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A-Level Business > 2.4- Resource Mananagement > Flashcards

2.4- Resource Mananagement Flashcards

1
Q

What is buffer stock?

A

The desired minimum stock level held by a firm just in case something goes wrong

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2
Q

What is a competitive advantage?

A

A feature that gives once business an edge over it’s rivals.

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3
Q

What is competitiveness?

A

The extent to which a firm can stand up to or beat rivals.

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4
Q

What is opportunity cost?

A

The cost of missing out on the next best alternative when making a decision.

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5
Q

What is stockholding cost?

A

The overheads resulting from the stock levels held by a firm

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6
Q

What is productivity?

A

The output per unit (person or machine) per hour.

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7
Q

What is production?

A

The total amount of output that is produced in a time period.

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8
Q

What are the 4 methods of production?

A
  • Job
  • Batch
  • Flow
  • Cell
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9
Q

What is Job production?

A

Where one single product is made at a time.

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10
Q

What are 2 advantages of using Job production?

A
  • Unique one of builds specific to a customer.
  • Very skilled motivated workers.
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11
Q

What are 2 disadvantages of using Job production?

A
  • Skilled labour is expensive.
  • Hard to speed up if demand increase.
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12
Q

What is batch production?

A

When a business wants to make more than one item at a time (made in batches).

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13
Q

What are 2 advantages of using batch production?

A
  • Production can be changed to meet customer needs or fluctuations in demand.
  • Lower skilled workforce means lower wages can be paid.
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14
Q

What are 2 disadvantages to using batch production?

A
  • Workers may be less motivated with repetitive work.
  • Small batches carry higher average unit costs (EOS).
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15
Q

What is flow production?

A

Uses production lines with continuous movements of items through the process (e.g cola, cars).

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16
Q

What are 2 advantages of using flow production?

A
  • Can make larger quantities, can bulk buy raw materials.
  • Continuous production, stocks/raw materials don’t need to be held, can use JIT system.
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17
Q

What are 2 disadvantages of continuous production?

A
  • High costs to buy the factory and machinery.
  • Low motivation of staff due to repetitive tasks.
18
Q

What is cell production?

A

Dividing up production into separate self contained areas that are each responsible for a section of work.

19
Q

What are 2 advantages to cell production?

A
  • Wastage through movement of materials is reduced.
  • Time waiting for stock to arrive is reduced.
20
Q

What are 2 disadvantages to using cell production?

A
  • Breakdown of machinery will stop the production.
  • Needs more staff to maintain than a continuous flow,
21
Q

What are the 4 ways to improve productivity?

A
  • Productivity bonus
  • Productivity deal
  • Staff training
  • Investment in new machinery and equipment
22
Q

Economies of scale?

A

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.

23
Q

What is stock control?

A

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

24
Q

What is inventory?

A

Inventory is another term for a businesses stock. It can mean any of these: raw materials, work-in-progress, components or even finished goods.

25
Q

What are buffer stocks?

A

Buffer stocks are stocks which are held in case there is unforeseen rise in demand or a problem with supply.

26
Q

What are 2 advantages of buffer stocks?

A
  • 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.
27
Q

What are 2 disadvantages of buffer stocks?

A
  • 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.
28
Q

What are stock out costs?

A

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

29
Q

What is just in time delivery (JIT)?

A
  • 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.
30
Q

What are the 7 forms of wastage within a business?

A
  1. Over production
  2. Waiting time
  3. Transportation time
  4. Excess stock
  5. Excess motion
  6. Product quality
31
Q

What is Quality?

A

Quality is how well a product or service does what it was designed to do. Real quality is consistent.

32
Q

What is quality control?

A
  • 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.
33
Q

What is quality assurance?

A
  • 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.
34
Q

What is Total Quality Management (TQM)?

A
  • 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.
35
Q

What are 3 advantages of TQM?

A
  • Not paying for inspectors.
  • More involved workers.
  • More satisfied customers (better quality).
36
Q

What are 3 disadvantages of TQM?

A
  • Takes time to introduce.
  • Will cost to train staff.
  • Some staff can be resistant to change.
37
Q

What is a quality circle?

A

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.

38
Q

What is capacity utilisation?

A

Capacity utilisation is the extent to which the maximum capacity for output that is being used (usually a %).

39
Q

What is the equation to find capacity utilisation?

A

Capacity utilisation= current output/ maximum possible output X100.

40
Q

What are ways that can improve capacity utilisation?

A
  • 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.
41
Q

What are 3 implications of under-utilisation?

A
  • Higher fixed costs per unit.
  • Unmotivated staff not busy.
  • Impact on brand image.
42
Q

What are 3 implications of over-utilisation?

A
  • 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.

A-Level Business (11 decks)

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