3.4 decision making to improve operational performance

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  • Created on: 31-12-18 12:33
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  • 3.4 Decision-making to improve operational performance
    • Capacity - the capacity of a business is a measure of how much output it can achieve in a given period (per day/week/ month/ year)
    • Capacity utilisation - the percentage of a business' capacity that is actually being used over a specific period
    • Labour turnover - the amount of people leaving the business at the end of a year
    • Lean production - is a systematic method for waste minimisation within a manufacturing system without sacrificing productivity, which can cause problems
    • Efficiency - the ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result
    • Methods of production:
      • JIT - just in time, to produce what is needed only wen it is needed
      • JIC - just in case, the inventory management strategy that companies use when they store a large amount of inventory because they are likely to run out of stock.
      • Cell production - is a form of team working and helps ensure worker commitment, as each cell is responsible for a complete unit of work
      • Simultaneous engineering - Concurrent new product development through employing cross-functional teams to reduce cycle time.
      • Time based management - is an aspect of lean production. It is a general approach that recognises the importance of time and seeks to reduce the level of wasted time in the production processes of a business
    • Labour productivity - this measures the output per employee and is a measure of how productive the workforce is
    • Unit costs - expenditure incurred in producing one unit of a good or service, computed usually as average cost
    • Kaizen - continuous improvement, for example by making marginal improvements in efficiency
    • Quality control - a system of maintaining standards in manufactured products by testing a sample of the output against the specification at the end of the production process
    • Quality assurance/ total quality management (TQM) - the maintenance of a desired level of quality in a service or product, especially by means of attention to every stage of the process of delivery or production
    • Quality - a product is of good quality if it meets the needs and expectations of the customer
    • Inventory - refers to the supplies and stock held by a business
    • Supply chain - refers to the network of providers involved in the process of getting the product to the customer


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