Operational Strategies Key Terms

Key terms and definitions for the operational strategies topic.

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  • Created by: Milan
  • Created on: 06-01-13 11:57

Operational Strategies Key Terms

Operational aims: the broad, general goals of the operations management function within an organisation.

Operational objectives: the specific, focused targets of the operations management function within an organisation.

Operational strategies: the medium to long-term plans designed to achieve the firm's operations management objectives.

Operational tactics: short-term operations management measures adopted to meet the needs of a short-term threat or opportunity. 

Economies of scale: the advantages that an organisation gains due to an increase in size. These cause an decrease in the average cost per unit of production.

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Operational Strategies Key Terms

Diseconomies of scale: the disadvantages that an organisation experiences due to an increase in size. These cause an increase in the average cost per unit of production.

Capital- intensive production: methods of production that use a high levels of capital equipment in comparison to human capital, such as labour.

Labour- intensive production: methods of production that use high levels of labour in comparison to capital equipment.

Research and development (R&D): the process of using scientific methods to discover new products and manufacturing processes.

Assisted Areas: parts of the UK that have relatively low levels of economic activity and high persistent unemployment.

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Operational Strategies Key Terms

Industrial inertia: where firms remain whey they are currently situated, even though the original reasons for location no longer apply.

External economies of scale: the advantages that an organisation gains as a result of the concentration of an industry in one location.

External diseconomies of scale: the disadvantages that an organisation experiences due to the concentration of an industry in one location.

Multi-site locations: where a business chooses to operate from a number of different sites, as opposed to a single-site location.

Offshoring: where companies outsource business activities overseas primarily due to cheaper labour and facility costs there. 

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Operational Strategies Key Terms

Outsourcing: where companies  exploit an external person or organisation to carry out part  of their work process.

Time-based management: an approach that recognises the value of time and seeks to reduce the level of 'unproductive' time within an organisation.

Network analysis: a method of planning business operations in order to identify the most efficient way of completing an integrated task or project.

CPA: the process of planning the sequence of activities in a project in order to discover the most efficient and quickest way of completing it.

Critical path: the sequence of activities in a project that must be completed within a designated time in order to prevent any delay in overall completion of the project.

Critical activity: any activity on the critical path.

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Operational Strategies Key Terms

Float time: the amount of time that non-critical activities within a project can be delayed without affecting the deadline for completion of the project as a whole.

Total float for an activity: the number of days that an activity can be delayed without delaying the project. (Total float for an activity = LFT - EST - duration of the activity)

Lean production: production based on the range of waste-saving measures.

Just-in-time: a measure that organises operations so that items of inventories arrive just at the time they are needed for production or sale.

Kaizen: a policy of implementing small changes in order to achieve better quality and/or greater efficiency. 

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