Operations Glossary

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Operational objectives
targets set in relation to the production process or provision of a service within a given financial year
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Quality, cost and volume targets
operational objectives which set a minimum acceptable standard of provision measured by quality, cost or volume
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Efficiency targets
operational objectives which set a minimum acceptable standard of provision in relation to the environment
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Benchmarking
a management tool which aims to increase performance by identifying, investigating and adopting aspects of best practice from other firms
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Economies of Scale
the benefits enjoyed by a firm as a result of operating on a large scale, leading to a fall in average costs
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Diseconomies of Scale
the disadvantages experienced by a firm as a result of operating beyond optimum output, leading to a rise in average costs
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Purchasing economies
benefit of buying on a large scale leading to lower average costs from suppliers
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Technical economies
ability of larger firms to buy technically advanced equipment and spread the cost over a larger number of units
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Specialisation
the ability to employ specialist, eg. accountants, and for staff to focus on one particular area or function
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Average cost
total cost/number of units produced
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Communication diseconomy
the breakdown in effective communication resulting from an increase in size of operations
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Resource mix
the combination of capital and human resources utilised within a business to achieve the required output
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Optimum resource mix
the combination of capital and human resources which allows for the greatest efficiency
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Capital intensive
businesses that rely more heavily upon capital equipment, eg. machinery and computers rather than labour
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Labour intensive
businesses that rely more heavily upon labour, eg. the workforce rather than capital equipment
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Research and Development
the scientific research and technological development of a new product or service
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Idea generation
the process of identifying a wide range of possible new ideas
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Concept testing
the process of pitching potential ideas to consumer panels to assess their reactions
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Idea screening
the process of steamlining all the ideas generated to a shortlist those worthy of further consideration
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Business analysis
the process of investigating the economic and practical viability of an idea
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Innovation
the launch of a new product or process, and invention, onto the market for commercial gain
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Optimal location
a business location that gives the best combination of quantitative and qualitative factors
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Quantitative factors
these are measurable in financial terms and will have a direct impact on either the costs of a site or the revenues from it and its profitability
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Qualitative factors
non-measurable factors that may influence business decisions
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Stakeholder
any person or group that has an interest in the activities of a business, eg. community, workers, suppliers
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Multisite locations
a business that operates from more than one location
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Off-shoring
the relocating of a business process done in one country to the same or another company in another country
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Multinational
a business with operations or production bases in more than one country
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Trade barriers
taxes (tariffs) or other limitations on the free international movement of good and services
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Lean production
the adopting of techniques that help to reduce waste
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Just-in-time
a lean production technique which aims to minimise stock holdings
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Kaizen
a lean production technique which aims to improve efficiency by making small but frequent improvements, also known as continual improvememt
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Time-based management
managing resources effectively to ensure products are fit for market in the shortest time possible
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Critical path analysis
a technique for planning complex projects to allow them to be completed int eh shortest amount of time possible by identifying activities that can be carried out simultaneously
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Critical path network
a visual representation of the sequencing and timing of all the activities involved in completing a complex project
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Earliest start time
the earliest time an activity must be completed to avoid any delay to the project
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Latest finish time
the latest time an activity must be completed by to avoid any delay to the project
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Critical path
the route which outlines all those activites with zero float time, eg. it if takes 4 weeks to complete; there is only 4 weeks between EST and LFT
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Float time
the amount of time by which a non-critical activity could be delayed without having an effect on the whole project
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Non-critical activities
those activities with float time, eg. it takes 4 weeks to complete, there may be 6 weeks between EST and LFT
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operational objectives which set a minimum acceptable standard of provision measured by quality, cost or volume

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Quality, cost and volume targets

Card 3

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operational objectives which set a minimum acceptable standard of provision in relation to the environment

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Card 4

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a management tool which aims to increase performance by identifying, investigating and adopting aspects of best practice from other firms

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Card 5

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the benefits enjoyed by a firm as a result of operating on a large scale, leading to a fall in average costs

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