DISCUSS THE PROCESS OF PRODUCTION GIVING AN EXAMPLE

0 This process involves the converting production inputs into productions. The inputs to
production includes all factors of production such as land/rm, manual and metal labor,
capital in the form of money,machine and enterprise in quality management decision
making

1 Primary ie extraction of raw materials and the raw materials may be obtain from
extraction. Secondary ie transforming raw materials into goods. Tertiary ie associated
with the provision of services

2 The process of production outlines the steps involved in converting input to output. It is
divided into three stages, input, throughput and output. Input is the raw materials or
components of production that a firm uses to convert to a finished product for example
flour. Throughput is the process raw materials go through before being converted into
finished products for example cooking. Output is the outcome of the input and
throughput. The output represents the finished goods for example bread

WHEN IS PRODUCTION COMPLETED?

3 Production is only completed when consumption takes place .

4 When is reaches the hands of the final consumer

DISTINGUISH BETWEEN PRODUCTION MANAGEMENT AND OPERATIONS MANAGEMENT

5 Production is the process of developing of manufacturing of goods and servicest hat are
used by customers/consumers while operations management refers to the
administration of business practices to create the highest efficiency possible in the
organization it concerned with how they can convert materials and labour into services
and products at the highest quality

6 Operations management refers to the creation of goods and services i.e transforming
inputs into outputs. Production management also known as productivity measures the
efficiency of a person, machinery or factory in the conversion of inputs into outputs

ONE IMPORTANT FACTOR FOR THE SUCCESS OF ANY BUSINESS IS SAID TO BE WHERE IT
LOCATES. EXPLAIN SOME QUALITATIVE AND QUANTITATIVE FACTORS THAT INFLUENCE THE
LOCATION OF A BUSINESS

7 Qualitative- infrastructure, environment and planning considerations, management

preferences

8 Quantitative- site cost, transport cost, labour cost, proximity to markets

9 Quantitative
 10 Site costs

11 Transportation costs

12 Labour costs

13 Qualitative

14 Infrastructure

15 Environmental and planning consideration

16 Management preferences

DISCUSS THE VARIOUS PRODUCTION METHODS GIVING AN EXAMPLE FOR EACH (guys this is a
huge one and exam tip!)

17 Job production- This involves the production of unique items to meet Customer wants.
This means that production is flexible and it will require a wide range of skills because of
the range of jobs that may be done. E.g. the work of a portrait artist or photographer.

18 Batch production- This occurs when items move together from one stage of a process to
another. For example making bread or wine, a batch is produced at a time.

19 Flow production- products flow from one stage of production to another. E.g. chemical
production

DEFINE FORECASTING AND EXPLAIN WHY DIFFERENT FORECASTING METHODS ARE

APPROPRIATE IN DIFFERENT SITUATIONS

20 Forecasting is a decision making tool used by many businesses to aid in budgeting,

planning and estimating future growth. It is an attempt to predict future outcomes
based on past events and management insight.

21 A forecast is a prediction of upcoming events. In a business it is an estimate of the levels

of costs, sales, stock and production. There are 5 different major forecasting techniques
and they include" 1- Sales force composite which is when the business rely on the sale
force or members of the sales team to project feature levels of demand for the firms
products and since they interact regularly with the customers they have a wealth of
knowledge which includes customer choices,trends and competitors behavior 2-Delphi
method which is a group of experts annoymous to eachother to forecast sales this is one
of the best methods used as it is the most accurate as it is relying of experts that is sent
to each other and give feedback till final production is reached 3-Consumer survey
basically a questionnaire type which is used to ascertain the level of potenital of a firms
product this is easily gathered through things like surveys and questionnaries and can
help to gain a futher reach of customers than sales force composite 4-Jury of Experts this
 technique uses the mangers of different function areas that are armed with knowledge
which can be used to predict sales the experts include areas like marketing finance
production etc 5- Moving average this involves heavy use of statistics to find out why
there is fluctuating sales and how these fluctations can be removed

DISCUSS THE THEORIES OF THE DIFFERENT FORECASTING METHODS

22 Sales force composite is qualitative and it is the future prediction of sales of a particular
product .

23 Delphi method is also qualitative . It is based on results of questionnaires sent to panel

of experts.

24 Consumer surveys helps obtaining info about future purchase plans of buyers

WHAT IS PRODUCT DESIGN STRATEGY? EXPLAIN WHAT IS THE MAIN PURPOSE OF HAVING A
PRODUCT DESIGN STRATEGY

25 A product design strategy is a factor in the organizational success of a business because

it sets the characteristics ,features and performance of the service or good .It's objective
is to create a service or good with excellent functional utility.

26 Product design strategy sets the features, characteristics and performance of a good or
service demanded by consumers. The main objective is to create a product that would
generate sales at an acceptable cost within a certain period of time.

