18/08/2013

Operations Management Key Terms flashcards | Quizlet

Operations Management Key Terms

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Created by: Created by: tamtam84 Subjects: Subjects: business studies Classes: Classes: aswag

on May 10, 2009

45 terms

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Terms
Efficiency

Definitions
Making the most of resources by maximising the output from a given level of inputs. Labour efficiency is output per worker. Production efficiency is percentage of scrap from the production process. The average output of each worker over a period of time - Current output / number of workers The cost of labour needed to produce one unit of output Average cost per unit of output: Expansion achieved through buying or merging with another business The joining of two businesses to create a new organisation The reduction in average cost per unit (purchasing, technical, management specialisation) Increase in average cost per unit (inefficiency, poor communications) The maximum possible output that can be produced with the given resources Planning and controlling the capacity of an organisation to meet the demands of customers
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Labour productivity

Unit labour cost

Unit cost External growth

Merger

Economies of scale

Diseconomies of scale

Capacity

Capacity management
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Operations Management Key Terms flashcards | Quizlet

Capacity utilisation

The proportion of capacity used over a period of time: Current output / Maximum output x 100 Using less than the 100% capacity of the firm. Low utilisation causes fixed costs to be spread over fewer units and so the firm may need to increase capacity utilisation through increasing demand and thus output or rationalising Reorganising a business to reduce capacity and increase efficiency Using the resources of another organisation, or letting out the business's resources in order to increase efficiency High proportion of labour compared to capital High proportion of capital (machinery) compared to labour Continuous movement of items through each stage of production Manufacture of groups of products to meet a specific order. The products will move through the stages of production at the same time. Stored materials such as raw materials, work in progress or finished goods Stock kept in order that production can be increased to meet unexpected demand The benefit lost from the next best alternative foregone. For example, if the firm spends money on training then it may not be able to use the money for new machinery - which will be the benefit lost Cost of lost production, lost sales and customer dissatisfaction when the business runs out of stock The time taken for the supplier to process and deliver an order Staff working beyond their contracted hours in
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Under utilisation

Rationalisation

Subcontracting

Labour intensive Capital intensive

Flow/Mass production

Batch production

Stock

Buffer stock

Opportunity cost

Stock-out costs

Lead time

Overtime
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Operations Management Key Terms flashcards | Quizlet

exchange for a higher hourly wage Stocks Materials or finished goods held by a firm as needed to supply customers demand A product or service that meets customer' expectations and is therefore "fit for purpose" The expectations of customers expressed in terms of the minimum acceptable production or service standards Inspection of products to check they meet necessary standards. Ensuring quality is guaranteed throughout an organisation to meet customer expectations. Each employee is responsible for the quality of his or her own production ie self checking. Internationally recognised certificate that acknowledges the existence of a quality procedure that meets certain conditions (TQM) is an approach to quality that aims to involve all employees in the quality improvement process The manufacture of one-off goods tailor made to meet the specifications of the customer. The use of electronic technology to gather, store, process and communicate information The philosophy of ongoing improvement based around small changes by all employees Formed to encourage new ideas and suggestions from all workers as part of a continuous improvement strategy The contracting of an outside organisation to provide a product or service that might be too expensive, complicated or time-consuming for the business to do itself A period when machinery is not being used, either as a result of maintenance or when parts of the machinery have to be adapted to produce a slightly different unit of production
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Quality product

Quality standards

Quality control

Quality assurance

ISO 9000/9001

Total Quality Management

Job production

Information technology

Continuous improvement (kaizen) Kaizen groups

Outsource

Downtime

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Minimum efficient scale

The smallest output that a business can produce while making sure that its average costs are minimised Commonly known as watchdogs: independent organisations that police specific industries and investigate complaints on behalf of customers Support, advice and information about a product or service given to customers once they have made a purchase Official reassurance given free of charge by the manufacturer of a product to the customer that if the product proves faulty within a specified period their money will be refunded. Similar to guarantees, but normally the customer pays for the extra protection. They are often known as extended warranties or insurance policies against repair and replacement costs Specific and measurable objectives set for each operations activity of a business All the stages in the production process from obtaining raw materials to selling to the consumer - from point of origin to point of consumption Production systems that prevent waste by using the minimum of non-renewable resources so that levels of production can be sustained in the future

Ombudsmen

Customer/After sales service

Guarantees

Warranties

Operational targets

Supply chain

Sustainability

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