IB Business Management Unit 5: Operations Management - Production Methods, Production Planning and Management Key Definitions

Artificial Intelligence (AI) AI refers to computer systems that analyze data, predict outcomes, and perform tasks traditionally requiring human intelligence.

Artificial neural networks (ANNs) are computing systems inspired by the human brain.

Batch production is a manufacturing method where a group of identical products is produced together in stages before moving on to the next batch.

Comparing your organization’s processes or performance against industry leaders or best practices, then applying the lessons learned.

Big data refers to large and complex datasets that traditional methods cannot process effectively.

Substances that naturally decompose over time without harming the environment.

A brand is a name, term, sign, symbol, or design (or a combination of these) that identifies the goods or services of a seller and differentiates them from competitors.

Brand loyalty measures the extent to which customers repeatedly choose a brand over competitors.

The level of output at which a business's total revenue exactly matches its total costs, resulting in no profit or loss.

Buffer stock is the minimum inventory level maintained to prevent stockouts during unexpected demand spikes or supply delays.

A reserve supply of materials or products kept as a precaution against unexpected shortages or supply chain disruptions.

The process of planning, monitoring, and optimizing the production capacity of a business to meet demand efficiently.

The process of determining the production capacity needed to meet current and future demand efficiently.

Capacity Utilization Rate measures how much of your production capacity is being used.

Capital productivity measures output relative to capital investment.

Cloud computing allows businesses to store, process, and access data and applications over the internet instead of installing them on a local machine.

The unique attributes or capabilities that allow a business to outperform its competitors. It enables a company to offer superior value to customers, whether through lower costs, differentiated products, superior quality, brand reputation, or innovation.

Contribution is the amount of money left after subtracting variable costs from sales revenue. It helps cover fixed costs and, once those are covered, contributes to profit.

Contribution per unit tells you how much each unit sold contributes to covering fixed costs.

Copyright protect original works of authorship, such as literature, music, art, and software.

The total expense incurred when purchasing goods or services from an external supplier.

The total expense incurred when producing goods or services internally.

A sustainable approach where products are designed for complete reuse, recycling, or composting, ensuring zero waste.

Crisis management involves an immediate response to unforeseen, high-impact events. The goal is to minimize damage and ensure continuity.