Commercial Production (IB)

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16 Terms

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Just in Time (JIT)

A situation where a company does not allocate space to the storage of components or completed items, and instead orders or manufactures them when required.

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Just in Case (JIC)

A company produces a small stock of components or products and stores them as inventory. This is Just-Incase a rush order comes they have  ready supply.

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Lean Production

Lean production considers product and process design as an ongoing activity and not a one-off task. It should be viewed as a long-term strategy that focuses on continual feedback and incremental improvement.

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10 Principles of Lean Production

  1. Elimination of waste from various areas (JIT)

  2. Minimizing inventory

  3. Maximizing production flow a

  4. Kaizan

  5. Respect for workers

  6. Pulling production from customer demand

  7. Designing for rapid changeover

  8. Creating a reliable partnership with suppliers

  9. Meeting customer requirements

  10. Doing it right the first time

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Value Stream Mapping

Value stream mapping is a lean production management tool used to analyze current and future processes for the production of a product through to delivery to the consumer.

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Role of the Workforce

Training, Devolution in power relating to process improvement, Kaizen

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Lead Time

Lead time refers to the time quoted to customers (usually in days or weeks) between the date of purchase and the date of delivery.

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The 5 S’s

Sorting, Stabilizing, Shining, Standardizing, Sustaining the practice

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The 7 Wastes

Overproduction, Waiting, Transporting, Inappropriate processing, Unnecessary inventory, Unnecessary/excess motion, Defects.

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CIM

A system of manufacturing that uses computers to integrate the processing of production, business and manufacturing in order to create more efficient production lines.

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Cost-effectiveness

The most efficient way of designing and producing a product from the manufacturer’s point of view.

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Value for Money

The relationship between what something, for example a product, is worth and the cash amount spent on it

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Fixed Costs

The costs that must be paid out before production starts, for example, machinery. These costs do not change with the level of production.

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Variable Costs

Variable costs are costs that change in proportion to the goods or service that a business produces, i.e. reliant on output.

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Break-even

It is the point of balance between profit and loss. It represents the number of sales of a product required to cover the total costs (fixed and variable).

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Pricing Strategies

Price-minus, Retail price, Wholesale price, typical manufacturing price, target cost, return on investment (ROI), unit cost, sales volume, financial return