used to create it

Question 2

The bu er inventory level

Answer 2

is the inventory held to deal with uncertainty in customer demand and deliveries of supplies

Question 3

Lean production

Answer 3

is a term for those techniques used by business to cut down on waste and therefore increase e ciency, for example, by reducing the time it takes for a product to be developed and become available for sale.

Question 4

Kaizen

Answer 4

is a Japanese term meaning ‘continuous improvement through the elimination of waste

Question 5

Just-in-time

Answer 5

is a production method that involves reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the nished product

Question 6

Job production

Answer 6

is where a single product is made at a time

Question 7

Batch production

Answer 7

is where a quantity of one product is made, and then a quantity of another item will be produced

Question 8

Flow production

Answer 8

is where large quantities of a product are produced in a continuous process. It is sometimes referred to as mass production

Question 9

Fixed costs

Answer 9

are costs which do not vary in the short run with the number of items sold or produced. They have to be paid whether the business is making any sales or not. They are also known as overhead costs.

Question 10

Variable costs

Answer 10

are costs which vary directly with the number of items sold or produced

Question 11

Total costs

Answer 11

are fixed and variable costs combined

Question 12

Average cost per unit (unit cost)

Answer 12

is the total cost of
production divided by total output

Question 13

Economies of scale

Answer 13

are the factors that lead to a reduction in average costs as a business increases in
size

Question 14

Diseconomies of scale

Answer 14

are the factors that lead to an increase in average costs as a business grows beyond
a certain size

Question 15

Break-even point

Answer 15

is the level of sales at which total costs = total revenue

Question 16

The revenue

Answer 16

is the income during a
period of time from the sale of goods or services.

Question 17

Quality

Answer 17

means to produce a good or service which
means customer expectations

Question 18

Quality control

Answer 18

is the checking for quality at the end of the production process; it uses quality inspectors as a way of finding any faults

Question 19

Quality assurance

Answer 19

is the checking for quality standards throughout the production process by employees.