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Business IB SL > Unit 5 > Flashcards

Unit 5 Flashcards

1
Q

operations
management

A

concerned with providing the right goods and
services in the right quantities and at the right
quality level in a cost-effective and timely manner

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2
Q

labour intensive

A

when the manufacturing or provision of a product
relies heavily on labour

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3
Q

production process

A

the method of turning factor inputs into outputs
by adding value in a cost-effective way

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4
Q

social sustainability

A

examines social interactions and structures that
are necessary for sustainable development

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5
Q

capital intensive

A

when the manufacturing or provision of a product
relies heavily on machinery and equipment

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6
Q

ecological footprint

A

measures the impact of resource consumption
and waste production on the natural environment

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7
Q

ecological
sustainability

A

the capacity of the natural environment to meet
the needs of the current generation without
jeopardising the ability of future generations to
meet their needs

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8
Q

economic
sustainability

A

the development that meets the economic needs
using existing available resources

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9
Q

green technologies

A

environmentally friendly innovation that consider
the long-term impact on the environment

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10
Q

production methods

A

batch production, mass production, job/
customised productions, flow/process
production, cellular manufacturing

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11
Q

batch production

A

involves producing a set of identical products-
used when the demand for a product is frequent
and steady, multi operations per production, appropriate for manufacturing business

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12
Q

cellular
manufacturing

A

organises workers into independent ‘cells’ with
each team comprising of multi-skilled staff with
responsibility and autonomy for completing a
whole unit of work in the production process

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13
Q

flow production

A

uses continuous and progressive processes,
carried out in sequence, large quantities, standarizedl and simplified products, capital intensive

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14
Q

mass production

A

the large-scale manufacturing of a homogenous
product

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15
Q

job production

A

involves the manufacturing of a unique or one-off
job- can be completed by one person or by a
team of people, single product of a time, highly skilled workforce, appropriate for stort-ups, labour intensive

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16
Q

productivity

A

the level of labour and/or capital efficiency of a
business by comparing its levels of inputs with the
level of its output

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17
Q

standardisation

A

producing an identical or homogenous product in
large quantities, such as printing a particular
magazine, book or newspaper

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18
Q

specialisation

A

the division of a large task or project into smaller
tasks- essential part of mass and flow production

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19
Q

andon

A

a lean production method that uses visual control
systems to indicate the status of an aspect of the
production process

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20
Q

benchmarking

A

the process of identifying best practice in an
industry, in relation to products, processes and
operations

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21
Q

cradle-to-cradle

A

a sustainable model of production based on
natural processes

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22
Q

ISO 9000

A

the world’s most widely recognised standard for
quality management

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23
Q

just-in-time

A

an inventory management system based on stocks
being delivered as and when they are needed in
the production process

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24
Q

kaizen

A

the Japanese term for ‘continuous improvement’ a
lean production philosophy where workers and
managers continually try to find ways to improve
work processes and efficiency

