Operations management and production
Domain overview
Operations management and production focuses on transforming inputs into goods and services efficiently and reliably. The exam tests production methods, quality, capacity, inventory and productivity, usually through a small business or Namibian producer facing cost and distance constraints.
Core rules and concepts
- Job production makes one-off tailored items; batch production makes groups of identical items; mass or flow production makes high volumes of standardised output. Choice depends on volume, variety, customisation and capital.
- Productivity = output ÷ input. Capacity utilisation = actual output ÷ maximum output × 100. Higher utilisation spreads fixed costs but risks strain and poor quality.
- Quality control inspects finished output; quality assurance builds quality into every stage; TQM involves all staff and continuous improvement.
- Inventory management balances holding, ordering and stock-out costs. JIT reduces stock but is vulnerable to unreliable suppliers and transport delays.
- Lean production removes waste. Economies of scale lower unit cost as output rises; diseconomies arise from coordination problems.
Worked example
A furniture maker receives orders for hotel suites and custom boardroom tables. Standard hotel units suit batch production because components repeat; unique tables suit job production. Last month output was 1,200 chairs from 600 labour hours, so productivity was 2 chairs per labour hour. If maximum capacity was 1,500 chairs, utilisation was 80%. Before buying more machinery, the owner should check whether demand is stable and whether bottlenecks or defects limit output. The method and capacity decision must follow order variety, not a preference for "modern" machinery.
Traps that cost marks
Do not confuse productivity with production volume; producing more with proportionally more input may not raise productivity. Quality control is not quality assurance. JIT is not simply "no stock": it needs reliable supply. Capacity utilisation cannot exceed 100% in the formula unless overtime or overloading is being discussed. Always state the unit of input or output.