2.4- Resource Mananagement Flashcards
What is buffer stock?
The desired minimum stock level held by a firm just in case something goes wrong
What is a competitive advantage?
A feature that gives once business an edge over it’s rivals.
What is competitiveness?
The extent to which a firm can stand up to or beat rivals.
What is opportunity cost?
The cost of missing out on the next best alternative when making a decision.
What is stockholding cost?
The overheads resulting from the stock levels held by a firm
What is productivity?
The output per unit (person or machine) per hour.
What is production?
The total amount of output that is produced in a time period.
What are the 4 methods of production?
- Job
- Batch
- Flow
- Cell
What is Job production?
Where one single product is made at a time.
What are 2 advantages of using Job production?
- Unique one of builds specific to a customer.
- Very skilled motivated workers.
What are 2 disadvantages of using Job production?
- Skilled labour is expensive.
- Hard to speed up if demand increase.
What is batch production?
When a business wants to make more than one item at a time (made in batches).
What are 2 advantages of using batch production?
- Production can be changed to meet customer needs or fluctuations in demand.
- Lower skilled workforce means lower wages can be paid.
What are 2 disadvantages to using batch production?
- Workers may be less motivated with repetitive work.
- Small batches carry higher average unit costs (EOS).
What is flow production?
Uses production lines with continuous movements of items through the process (e.g cola, cars).
What are 2 advantages of using flow production?
- Can make larger quantities, can bulk buy raw materials.
- Continuous production, stocks/raw materials don’t need to be held, can use JIT system.
What are 2 disadvantages of continuous production?
- High costs to buy the factory and machinery.
- Low motivation of staff due to repetitive tasks.
What is cell production?
Dividing up production into separate self contained areas that are each responsible for a section of work.
What are 2 advantages to cell production?
- Wastage through movement of materials is reduced.
- Time waiting for stock to arrive is reduced.
What are 2 disadvantages to using cell production?
- Breakdown of machinery will stop the production.
- Needs more staff to maintain than a continuous flow,
What are the 4 ways to improve productivity?
- Productivity bonus
- Productivity deal
- Staff training
- Investment in new machinery and equipment
Economies of scale?
The cost advantages that can occur when a company increases their scale of production and becomes more efficient, resulting in a decreased cost-per-unit.
What is stock control?
Stock control is the control of the flow of stock in a business, it concerns the ordering and management of:
- Raw materials
- Components
- Work in progress
- Finished goods
What is inventory?
Inventory is another term for a businesses stock. It can mean any of these: raw materials, work-in-progress, components or even finished goods.
What are buffer stocks?
Buffer stocks are stocks which are held in case there is unforeseen rise in demand or a problem with supply.
What are 2 advantages of buffer stocks?
- Holding buffer stocks means that a business can easily respond to changes in consumer demands.
- Holding buffer stocks means that if the suppliers cannot deliver on time that production will not be affected.
What are 2 disadvantages of buffer stocks?
- The cost of storage is high, a business will need to pay for premises, staff and security of the stock.
- This can tie up the working capital of a business.
What are stock out costs?
Stock out costs are costs of not having stock when it is needed:
1. Loss of customer goodwill
2. Loss of sales revenue
3. Damage to reputation
4. Disruption to production
What is just in time delivery (JIT)?
- Means that a business does not keep stocks of parts in a warehouse.
- Instead they order the parts and get them delivered same day from the supplier.
What are the 7 forms of wastage within a business?
- Over production
- Waiting time
- Transportation time
- Excess stock
- Excess motion
- Product quality
What is Quality?
Quality is how well a product or service does what it was designed to do. Real quality is consistent.
What is quality control?
- Quality control is the traditional way of managing quality (detecting faulty output).
- Quality control may involve sampling or looking at data about the product to see if quality is consistent.
What is quality assurance?
- Quality assurance is about how a business can design the way a product or service is produced or delivered to minimise the chances that output will be sub+standard.
- Quality assurance builds quality into every stage of the production process, not left until the end.
What is Total Quality Management (TQM)?
- TQM puts quality at the heart of everything in business.
- ‘Getting it right first time every time’.
- TQM is intended to reduce wastage as well as increase the quality of the finished products.
What are 3 advantages of TQM?
- Not paying for inspectors.
- More involved workers.
- More satisfied customers (better quality).
What are 3 disadvantages of TQM?
- Takes time to introduce.
- Will cost to train staff.
- Some staff can be resistant to change.
What is a quality circle?
A quality circle is a group of employees who meet on a regular basis to talk about quality problems that are relevant to the part of the production process that they work on.
What is capacity utilisation?
Capacity utilisation is the extent to which the maximum capacity for output that is being used (usually a %).
What is the equation to find capacity utilisation?
Capacity utilisation= current output/ maximum possible output X100.
What are ways that can improve capacity utilisation?
- Could increase demand by a price cut sale or promotion.
- Could increase off peak usage at off peak times by doing time dependant promotions/deals.
- Business could sell assets.
What are 3 implications of under-utilisation?
- Higher fixed costs per unit.
- Unmotivated staff not busy.
- Impact on brand image.
What are 3 implications of over-utilisation?
- Can damage reputation of the business
- Staff may do too much overtime and so have accidents due to tiredness.
- Quality suffers as mistakes are made in production.
