Operational Targets and Production Processes in Business Studies

These flashcards cover key concepts related to operational targets and production processes in business studies, based on the provided lecture notes.

What are the key types of operational targets in business?

Cost and volume, quality, efficiency and flexibility, environmental.

What is the formula for calculating unit costs?

Unit costs = Total costs / total units.

How can a business create a competitive advantage through quality?

By developing a reputation for high quality to attract more customers.

What is meant by capacity in a business context?

The maximum output that a business can produce in a given period with the available resources.

What does capacity utilization measure?

The percentage of total capacity that is being achieved in a given period.

What are the effects of under-utilization of capacity?

Represents a waste of resources and can lead to unnecessary spending on fixed assets.

What is lean production?

A concept aiming to minimize any resource that does not add value to the product or service.

What are the benefits of just-in-time (JIT) production?

Lower stock holding costs, less working capital tied up in stock, and reduced wastage.

What is Total Quality Management (TQM)?

A management approach in which all employees are responsible for quality improvement.

What is a benchmark in business?

A standard against which other things can be compared or assessed.

What are internal economies of scale?

Cost advantages that a business experiences as it increases output.

What is the importance of effective suppliers?

Price, quality, reliability, communication, financial security, and capacity.

What does mass customization refer to?

Producing goods and services tailored to suit the needs of customers in a mass market.

What are the seven types of waste identified in lean production?

Defects, inventories, unnecessary transport, overproduction, unnecessary processing, unnecessary motion, and waiting.

Why does labour productivity matter in a business?

Labour costs are usually significant, and effective labor utilization affects efficiency and profitability.