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troublesome terms

Operations

Each of the following terms in operations (resource) management causes problems for students in exams. You may think you know capacity utilisation and quality control. But do you know them well enough to impress an examiner?

Producing a limited number of identical items, e.g. 20 size 8 red skirts. Once one batch is finished, production moves on to the next (size 10 skirts?) Batch production is far less automated than flow production, but less labour-intensive than job production. Often, batch production requires human skill supplemented by some mechanisation.

The minimum level of stock a business desires to hold at all times. It provides the buffer zone between regular stock usage and deliveries, and the threat of running out of stock altogether. A business sets a high buffer level for production components that are essential but inexpensive, and may set a zero buffer level if the business wants to move to just-in-time production.

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