9609 · 9.3.1
Operational decisions flashcards
Revision flashcards for Cambridge 9609 Operational decisions (syllabus 9.3.1). Flip, recall, then mark a real past-paper question.
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Capacity scheduling?
Matching production to demand — shifts, temps, overtime.
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Subcontract peak demand?
Use external capacity without permanent fixed cost increase.
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Outsource decision?
Cost, quality, control, strategic importance (4.3.2).
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Stock decision trade-off?
Holding cost vs stock-out cost (4.2.1).
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Preventive maintenance?
Scheduled servicing to avoid costly unplanned downtime.
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Breakdown cost?
Lost output, rush repairs, missed customer deadlines.
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Link to utilisation?
4.3.1 — schedule to improve capacity use.
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Short-term vs strategic?
Ops decisions tactical; location/ERP more strategic.
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What is the formula for Capacity Utilisation?
(Current output level / Maximum possible output level) x 100. It measures the percentage of total capacity that is being used.
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Define 'Outsourcing' in a business context.
The business practice of contracting out non-core business activities or functions to third-party providers, rather than performing them in-house.
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What is 'Buffer Inventory'?
A quantity of inventory held in reserve to protect against unforeseen shortages or surges in demand. It helps to prevent stock-outs caused by delays in supply or unexpected customer orders.
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Explain 'Preventative Maintenance'.
A proactive maintenance strategy involving regular, scheduled servicing and inspection of equipment to detect and correct potential failures before they occur, minimising unexpected downtime.
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What is 'Lead Time' in inventory management?
The time that elapses between a new order for inventory being placed and the goods being delivered and ready for use.