COMPARE MINIATURIZATION TO MODULARIZATION USING AN EXAMPLE

27 Modularization is the process whereby a product is divided into subsets known as

modules which is used to assemble the final product for example a computer the
modules would be the harddrive processor graphics card etc. And miniaturization is the
development of very small products that have the same function of the larger products
they replace for example the parts in cellphones become smaller to make the phone
drastically smaller

28 Modularization is the designing of products or services in sections or components that

can be easily replaced or used in other versions of the product. Example a computer

29 Miniaturization is the development of very small products that have the same function
and use as the larger products they replaced.

DISCUSS THE VARIOUS WAYS IN WHICH PRODUCTIVITY IS IMPORTANT TO

30 1. BUSINESSES
 31 2. GOVERNMENT

32 guys these are the application type questions! please look out!

33 Productivity and business- 1)Improves competitiveness among businesses

34 2) Maintains business reputation

35 3) Increase profits

36 4) Investors would be encouraged to invest in the business

37 5) Increase in consumer satisfaction

38 Productivity and Government- 1) Government can get more revenue through taxation

39 2) There can be economic growth through exports this resulting in a surplus in the B.O.P.

40 3) As firms productivity increases they may demand more labour and this will decrease
unemployment resulting in increases in the S.O.L. And Q.O.L. of a nation.

USING ANY 2 OF THE PRODUCTION METHODS, LIST SOME ADVANTAGES AND DISADVANTAGES
OF MOVING FROM ONE METHOD TO THE OTHER

41 Batch production to Flow production

42 Advantages:

43 Lower per unit costs

44 Larger amount of goods being produced

45 Can quicker meet demands

46 Reduced need for storage as production is speedy

47 Disadvantages:

48 Higher set up costs

49 Quality may be sacrificed

50 Motivation of workers can decrease

51 Can be difficult to alter the production process

DISCUSS THE IMPORTANCE OF CAPACITY PLANNING

52 The utilization rate rises and falls with business cycles which means as production rises
capacity utilization also rises.

53 Capacity planning is important to the organization as it needs to be aware of capability

of its production facilities

WHAT IS THE FORMULA FOR CAPACITY UTILIZATION?

54 present output over total present output x 100

COMPARE CAD TO CAM. LIST THE CHARACTERISTICS OF BOTH

55 CAD (Computer Aided Design) involves the use of computer systems to create, modify
and analyse and store designs. Whereas, CAM (Computer Aided Manufacturing) uses
computer software to convert CAD data and models into instructions to be used in the
actual manufacturing of the product.

guys Topic 4- Capacity utilization is not a heavily tested topic. Please pay attention there!!

DISCUSS THE CONCEPTS OF ECONOMIES AND DISECONOMIES OF SCALE

56 Economies of scale is the reduction of costs as the business grows whole diseconomies
of scale occurs when a business becomes so large that cost per unit increases

57 Economies of scale is essentially the benefits a business experiences as it grows and

diseconomies of scale is the disadvantages a business experiences when it grows

DISCUSS THE 4 LAYOUT STRATEGIES

58 Process layout- machinery and equipment that are similar or have the same function are
grouped together in specified areas and the product being produced is transported to
the different areas

59 Product layout- organised into progressive steps for example building a car

60 Fixed position layout- product remains in one location and machinery and equipment
are carried to that location example building a house

61 Cellular layout- different cells produce different parts for a specified product

62 *Process layouts are facility configurations in which operations of a similar nature or

function are grouped together as such they are occasionally referred to as functional
layouts.
 63 *Production layouts are found in 'flow shops' which is repetitive assembly or continuous
flow flow industries. Flow shops produce high volume and highly standardised products
that require highly standardised reptitive processes.

64 * Fixed-position layout is appropriate for a product that is too large or too heavy to
move. (eg. aircrafts)

65 * Cellular layout- this is where machines are grouped according to the process
requirements for a set of similar items that require similar processing.

WHAT IS THE IMPORTANCE OF LAYOUT STRATEGIES? scarce topic as well!!

66 Is to develop a cost effective layout that will meet it's firm competitive needs .

67 A layout strategy is important so that a business can develop a cost effective layout that
will meet a firm's competitive needs

68 Layout Strategies are the way in which a company or factory is laid out to ensure the
smooth flow of work and this is important to ensure that the business has efficient use
of space and labour and reduction in bottle necks which slows down production and
enforce its competitive values.

WITHIN COST OF PRODUCTION THERE ARE SEVERAL CONCEPTS. EXPLAIN EACH

69 Direct cost ie cost related to making the product . It is traceable to the creation of the
product.

70 Indirect cost cannot be traced to the product such as utilities .

71 Variable cost are those that vary with production .

WHAT ARE THE 3 TYPES OF INVENTORY HELD BY A FIRM?

