Making operational decisions 2.3

• What is the function of business operations?

  Organizes, produces, and delivers goods
• What types of products can businesses produce?

  Tangible goods and intangible services
• What is the process of transforming raw materials into finished goods called?

  Production
• What is an example of a tangible product?

  Cars
• What is an example of an intangible service?

  Banking
• What does economies of scale refer to?

  Lower cost per item with increased production
• Why do companies gain economies of scale when buying in bulk?

  Reduced managerial costs and packaging
• What are the three main production methods?

  • Job production
  • Batch production
  • Flow production
• What is job production focused on?

  Unique, bespoke one-off products
• What is a disadvantage of job production?

  It is time-consuming and expensive
• What is an example of batch production?

  Ketchup production
• What is flow production characterized by?

  High volumes and low margins
• What is a key advantage of flow production?

  Low cost per unit
• What is productivity defined as?

  Output per worker
• How does technology impact production?

  Increases productivity and quality
• What is specialization in production?

  Each worker focuses on specific tasks
• What is a disadvantage of specialization?

  Boredom due to monotony
• How does technology influence unit costs?

  Increases production, spreading fixed costs
• What is buffer stock?

  Stock held for unforeseen circumstances
• What does a bargate stock graph monitor?

  The flow of stock and lead time
• What is the reorder level in stock control?

  Level that triggers a new order
• What is lead time in stock management?

  Time from order to delivery
• What is the impact of technology on production quality?

  Increases consistency and reduces waste
• What is the purpose of stock control methods?

  To manage inventory effectively
• What is the significance of buffer stock levels?

  Helps manage unexpected demand changes
• What does the term 'just in case' refer to in stock management?

  Stock held for unforeseen circumstances
• What is the relationship between fixed costs and production volume?

  Fixed costs decrease per item with volume
• What is the role of technology in balancing production costs?

  Reduces unit costs in the long run
• What is the significance of measuring productivity over time?

  To assess workforce efficiency and growth
• How does technology improve flexibility in production?

  Allows for different products on same machinery
• What is the impact of technology on workforce efficiency?

  Increases output per worker
• What is the purpose of a practice question in the video?

  To reinforce learning and understanding
• What does the term 'lead time' indicate in stock management?

  Time from placing an order to delivery
• What is the buffer stock level used for?

  To cope with unforeseen circumstances
• What does the reorder quantity depend on?

  Buffer stock level and lead time
• What is the significance of the minimum stock level?

  Indicates when to rely on buffer stock
• What is the role of a computerized system in stock management?

  Automates reorder processes
• What does a bargate stock graph visually represent?

  Stock levels and reorder points
• What is the purpose of stock control methods?

  To manage inventory effectively
• What is the significance of buffer stock levels?

  Helps manage unexpected demand changes