Operations and production management
What the exam tests
You must explain how operations transform inputs into outputs, compare production methods, manage capacity, inventory and quality, and calculate simple productivity.
Core rules
- Operations is the transformation process: inputs (materials, labour, energy, information) become outputs (goods or services) with feedback and control.
- Production methods: job production makes one unique item at a time; batch production makes groups of identical items; mass/flow production makes large volumes on a continuous line; project production handles unique, large-scale, time-bound work such as construction.
- Inventory includes raw materials, work in progress and finished goods. Too much ties up cash; too little risks stock-outs. JIT aims to receive materials just as needed, but it depends on reliable suppliers and is not zero inventory.
- Quality: quality control inspects output; quality assurance builds quality into the process; TQM involves everyone and continuous improvement.
- Productivity = output ÷ input. It measures efficiency, not the absolute level of production.
- Location and layout affect transport, labour, cost and flow. A poor layout causes bottlenecks and wasted movement.
Worked example
A bakery makes standard loaves and a luxury celebration cake range. It uses one oven and eight workers. In an eight-hour shift it produces 480 standard loaves. Calculate labour productivity and recommend a method. Reasoning: total labour hours = 8 × 8 = 64. Productivity = 480 ÷ 64 = 7.5 loaves per labour hour, or 60 loaves per worker. Standard loaves suit mass/batch production because demand is repeatable and volume matters. Celebration cakes suit job production because each order is customised. Using one method for both would either over-standardise cakes or make loaves too costly. The bakery should separate flows and schedule cake work outside peak loaf runs.
Traps that cost marks
- Saying JIT means holding no stock at all.
- Confusing quality control (inspection) with quality assurance (process design).
- Treating productivity as total output; it is output relative to input.
- Assuming mass production always lowers unit cost without considering inflexibility and setup.
- Ignoring service operations; they also involve transformation and quality.