Unit 5: Operations Management

Question 1

Economic Sustainability

Answer 1

The need to use available resources and raw materials to their best advantage
Ultimately ensures profitability and financial performance

Question 2

Social Sustainability

Answer 2

The need to take human factors into account both internally and externally when making business decisions

Question 3

Ecological Sustainability

Answer 3

The need to take environmental factors into account when making business decisions (especially about nature and ecosystems)

Question 4

Triple Bottom Line

Answer 4

The need to take economic, social and ecological factors into account when making decisions (the 3Ps)

Question 5

Job Production

Answer 5

Production of a special “one-off” product made to a specific order
Tailored to each individual customer

Question 5

Batch Production

Answer 5

Production of a group of identical products
Items in each group go together from one stage of production to the next

Question 6

Mass Production

Answer 6

Production of a high volume of identical, standardised products

Question 7

Mass Customization

Answer 7

Combines mass-production with the personalization of custom-made products for marketing purposes
Relatively low-cost while still maintaining some degree of customizability

Question 8

Lean Production (HL)

Answer 8

A Japanese approach to operations management
Focuses on less waste and greater efficiency

Question 9

Kaizen (HL)

Answer 9

A method of lean production based on continuous improvement

Question 10

Just-in-Time (HL)

Answer 10

A method of stock control
Avoids holding stock by getting supplies only when necessary and producing only when ordered

Question 11

Just-in-Case (HL)

Answer 11

A method of stock control
Involves holding reserves of both raw materials and finished products in case of a sudden increase in demand

Question 12

Cradle-to-Cradle Manufacturing (HL)

Answer 12

A recent approach to design and manufacturing
Based on principles of sustainable development, especially recycling

Question 13

Quality Control (HL)

Answer 13

Quality of products is assessed through an inspection after the production run has been completed
Production is rarely halted and a small percentage of products are allowed to fail

Question 14

Quality Assurance (HL)

Answer 14

Quality of products is ensured by involving the entire organisation in overseeing quality
Production is halted often and zero defects are tolerated

Question 15

Quality Circle (HL)

Answer 15

A formal group of employees who meet regularly
Discuss and suggest ways of improving quality in the organisation

Question 16

Benchmarking (HL)

Answer 16

A tool for businesses to compare themselves to their competitors
Allows businesses to identify how they can improve their own operations and practices

Question 17

Total Quality Management (HL)

Answer 17

An approach to quality enhancement that permeates the whole organisation
Can include quality circles and benchmarking

Question 18

Outsourcing or Subcontracting

Answer 18

The practice of employing another business to perform some peripheral activities
This enables the organisation rto focus on its core activity

Question 19

Offshoring

Answer 19

The practice of subcontracting overseas, or outsourcing outside the home country

Question 20

Insourcing

Answer 20

The practice of performing peripheral activities internally, within the company
The opposite of outsourcing

Question 21

Reshoring

Answer 21

The practice of bringing back business functions (jobs and operations) to the home country
The opposite of offshoring

Question 22

Contribution per Unit

Answer 22

The difference between selling price per unit and variable cost per unit

Question 23

Total Contribution

Answer 23

The difference between total sales revenue and total variable costs

Question 23

Profit

Answer 23

Obtained by subtracting total fixed costs from the total contribution
The positive difference between total revenue and total costs

Question 24

Break-Even Chart

Answer 24

A graphical method that measures the value of a firm’s costs and revenues against a given level of output

Question 25

Break-Even Quantity

Answer 25

A measure of output where total revenue equals total costs

Question 26

Margin of Safety

Answer 26

The output amount that exceeds the break-even quantity

Question 27

Target Profit Output

Answer 27

The level of output that is needed to earn a specified amount of profit