Topic 4: Operations

• Quality


  is a product or service that meets the needs and expectations of the customer.
• Labour Productivity


  the measure of output per employee in a given period of time
• Unit Cost


  measures how much it cost to produce or sell one item
• Capital Utilisation


  how effectively a business is using its capital resources to generate revenue
• Capacity


  a measure of how much output can be achieved in a given period
• Excess Capacity


  when business is producing less than it is capable of
• Capital Intensive


  the use of machinery and technology in a production process
• Labour Intensive


  the use of people in a production process
• Lean Production


  focus on cutting out waste in terms of time, space and resources
• Kaizen


  is an approach to create continuous improvement in production process
• just-in-time production


  a method of production that aims to reduce waste of materials and products by having as little stock as possible
• Quality Control


  ensure that all their products or services meet the desired level of quality throughout the production process.
• Quality Assurance


  is the process that ensure production quality meets the requirements of customers consistently.
• Outsourcing


  this involves transferring portions of work to outside suppliers
• CAD


  is the use of computer based software to aid in design processes which is digitally create 2D drawings and 3D models of real world objecitves
• CAM


  is the use of software and computer-controlled machinery to automate a manufacturing process
• Mass customisation


  output is tailored according to the requirement of the customer
• Buffer Stock


  excess stock just in case you need it
• Lead Time


  the amount of time between placing the order and receiving the stock
• Re-order Level


  acts as a trigger point so that when stock falls to this level, the next supplier order should be placed
• Economies of Scale


  company produces more and the cost of each item goes down
• Diseconomies of scale


  when a company grows so large that the costs per unit increase
• Supply Chain


  a system of people and organisations that are involved in the process of producing productions to satisfy customer demand