IB Business Management (Entire Syllabus) Questions and Answers ( Certified solutions)

IB Business Management (Entire Syllabus) Questions and Answers ( Certified solutions) Capital intensive - ANS- Production processes that use a high ratio of capital to labor inputs Labour intensive - ANS- Production processes involving a high level on labour input compared with capital equipment Ecological sustainability - ANS- Occurs when the capacity of the natural environment meets the needs of the present population without endangering the ability of future generations to meet their needs. Economic sustainability - ANS- Occurs when business development meets the needs of the present population without endangering the ability of future generations to meet their needs. Social sustainability - ANS- Occurs when social interactions and structures necessary for social development meets the needs of the present population without endangering the ability of future generations to meet their needs. Operations management - ANS- A specialised area in management that converts or transforms resources (including human resources) into goods and services. Production process - ANS- The method of of turning inputs into outputs by adding value in a cost-effective way. Sustainability - ANS- Being able to meet the needs of the present without compromising the ability of future generations to meet their own needs. Promotes inter-generational equity. Value added - ANS- Is the difference between a product's price and the total cost of the inputs that went into making it. It is the extra worth created in the production process. Lean Production - ANS- process of streamlining operations and processes to reduce waste (e.g. materials/resources, time, energy, human effort) that leads to improved quality and reduced costs Follows the principles: - waste minimisation = remove processes that don't add value - 'right first time' = zero defects - flexibility - continuous improvement - supply chain management = develops good working relationships Methods of Lean Production - ANS- 1. Kaizen (Continuous Improvement) 2. Just in Time (JIT) 3. Kanban (variation of JIT) 4. Andon 5. Cradle-to-Cradle Manufacturing and Design 6. Quality Control 7. Quality Assurance 8. Total Quality Management 9. Quality Circles 10. Benchmarking 11. National and International Quality Standards Kaizen/Continuous Improvement - ANS- - Productivity/efficiency gain from small and continuous improvements - involves forming small groups (kaizen groups) = identifies changes and improvements to establish steady flow of small improvements - small change = easier to manage and less resistance - continuous improvements in quality and eliminates waste - different from quality circles since suggestions can come from anyone Just-in-Time (JIT) - ANS- An inventory-management approach based on stocks being delivered as and when they're needed for the production process - buffer stocks = not required - finished goods = delivered as soon as they're produced Advantages of Just-in-Time - ANS- - Reduces cost of holding stock - Working capital may be used elsewhere - Businesses become more responsive to customer needs - Motivation: improves motivation by promoting employee participation - Reduces wastage - Improves relationship with suppliers Disadvantages of Just-in-Time - ANS- - Reliance on external suppliers - No room for error - Less economies of scale - Inflexible: cannot cope with fluctiations in demand - Expensive: Admin and transaction costs will increase due to frequent ordering - Quality Control can be an issue - Relies on sophisticated technology - Requires committment of workers Kanban (variation of JIT) - RATE OF DEMAND CONTROLS RATE OF PRODUCTION - ANS- - scheduling system that aligns inventory levels with consumption (RATE OF DEMAND CONTROLS RATE OF PRODUCTION) - uses kanban cards which signals the need to restock products/inventory when used Advantages of Kanban - ANS- - reduces wastage - flexibility in production - problems in production are evident by checking the kanban - improves flow Disadvantages of Kanban - ANS- - No room for error * no buffer stocks = quality problems/defects are harder to defeat - large cariations in demand can cause problems - ineffective when there's no variation in products