Podcast
Questions and Answers
What is production?
What is production?
The process of converting inputs such as land, labor, and capital into saleable goods.
What is the formula for labor productivity?
What is the formula for labor productivity?
Productivity = total output / total employee
What is JIT in production?
What is JIT in production?
JIT stands for Just-In-Time, where the business holds no inventories and items arrive from suppliers just as they are needed.
What does Kaizen mean?
What does Kaizen mean?
Signup and view all the answers
What are the benefits of Lean production (JIT + Kaizen)?
What are the benefits of Lean production (JIT + Kaizen)?
Signup and view all the answers
What are the features of flow production?
What are the features of flow production?
Signup and view all the answers
Define 'Economies of Scale' and list the types of economies of scale.
Define 'Economies of Scale' and list the types of economies of scale.
Signup and view all the answers
What is the purpose of a Break-even chart?
What is the purpose of a Break-even chart?
Signup and view all the answers
List three benefits of Break-even analysis.
List three benefits of Break-even analysis.
Signup and view all the answers
What factors should firms consider when choosing a production method?
What factors should firms consider when choosing a production method?
Signup and view all the answers
What are the key inputs involved in the production process?
What are the key inputs involved in the production process?
Signup and view all the answers
Explain the concept of JIT in production.
Explain the concept of JIT in production.
Signup and view all the answers
What is Kaizen and how does it relate to production improvement?
What is Kaizen and how does it relate to production improvement?
Signup and view all the answers
List three reasons for holding inventories in production.
List three reasons for holding inventories in production.
Signup and view all the answers
Explain the concept of Lean production and its benefits.
Explain the concept of Lean production and its benefits.
Signup and view all the answers
Explain the relationship between fixed cost, variable cost, and total cost in production.
Explain the relationship between fixed cost, variable cost, and total cost in production.
Signup and view all the answers
Discuss the types of economies of scale and provide examples for each type.
Discuss the types of economies of scale and provide examples for each type.
Signup and view all the answers
What are the causes of diseconomies of scale in production?
What are the causes of diseconomies of scale in production?
Signup and view all the answers
Explain the significance of break-even analysis for businesses.
Explain the significance of break-even analysis for businesses.
Signup and view all the answers
What are the benefits and limitations of break-even analysis?
What are the benefits and limitations of break-even analysis?
Signup and view all the answers
Study Notes
Production Methods
- Job production: production of items one at a time, completed before another, needs highly skilled workers and specialized equipment.
- Batch production: production of goods in batches, each batch passes through one stage of production before moving onto the next stage.
- Flow production: production of very large quantities of identical goods using a continuously moving process, moving continuously along a production line, required for high consumer demand.
Features of Flow Production
- Large quantities
- Standardized products
- Unskilled workers
- Automation
- High large inventories of raw materials and work in progress
Benefits and Limitations of Production Methods
- Factors to consider when choosing a production method: selling amount, product costs, variety of expectation, size of the market, type of good.
- Advantages and disadvantages to businesses, workers, and consumers of using technology.
Cost Classification
- Fixed cost
- Variable cost
- Total cost: fixed cost + total variable cost
- Average cost
Economies of Scale
- Types: financial, managerial, marketing, purchasing, technical economies.
- Causes of diseconomies of scale: poor communication, lack of commitment, lack of coordination.
Break-Even Analysis
- Break-even point: level of output where revenue equals total cost, where the business is making neither profit nor loss.
- Reasons for using break-even: to calculate how many units to sell before making profit, to calculate the effect on profit of increasing or decreasing price, to calculate the effect on profits of an increase or decrease in business costs.
- Purpose of Break-Even chart: to show the relationship between business's revenue and costs at different levels of output.
Benefits and Limitations of Break-Even Analysis
- Benefits: easy to construct and interpret, provides useful information about output, shows the effect of a decision to change costs or revenues.
- Limitations: assumes all costs and revenues can be represented by straight lines, not easy to separate costs.
Operation Management
- Function of OM: cost-effective, meet consumer demand, meet quality standard.
- Productivity: total output/total employee.
- Ways to improve labor productivity: increase output, reduce employee, achieving employee productivity through skill level, motivation, automation, quality of management decision.
Lean Production
- Production of goods and services with minimum waste of resources.
- Reasons for waste: production defects, high inventories, over production, idle resources, transporting goods.
- Just-In-Time (JIT): business holds no inventories, arrived from suppliers just as they are needed, delivered to the customer as soon as they are finished.
- Kaizen: continuous improvement, making suggestions about how to improve quality or productivity.
- Benefits of Lean production: quickly bring new products, improved quality, eliminate waste, eliminate inventory costs, reduce unit cost, increase profit, reduce selling price, increase competitiveness.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on the process of converting inputs into saleable goods, cost-effective strategies, and ways to improve labor productivity in the context of Operation Management.