definitons

• What is productivity?

  The output measured against the inputs used to create it
• What is the formula for productivity?

  Quantity of output / Quantity of input
• What is the formula for labor productivity?

  Output over a given period of time / number of employees
• What is the purpose of buffer inventory level?

  To deal with uncertainty in customer demand and deliveries of supplies
• What does lean production aim to achieve?

  To cut down waste and increase efficiency
• What does the term Kaizen mean?

  Continuous improvement through the elimination of waste
• What is Just-In-Time (JIT) production?

  A method that reduces or eliminates the need to hold inventories of finished products
• What is job production?

  Where a single product is made at a time
• What is batch production?

  Where a quantity of one product is made, then a quantity of another item is produced
• What is flow production?

  Where large quantities of a product are produced in a continuous process
• How does automation differ from mechanisation?

  Automation is controlled by computers, while mechanisation is operated by people
• What is Computer Aided Design (CAD)?

  A software that draws items being designed more quickly
• What is Computer Aided Manufacture (CAM)?

  Where computers monitor the production process and control machines or robots
• What is Computer Integrated Manufacturing (CIM)?

  The total integration of CAD and CAM
• What is Electronic Point of Sale (EPOS)?

  A system used at checkouts where the operator scans the bar code of each item
• What is Electronic Funds Transfer at Point of Sale (EFTPOS)?

  A system where the electronic cash register is connected to the retailer's main computer and banks
• What are fixed costs?

  Costs which do not vary with the number of items sold or produced in the short run
• What are variable costs?

  Costs which vary directly with the number of items sold or produced
• How do you calculate total costs?

  Total costs = fixed costs + variable costs
• What is the average cost per unit?

  The total cost of production divided by the total output
• What are economies of scale?

  Factors that lead to a reduction in average costs as a business increases in size
• What are diseconomies of scale?

  Factors that lead to an increase in average costs as a business grows beyond a certain size
• What is the break-even level of output?

  The quantity that must be produced/sold for total revenue to equal total costs
• What do break-even charts show?

  How costs and revenues of a business change with sales and the break-even level of output
• What is revenue?

  The income during a period of time from the sale of goods and services
• What is the formula for total revenue?

  Total Revenue = Quantity Sold x Price
• What is the break-even point?

  The level of sales at which total costs equal total revenue
• What is contribution in business terms?

  Contribution = Selling Price - Variable Costs
• What is the break-even formula?

  Break-Even = Total Fixed Costs / Contribution per Unit
• What is quality in a business context?

  To produce a good service which meets customer expectations
• What is quality control?

  The checking for quality at the end of the production process
• What is quality assurance?


  The checking for quality standards throughout the production process
• production Production is the amount of output produced or the number of customers served.