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Business studies operation management
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- 1Economies of Scale-is the reduction in average cost as a result of cost of operations
- 2Cost Classification-Fixed cost - cost that do not change with output. e.g factory rent or salary of manager
-Variable cost - cost that change in direct proportion to output. e.g raw material
Total cost - all Fixed and Variable cost of producing total output. - 3Types of Economies of Scale-Financial
-Managerial
-Purchasing
-Marketing
-Technical - 4Diseconomies of Scale-factors that cause average cost to rise as scale of operation increases
- 5Main causes of DOS-Poor control
-Poor communication
-Demotivation of workers - 6Break-even chart-is the level of output where revenue equals total cost; the business is making neither profit nor loss
- 7Uses of Break-even chart-calculate how many units it needs before it starts to make profit
-calculate the effect on profit of increasing or decreasing the price of a product
-calculate the effects on profits of an increase or decrease on business costs - 8Benefits of Break-even chart-can show the effect of a decision to change costs or revenues
-easy to construct
-can help other important decision such as the location or relocation of a business - 9Limitations of Break-even chart-it is not easy to separate fixed into cost and variable
-assumes that all costs and revenues can be represented in a straight line
-assumes that all output is sold - do not allow for inventories and cost of holding these - 10Methods of Production-Job Production
-Batch Production
Flow Production - 11Quantitative factors for choosing a business location-Cost of site
-availability and cost of labour
-transport costs
-market potential
-issues - 12Qualitative factors for choosing a business location-site of site
-legal controls
-infrastructure
-ethical - 13why businesses locate their operations to another country-to achieve growth
-to reduce production cost
-to locate production closer to the market - 14Benefits of international location decisions-lower labour costs
-access to global market
-to avoid legal barriers and import tarrifs
-government incentives - 15Limitations of international location decisions-Ethical concerns
-cultural differences
-communication problems
-quality issues - 16Quality-is ensuring a good or service that meets the need and requirement of its consumer
- 17Quality Standard-is the minimum acceptance standard of production or service acceptable to consumers
- 18Importance of quality to a business-Helps develop a strong brand image
-Reduces customer complaints and returns
-keeps customers and attracts new customers
-charge a premium price
-reduce costs
-encourage wholesailers and resailers to stock its product - 19Quality Control-is checking the quality of goods through inspection
- 20Problems of Quality Control-the work can be repetitive and boring this may demotivate the inspector, resulting in them not performing their task efficiently
-the uses of quality inspectors take any responsibility of quality away from the workers
-if inspection only takes place at the end of the process, then problems in quality that occur at the beginning are not found soon enough. resources are wasted completing a product that should have been rejected earlier in the production process - 21Quality Assurance-a system of setting agreed standards for every stage of production
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- Fichas sobre Business studies operation management , creado por Catherine Tem el 23/09/2017.
- Creado por
- Catherine Tem · sep 2017
- Actualizado
- 12 oct 2017
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