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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
Q

kanban

A

a method of lean production used to ensure that
inventory is based on actual customer orders
using a card system

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26
Q

lean production

A

the approach used to eliminate waste in an
organisation

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27
Q

quality control

A

the traditional way of quality management that
involves checking and reviewing work processes

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28
Q

quality management

A

the function concerned with controlling business
activities to ensure that products are fit for their
purpose

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29
Q

total quality
management (TQM)

A

the process that attempts to encourage all
employees to make quality assurance paramount
in the various functions of an organisation

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30
Q

zero defects

A

the goal of producing each and every product
without any mistakes or imperfections

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31
Q

assisted areas

A

regions identified by the government to be
suffering from relatively high unemployment and
low incomes

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32
Q

bulk-increasing
business

A

involved with the products that increase in weight
during the production process

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33
Q

bulk-reducing
business

A

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

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34
Q

clustering

A

when a business locates near other organisations
that operate in similar or complementary markets

35
Q

footloose
organisation

A

a business that does not gain any cost reducing
advantages from locating in a particular location

36
Q

industrial inertia

A

the reluctance to relocate due to the
inconvenience of moving

37
Q

insourcing

A

the use of an organisation’s own people and
resources to accomplish a certain function or task
which would otherwise have been outsourced

38
Q

offshoring

A

involves relocating business functions and
processes overseas

39
Q

outsourcing

A

the practice of transferring internal business
activities to an external organisation to reduce
costs and increase productivity

40
Q

buffer stock

A

the minimum stock level held by a business in case
there are unexpected events e.g. late deliveries

41
Q

capacity utilisation

A

measures a firm’s existing level of output as a
proportion of its potential output

42
Q

just-in-case (JIC)

A

the traditional stock management system that
maintains buffer stocks in case there are
unexpected fluctuations in supply

43
Q

just-in-time (JIT)

A

a stock control system whereby materials and
components are scheduled to arrive precisely
when the are needed in the production process

44
Q

labor productivity

A

a measure of the efficiency of a firm’s workers by
calculating the output per worker

45
Q

lead time

A

the duration between placing an order and
receiving it

46
Q

make-or-buy
decisions

A

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
Q

maximum stock
level

A

the upper limit of inventories that a firm wishes to
hold at any point in time

48
Q

minimum stock level

A

the smallest amount if inventories that a business
wishes to hold

49
Q

optimum stock level

A

the best inventory level for a firm, which ensures
that there are sufficient stocks for production
whilst incurring minimal costs

50
Q

productive capacity

A

a firm’s maximum output if all its resources are
used fully and efficiently

51
Q

productivity rate

A

the degree of efficiency in the use of resources in
the production process

52
Q

re-order level

A

the level of stock when a new order is placed

53
Q

re-order quantity

A

the amount of new stock ordered

54
Q

stock-out

A

occurs if a business does not hold enough stocks
to meet orders for publication

55
Q

stockpiling

A

occurs when a business over-produces so holds
too much stock

56
Q

stocks

A

the materials, components and products used in
the production process e.g. raw materials

57
Q

supply chain

A

the sequence of activities from the production of
a good or service to it being delivered to the end
customer

58
Q

usage rate

A

refers to the speed at which stocks are depleted

59
Q

adaptive creativity

A

a category of incremental innovation that adjusts
or develops something that already exists

60
Q

development

A

the use of research findings to create products
that might be commercialised

61
Q

incremental
innovation

A

minor improvements to products or work
processes

62
Q

innovation

A

the process of commercially pioneering new
ideas and creations in the production process

63
Q

innovative creativitv

A

radical in nature as it involves creating something
that is new

64
Q

positioning
innovation

A

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
Q

process innovation

A

changes in the way production or delivery takes
place i.e. how something is done

66
Q

product innovation

A

refers to new creations or the development and
improvement of existing products e.g. the
introduction if existing products

67
Q

prototypes

A

trail or test products used in the R+D process

68
Q

radical innovation

A

major and disruptive innovations that tend to
involve high risks- can be a major source of
competitive advantage

69
Q

research and
development

A

the technological and scientific research that
helps to generate a flow of new ideas and
processes

70
Q

contingency
planning

A

involves developing a plan before an unwanted
or unlikely event occurs by using “what if?”
questions to identify all probably threats

71
Q

crisis

A

a situation of instability that result in major
problems for a business

72
Q

crisis management

A

being reactive to events and disasters that can
cause serious disruptions and harm to a business

73
Q

quantifiable risks

A

probably and financially measurable threats to a
business

74
Q

unquantifiable risks

A

threats to a business that are impossible or
prohibitively expensive to examine and measure

75
Q

Evaluate the methods for achieving a TOM culture in a large
organization such as Jaguar = a luxury car maker.

A

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
Q

Explain the advantages and disadvantages of Jaguar of using
just-in-time (JIT) production rather than the more traditional
just-in-case (JIC) systems.

A

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
Q

Job production advantages

A

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
Q

Job production disadvantages

A

Disadvantages
• High labour costs
• Lead times can be lengthy
• May become costly once the demand
for the good rises

79
Q

Batch production advantages

A

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
Q

Batch production disadvantages

A

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
Q

Flow production advantages

A

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
Q

Flow production disadvantage

A

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
Q

Contribution

A

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
Q

Cost centres

A

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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