Chapter 20 The nature of Operations Flashcards Preview

Business studies (A levels) > Chapter 20 The nature of Operations > Flashcards

Flashcards in Chapter 20 The nature of Operations Deck (20)
Loading flashcards...
1
Q

What is Operations Management?

A

‘Operations’ is concerned with the use if resources
called inputs – land, labour and capital – to provide
outputs in the form of goods and services

2
Q

operation managers are concerned with?

A

1 Efficiency of production – keeping costs as low as possible will help to give competitive advantages
2 Quality – the good or service must be suitable for the
purpose intended
3 Flexibility – need to adapt to new processes and new
products is increasingly important in today’s world

3
Q

What is the production process?

A

1 In all businesses at all stages of production, the
production process is basically the same
2 ‘Inputs’ are converted or transformed into ‘outputs’ and
this is sometimes called the ‘transformation’ process
3 This process applies to manufacturing and service
industries
4 By ‘production’ we mean the making of tangible goods,
such as computers, and the provision of intangible
services, such as banking
5 The aim in all cases is to ‘add value’ to the inputs bough in by the business so that the resulting output can be sold at a profit

4
Q

The production process

A
Outputs - finished goods, services, components for other firms.
              ^
              ||
Production Process
              ^
              ||
Inputs- land, labour, capital
5
Q

How can value be added through the production process?

A

1 The design of the product
2 The efficiency with which the input resources are combined and managed
3 The impact of the promotional strategy on convincing consumers to pay more for the product than the cost of the inputs

6
Q

What are the production Inputs?

A

1 Land – all businesses require somewhere to operate from
2 Labour – all business activity requires some labour input
3 Capital – this refers to the tools, machinery, computers and other equipment that businesses use to produce the goods and services they sell

7
Q

What is production?

A

Production means converting inputs into outputs

8
Q

What is productivity?

A

Productivity is the ratio of outputs to inputs during production, e.g. output per worker per time period

9
Q

What is the level of production?

A

The level of production is the number of units produced during a time period

10
Q

How to calculate Labour productivity(number of workers)?

A

Total output in a given time period
__________________________
Total workers employed

11
Q

How to calculate Capital productivity

A

output
____________
capital employed

12
Q

How to raise productivity levels?

A

1 Improve the training of staff to raise skill levels
2 Improve worker motivation
3 Purchase more technologically advanced equipment
4 More efficient management

13
Q

What is Efficiency?

A

Efficiency means producing output at the highest ratio of output to input

14
Q

What is effectiveness?

A

Effectiveness means meeting the objectives of the business by using inputs productively to meet customers’ needs

15
Q

What is meant by labour intensive?

A

Labour intensive means involving a high level of labour input compared with capital equipment

16
Q

What is meant by Capital intensive?

A

Capital intensive means involving a high quantity of capital equipment compared with labour input

17
Q

Labour intensive Advantages

A

1 Marketing advantages of a ‘hand-built’ image

2 More suitable for certain types of job production

18
Q

Labour intensive Disadvantages

A

1 Not as cost effective as capital intensive production

2 Not as efficient as capital intensive production

19
Q

Capital intensive Advantages

A

1 Substantial opportunities for economies of scale and unit-cost reductions offered by large-scale capital utilisation

20
Q

Capital intensive Disadvantages

A

1 Fixed costs tend to be high and the cost of financing the purchase of equipment can be beyond some businesses
2 Maintenance costs are often high
3 Technological change may render capital equipment obsolete and relatively inefficient