72 Raw materials, Work in process and Finished goods

DISCUSS THE CONCEPT OF MARGINAL COSTING

73 Marginal costing is a system of ascertaining costs whereby only variable costs are
considered it includes: Direct materials, direct labour, Variable production overheads
and variable selling overheads

74 Marginal costing refers to using variable costs in the determination of price. It is only
useful in the short term since in order for a business to survive they need to cover they
 variable costs first. The business will use either a profit margin or a profit mark up to
determine the selling price.

WHAT ARE SOME REASONS WHY FIRMS HOLD INVENTORY?

75 readily available when needed for production

76 -firm can respond quickly to increased demand

77 -firms can benefit from bulk purchasing

78 -for expected future surges in prices

THERE ARE CONSEQUENCES OF HOLDING TOO LITTLE AND ALSO TOO MUCH STOCK. DISCUSS
IN DETAIL

79 Large stock levels will occupt space in the warehouse and that same space could be used
for something productive. Large stock levels that are unsold may become obsolete or
may perish. Also the opportunity cost will be very high.

80 -Too little stock

81 The business may not be able to cope with unexpected ibcreases in demand if stocks are
low. Production may be stopped if deliveries are delayed which can lead to idle labour
and machinery.

EFFECTIVE INVENTORY MANAGEMENT IS VERY IMPORTANT FOR THE RUNNING OF A

BUSINESS. TO WHAT EXTENT DO YOU AGREE WITH THIS STATEMENT?

82 Inventory management is important for the running of a business as this is the practice
of overseeing and controlling of the ordering raw materials used in the production of
goods and services. Most firms will attempt to minimise the amount of stocks they hold
as a means of reducing cost. However some firms holding stock is necessary. One of the
major problems faced in inventory is the issue of holding too much stock or too little
stock

83 Effective Inventory Management is essential to the running of a business as since this is

important to how the business is able to utilize the resources ie the raw materials to be
converted into finished products and since this means that money will be tied up in
stock the proper use of inventory management is essential as it ensures that money will
be able to flow throught the busniess and there will be customer satisfaction due to the
high quality of goods and services

WHAT IS THE CONCEPT THAT DEALS WITH OPTIMUM ORDER QUANTITY? GIVE ITS FORMULA.
exam tip!!

84 Economic order quantity .

WHAT IS BUFFER STOCK AND ITS IMPORTANCE?

85 Buffer stock represent the safety stock below which a business is unwilling to allow stock
levels 2 fall.

86 This is the quantity of inventory held on hand by a company in the event of fluctuating
usage or unusual delays in lead time.

87 Essentially it's like backup stock incase initial stock runs out

PLEASE COMPLETE LABELING MAKING SURE TO INDICATE THE B.E.P. PROFITS AND LOSSES.
huge exam tip!!

ANSWER

WHAT ARE THE 2 CONCEPTS THAT ADVOCATES FOR CONTINUOUS IMPROVEMENT? guys here it
is again!!!
 88 a Japanese concept based on the notion that improvement of a product should be a
never ending process.

89 TQM - Total Quality Management is a philosophy which ensures that quality is

maintained in all areas of an organization in order to meet customers' expectations.

WHAT IS THE CONCEPT THAT DEALS WITH OPTIMUM ORDER QUANTITY? GIVE ITS FORMULA.
exam tip!!

90 Economic Order Quantity which is a formula that calculates the optimum level of stock
so it does not overstock or under stock the busniess and it is the square root of 2 (CA)
over HP

DISCUSS THE FACTORS THAT IMPACT ON PRODUCTIVITY. exam tip!!

91 Labour management relation, availability of raw materials, training

DISCUSS THE IMPACT OF POOR QUALITY ON PERFORMANCE

WHAT IS LEAN PRODUCTION?

92 Lean production is a production regime by which the business seeks to maximize its use
of resources and become as efficient as possible in producing, it involves

93 Using less materials to make the same product

94 inventory management (usually employing a JIT system)

95 Employee morale (seeking to maintain a motivat

DISTINGUISH BETWEEN QUALITY CONTROL AND QUALITY ASSURANCE

96 Quality control is an attempt to maintain standards and confidence in the product .

97 Quality assurance is working with suppliers to ensure that materials and components
meet required standard.

98 Quality control is the process of ensuring that the products meets its established quality
standards and are sold free from defects. Whereas quality assurance is a guarantee to
maintain an agreed or established set of quality standards. Unlike quality control, which
focuses on detecting defects after they have occurred, quality assurance emphasis the
necessary steps to be taken to prevent the occurrence of defects.

LIST THE VARIOUS TECHNIQUES FOR IMPROVING QUALITY. guys this one i feel is
coming....TQM....

99 Quality assurance, benchmarking, outsourcing, quality cirlces, kaizen, tqm, ISO quality
standards

CRITICAL PATH ANALYSIS QUESTION