Topics covered in this UNIT - Operations Mangement

4.1 Production of goods and services

4.1.1 The meaning of production:

• Managing resources effectively to produce goods and services
• Difference between production and productivity
• Benefits of increasing efficiency and how to increase it, e.g. increasing productivity by automation and technology, improved labour skills
• Why businesses hold inventories (stocks)
• Concept of lean production; how to achieve it, e.g. just-in-time inventory control and Kaizen; benefits of lean production

4.1.2 The main methods of production:

• Features, benefits and limitations of job, batch and flow production
• Recommend and justify an appropriate production method for a given situation

4.1.3 How technology has changed production methods, e.g. using computers in manufacturing and design

4.2 Costs, scale of production and break-even analysis

4.2.1 Identify and classify costs:

• Classifying costs – fixed, variable, average, total; use examples to illustrate these
• Use cost data to help make simple cost-based decisions, e.g. to stop production or continue

4.2.2 Economies and diseconomies of scale:

• The concepts of economies and diseconomies of scale; examples of both

4.2.3 Explain, interpret and use a simple break-even chart:

• The concept of break even
• Construct, complete or amend a simple break-even chart
• Interpret a given chart and use it to analyse a situation
• Use a chart to help make simple decisions, e.g. impact of higher price
• Understand the limitations of break-even charts

4.3 Achieving quality production

4.3.1 Why quality is important and how quality production might be achieved:

• What quality means; why it is important for all businesses
• Concept of quality control and how businesses implement quality control
• The concept of quality assurance

4.4 Location decisions

4.4.1 The main factors influencing the location and relocation decisions of a business:

• Factors relevant to the location decision of manufacturing businesses and service businesses
• Factors that a business could consider when deciding which country to locate operations in
• The role of legal controls on location decisions
• Recommend and justify an appropriate location for a business in given circumstances