2.4 - Resource Manangement

Question 1

When is a product good quality

Answer 1

When it meets the needs and expectations of the customer

Question 2

If a business can develop a reputation for high quality..

Answer 2

Then it may be able to create an advantage over its competitors. It can help a business to differentiate its products from the competition.

Question 3

Examples of poor quality: (3)

Answer 3

• Product fails
• Product doesn’t perform as promised
• product is delivered late

Question 4

Poor quality means :

Answer 4

Loss of customer loyalty, damaged business reputation, competitors take advantage, financial costs

Question 5

Quality Control:

Answer 5

The process of inspecting products to ensure that they meet the required quality standards. This is usually done before entering production, during and after the process. It is done usually by checking every product, or every 50th for example.

Question 6

How is quality control achieved ?

Answer 6

Sampling and checking via inspection.

Question 7

Problems with quality inspection :

Answer 7

Costly, often at the end of the production process so too late.

Question 8

Quality assurance :

Answer 8

The process that ensures production quality meets the requirements of customers. It is where detailed systems are in place at every stage of production.

Question 9

Total quality management

Answer 9

A management style committed to a focus on continuous improvement of the products/services with the involvement of the entire workforce. It is ensured by workers not inspectors.

Question 10

Quality circles -

Answer 10

Group of employees who meet regularly to identify problems and recommending adjustments to the working process.

Question 11

Zero defects -

Answer 11

The aim is to produce goods and services with no faults or problems

Question 12

What is kaizen?

Answer 12

This means continuous improvement. It encourages employees to engage fully with finding ways to improve quality processes

Question 13

4 types of production

Answer 13

Job
Batch
Flow
Cell

Question 14

Job production

Answer 14

One off small number of items produced, normally made to meet customers specifications, often undertaken by small, specialised businesses, high quality.

Question 15

Batch production

Answer 15

Producing a set number of identical items, it often offers customer standard products with some options. It is more efficient than job production which keeps costs down

Question 16

Flow production

Answer 16

Products move continuously through a production process, when one task is finished the next must start immediately. It is associated with making high volumes of the same product.

Question 17

Cell production

Answer 17

This means setting up a small production line or group working process so that items can be produced quite flexibly

Question 18

What does productivity measure

Answer 18

The relationship between inputs into the production process and the resultant output.

Question 19

Productivity =

Answer 19

Output ➗ input (per time period)

Question 20

Factors influencing productivity

Answer 20

Level of investment in equipment, the ability level of those at work, improved employee motivation

Question 21

Unit costs =

Answer 21

Total production costs ➗ total output (units)

Question 22

Economies of scale is

Answer 22

Where unit costs fall as output rises

Question 23

Labour intensive

Answer 23

Production relies on using labour resources, labour costs form a high percentage of total costs

Question 24

Capital intensive

Answer 24

Production relies on using capital resources, machinery costs form a high percentage of total costs

Question 25

Capacity utilisation =

Answer 25

Actual level of output ➗maximum level of output X 100%

Question 26

Higher utilisation reduces

Answer 26

Unit costs

Question 27

Dangers of operating at a low capacity utilisation

Answer 27

Higher unit costs, less likely to reach break even output , capital tied up in under utilised assets

Question 28

Dangers of operating at a high capacity utilisation

Answer 28

A possible negative effect on quality, employees suffer, loss of sales ( less able to meet unexpected demand , equipment may need repairing )

Question 29

What is stock

Answer 29

Represents the raw materials, work in progress and finished goods held by a firm to enable production and meet customer demand

Question 30

Influences on the amount of stock held

Answer 30

Need to satisfy demand, need to manage working capital, risk of stock losing value.

Question 31

What are the costs of holding stock

Answer 31

Cost of storage, interest costs, obsolescence risk ( unable to sell), stock out costs ( no stock)

Question 32

What is the maximum stock level

Answer 32

Max level of stock a business can/wants to hold

Question 33

Re order level

Answer 33

Acts as a trigger point, when stock falls to this level, the next supplier order should be placed

Question 34

Lead time

Answer 34

The amount of time between placing the order and receiving the stock

Question 35

Minimum stock level

Answer 35

Minimum amount of products the business would want to hold in stock

Question 36

Buffer stock

Answer 36

An amount of stock held as a contingency in case of unexpected demand or delays from supplier

Question 37

Just in time stock

Answer 37

Where the stock required for production arrives just as it is needed

Question 38

Lean production -

Answer 38

Aims to produce more using less, by eliminating all forms of waste