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25
kanban
a method of lean production used to ensure that inventory is based on actual customer orders using a card system
26
lean production
the approach used to eliminate waste in an organisation
27
quality control
the traditional way of quality management that involves checking and reviewing work processes
28
quality management
the function concerned with controlling business activities to ensure that products are fit for their purpose
29
total quality management (TQM)
the process that attempts to encourage all employees to make quality assurance paramount in the various functions of an organisation
30
zero defects
the goal of producing each and every product without any mistakes or imperfections
31
assisted areas
regions identified by the government to be suffering from relatively high unemployment and low incomes
32
bulk-increasing business
involved with the products that increase in weight during the production process
33
bulk-reducing business
businesses that need to locate near the source of raw materials because they are heavier, and hence more costly, to transport than the final product
34
clustering
when a business locates near other organisations that operate in similar or complementary markets
35
footloose organisation
a business that does not gain any cost reducing advantages from locating in a particular location
36
industrial inertia
the reluctance to relocate due to the inconvenience of moving
37
insourcing
the use of an organisation's own people and resources to accomplish a certain function or task which would otherwise have been outsourced
38
offshoring
involves relocating business functions and processes overseas
39
outsourcing
the practice of transferring internal business activities to an external organisation to reduce costs and increase productivity
40
buffer stock
the minimum stock level held by a business in case there are unexpected events e.g. late deliveries
41
capacity utilisation
measures a firm's existing level of output as a proportion of its potential output
42
just-in-case (JIC)
the traditional stock management system that maintains buffer stocks in case there are unexpected fluctuations in supply
43
just-in-time (JIT)
a stock control system whereby materials and components are scheduled to arrive precisely when the are needed in the production process
44
labor productivity
a measure of the efficiency of a firm's workers by calculating the output per worker
45
lead time
the duration between placing an order and receiving it
46
make-or-buy decisions
situations where a firm has to decide between manufacturing a product and purchasing it from a supplier, based on comparing the cost to make (CTM) with the cost to buy (CTB)
47
maximum stock level
the upper limit of inventories that a firm wishes to hold at any point in time
48
minimum stock level
the smallest amount if inventories that a business wishes to hold
49
optimum stock level
the best inventory level for a firm, which ensures that there are sufficient stocks for production whilst incurring minimal costs
50
productive capacity
a firm's maximum output if all its resources are used fully and efficiently
51
productivity rate
the degree of efficiency in the use of resources in the production process
52
re-order level
the level of stock when a new order is placed
53
re-order quantity
the amount of new stock ordered
54
stock-out
occurs if a business does not hold enough stocks to meet orders for publication
55
stockpiling
occurs when a business over-produces so holds too much stock
56
stocks
the materials, components and products used in the production process e.g. raw materials
57
supply chain
the sequence of activities from the production of a good or service to it being delivered to the end customer
58
usage rate
refers to the speed at which stocks are depleted
59
adaptive creativity
a category of incremental innovation that adjusts or develops something that already exists
60
development
the use of research findings to create products that might be commercialised
61
incremental innovation
minor improvements to products or work processes
62
innovation
the process of commercially pioneering new ideas and creations in the production process
63
innovative creativitv
radical in nature as it involves creating something that is new
64
positioning innovation
refers to changing the context of a product, focuses on repositioning the perception of an established product by the use of appropriate innovation strategies
65
process innovation
changes in the way production or delivery takes place i.e. how something is done
66
product innovation
refers to new creations or the development and improvement of existing products e.g. the introduction if existing products
67
prototypes
trail or test products used in the R+D process
68
radical innovation
major and disruptive innovations that tend to involve high risks- can be a major source of competitive advantage
69
research and development
the technological and scientific research that helps to generate a flow of new ideas and processes
70
contingency planning
involves developing a plan before an unwanted or unlikely event occurs by using "what if?" questions to identify all probably threats
71
crisis
a situation of instability that result in major problems for a business
72
crisis management
being reactive to events and disasters that can cause serious disruptions and harm to a business
73
quantifiable risks
probably and financially measurable threats to a business
74
unquantifiable risks
threats to a business that are impossible or prohibitively expensive to examine and measure
75
Evaluate the methods for achieving a TOM culture in a large organization such as Jaguar = a luxury car maker.
There are substantial costs of training workers to be able to take the required responsibility TQM demands. These costs are ongoing as the firm recruits and inducts more labour into the workforce. Appraisal systems within Jaguar will also need to be carefully monitored to ensure employees are able to give feedback to the organization if concerns or issues are raised. TQM increases the degree of bureaucracy and record keeping in ensuring objectives are being met and that the new working environment is being maintained. Jaguar's line managers in particular could be put under significant pressure to ensure TQM is being followed and will have to record significant amounts of data to be able to justify that a TQM culture is having the desired effect. Introducing any new management philosophy is not without risks. It can be simpler in small organizations with a flatter hierarchy and smaller spans of control. In large organizations, such as Jaguar, small incremental improvements in quality may have to be accepted as changing a workforce with many thousands of workers to a TOM culture will take considerable time and capital.
76
Explain the advantages and disadvantages of Jaguar of using just-in-time (JIT) production rather than the more traditional just-in-case (JIC) systems.
Advantages of using JIT production at Jaguar: JIT as part of kaizen demands an approach where TQM is at the centre of the philosophy of operation. Quality becomes the responsibility of a number of stakeholders and so Jaguar should benefit from a reduction in waste, and improved quality of its finished products, to name only two of the benefits. JIT demands minimal level of stocks; for example, it is estimated that the Nissan car plant in Sunderland had managed to keep stocks to only one day's worth of production. This means that working capital is not tied up unnecessarily. Some opportunity costs of holding too much working capital can be avoided. Linked to the above point is the reduction in storage costs, including power, electricity and security, which are not needed as warehouse space to house stocks of components and semi- finished vehicles is not required. Disadvantages of using JIT production at Jaguar: • JIT requires a complete change in organizational culture and a thorough review of the supply chain. The adjustment and transitional costs of these processes can be significant. Economies of scale through ordering bulk quantities of components in the assembly process of vehicles are not experienced with JIT production but they could be with a JIC system. Some aspects of quality assurance for the final vehicle coming off the production line are taken out of the hands of Jaguar. There are potential short-term difficulties as suppliers come to terms with the new working culture. For example, Nissan had its suppliers on call for components 24 hours a day when it was running production through the day and night.
77
Job production advantages
Advantages • The organisation of this production method is simple • The workforce is motivated • Firms produce original and unique products according to the wishes of the customer
78
Job production disadvantages
Disadvantages • High labour costs • Lead times can be lengthy • May become costly once the demand for the good rises
79
Batch production advantages
Advantages • Flexibility: each batch can be altered to meet customers' wishes • Skilled workers are not needed, which decreases costs • Machinery is more standardised, also decreases costs • Firms can respond quickly to changes in demand
80
Batch production disadvantages
Disadvantages • Machinery could be more complex to compensate for the lower skill levels required from the workers • The workforce is less motivated • Money will be tied up in work-in-progress, since an order cannot be dispatched until the whole batch has been finished
81
Flow production advantages
Advantages Unit costs are reduced as firms gain economies of scale The process is highly automated, which reduces the need for labour No need to stock large quantities of goods
82
Flow production disadvantage
Disadvantages Very high set-up costs • No possibility of producing a wide product range and meet different customers' needs • The workforce is not motivated • Breakdowns are costly
83
Contribution
Contribution: the amount of money left ever after variable couts have been auberacted from revenue. The money contributes towards fixed costs and profit. We can calculate either contribution per unit: Contribution per unit = selling price - variable costs per unit Or total contribution: Total contribution = total revenue - total variable costs
84
Cost centres
Cost centres: the departments or units of business that incur (fixed) costs but do not contribute to profit directly (e.g. marketing or HR departments). They must be aware of their costs to help managers operate within the allocated budget, and they must keep their costs below the predicted value.

Business IB SL (9 decks)

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