Glossary BA: Operations


Key Term



The process that uses machinery, equipment, and people to create valued goods and services from raw materials or components.


The processes used in making both tangible and intangible products.


The process used to accomplish organisational goals through planning, organising, leading, and controlling people and other organisational resources.


The activities and processes used in making tangible products; also called production.

tangible product

Any physical good having a physical existence that satisfies a want or need.

intangible product

Any physical good having no physical existence that satisfies a want or need.


The resources such as labour, money, materials, and energy that are converted into outputs.


The goods, services, and ideas that result from the conversion of inputs.


Changing the shape of the inputs in order to get the desired output.


Mixing different inputs in order to get the desired output.

final product

The desired end of a production process.


Undesired, but useful ends of a production process.


Undesired and not useful ends of a production process.


The making of identical, interchangeable components or products.


Making products to meet a particular customer's needs or wants.

modular design

The creation of an item in self-contained units, or modules, that can be combined or interchanged to create different products.

capital-intensive production

A form of production that depends heavily on equipment and machinery to produce its products.

labour-intensive production

A form of production where people are key to supplying products and services.


The ratio of goods and services provided to resources used.

operations system

The overall structure about what and how a business would manufacture products.


The maximum load that an organisational unit can carry or operate.


The place where products are manufactured.

facility layout

The physical arrangement of resources (including people) in the production process.

fixed-position layout

A layout that brings all resources required to create a product to a central location.

process layout

A layout that organises the transformation process into departments that group related processes.

product layout

A layout requiring that production be broken down into relatively simple tasks assigned to workers who are usually positioned along an assembly line.

continuous manufacturing organisation

Companies that use continuously running assembly lines, creating products with many similar characteristics.

project organisation

A company using a fixed-position layout because it is typically involved in large, complex projects such as construction or exploration.

intermittent organisation

Organisation that deals with products of a lesser magnitude than do project organisations; their products are not necessarily unique but possess a significant number of differences.


A system of integrating all the operations of different departments in a plant by means of a central computer and a network of workstation computers.


The design of components, products, and processes on computers instead of on paper.


Manufacturing that employs specialised computer systems to actually guide and control the transformation processes.


Measuring and controlling quality with the aid of electronic, interlinked devices.

flexible manufacturing

Manufacturing with highly automated machinery that can be changed quickly and can perform multiple tasks.


The science of designing and building robots.


All activities involved in obtaining and managing raw materials and component parts, managing finished products, packaging them, and getting them to customers.


The function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services.


The buying of all materials needed by the organisation; also called procurement.


All raw materials, components, completed or partially completed products, and pieces of equipment a firm uses.

raw materials inventory

The stock of raw materials available at the facility.

work-in-process inventory

The stock of parts and semi-finished products available at the facility.

finished-goods inventory

The stock of final goods available at the facility.

economic order quantity model

A model that identifies the optimum number of items to order to minimise the costs of managing (ordering, storing, and using) them.

just-in-time inventory management

A system that provides for raw materials and subassemblies to be delivered by suppliers to the location where they will be processed at the time they are needed rather than being stored in inventories.

material-requirements planning

A planning system that schedules the precise quantity of materials needed to make the product.


The sequence of operations through which the product must pass.


The assignment of required tasks that is given to departments or even specific machines, workers, or teams.

program evaluation and review technique PERT

A method for analysing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project.

Gantt chart

Bar graph showing production managers what projects are being worked on and what stage they are in at any given time.


The degree to which a good, service, or idea meets the demands and requirements of customers.

total quality management TQM

A systematic approach to addressing quality issues that involves a total, integrated, companywide commitment to quality.

statistical process control

A system in which management collects and analyses information about the production process to pinpoint quality problems in the production system.

ISO 9000

A series of quality assurance standards designed by the International Organisation for Standardisation (ISO) to ensure consistent product quality under many conditions.


Checking whether the products meet the quality standards.


Testing some randomly selected units to get information about the quality level of the total population.