2.3 Flashcards
2.3 - Procurement and legislation
Procurement - the process of sourcing and buying stock.
Legislation - The organisation/management of the transport of stock.
2.3: A good supplier
- Flexibility with deliveries and payment
- Reliable
- Large discount for large orders (economies of scale)
- High quality goods
- Good prices
- Short lead times (available quickly)
2.3: Why is good supplier good?
- Late deliveries can hold up customers.
- If not reliable, might not get delivery.
- Supplier can influence the branding of business.
- Flexibility can help businesses to meet customer requirements.
2.3: Good quality definition
A product or service which meets the standards set by customers
2.3: Benefits of good quality
- can charge premium prices
- strengthens brand
- can give a USP/ competitive advantage
2.3: How might a business know if quality is lacking?
- Number of complaints from a customer.
- Product refunds or return
- Loyalty of customers
- mystery shoppers
- customer surveys
2.3: Quality control vs quality assurance
Quality control - the product would be tested at the end.
if the product doesn’t meet standards its made again or thrown away.
Quality assurance - tested at each stage of the process
2.3: Advantages and disadvantages of quality control
ADVANTAGES:
- less low quality to products
- cheaper
- less discipline
DISADVANTAGES:
- Too late to correct errors
- products have to be destroyed.
- wastes money.
2.3: Advantages and disadvantages of quality assurance
ADVANTAGES:
- Leads to zero defects
- customers
- focus on process
- target at the whole organisation
- aims for loyal repeat customer
- less wastage
- quality built into the product.
DISADVANTAGES:
- costs more
- takes time
- training
- employ more staff.
2.3: meaning of production
Production is the process of changing inputs such as raw materials and labour into food and services that can be sold.
2.3: Job production
The method of production where one-off specialised products are made (individually) for each customer.
Staff have to know how to do everything.
For example; hair dressers, tailors, architect, wedding dresses.
2.3: Job production Advantages and disadvantages
ADVANTAGES:
- products of high quality
- meet individual needs of customers
- higher prices may be charged as customers are willing to pay more for specifically designed products.
DISADVANTAGES:
- high cost of production
- high labour cost (requires skilled labour).
2.3: Batch production meaning
Mixture of flow and job production
similar products
like paint or cupcakes
2.3: Batch production advantages and disadvantages
ADVANTAGES:
- Meet customer needs
- Machinery used to lower labour cost.
DISADVANTAGES
- Less scope for customising products
- Takes time to switch between machinery, set up takes time.
2.3: Flow production/ mass production meaning
Making lots of things continuously
identical
2.3: Flow production/ mass production advantages or disadvantages
ADVANTAGES
- Cost of product is lowered
- use of machinery leads to very consistent, high standards of quality.
DISADVANTAGES
- Accidents are costly
- Basic product cant be changed easily.
- Worker motivation is low
2.3 - types of stock
Raw materials to make goods
finished goods to sell
2.3- problems with low stock
difficult to meet customer demand
loss of repeat purchases
ordering stock means you have to wait for it to be delivered
loss of business, customers buy from elsewhere
2.3 - problems of high stock
stock can be wasted or perished
high cost to store the stock
can go out of date
extra stock is a cost to the business if sales are low and not used.
2.3 - just in time`
+ cash not tied up in stock (improved cash flow)
+ stock will be fresh (especially for businesses that sell perishable goods)
- unforeseen circumstance can cause late deliveries
- Initial teething problems may drive away customers.
2.3 - just in case
+ never run out of stock
+ can meet surges in demand
+ benefit from economies of scale ( discount of bulk buying)
- Ties up cash which could be used elsewhere.
- Higher storage costs
- stock can perish
2.3 - buffer stock, re order level, lead time
buffer stock- the minimum stock level that is kept
re order level - when stock is re-ordered
lead time- the time it takes for stock to come
2.3: STEPS OF THE SALE PROCESS
- customer interest
- speed and efficiency of service.
- customer engagement
- response to customer feedback.
- post-sales service.
