3.3 Business Operations Flashcards
1 what is flow production
where a product moves continuously from one stage of production to another
1 what is production
the process of changing inputs like raw materials or labour into a finished good or service that can be sold
1 what are inputs
land
capital
enterprise
labour
1 what are the four functional areas
marketing and sales
finance
operations
human resources
1 what is job production
when a product is supplied to meet the exact requirement of the customers
1 advantages of job production
flexible
provide a personal service
best way when technology isn’t used
1 disadvantages of job production
expensive
leads to higher prices
requires skilled employees
1 advantages of flow production
allows outputs to be in huge volumes
allow specialisation so workers can become more efficient
cost per unit is cheap
1 disadvantages of flow production
initial costs are high
risky as demand could fall
no flexibility as products are all the same
division of labour and specialisation can lead to boredom in workers
1 example of flow production
soft drinks supplier
fast food chains
car production lines
1 what is JIT
Just In time
produces to order
only produces when the customer wants it
1 what is JIC
Just In Case
holds stock just in case there is a delay from supplier or sudden increase in demands
1 what is kaizen
continuous improvement
employees think about ways to improve from previous delays
1 advantages of Just In Time
Low stockholding because held stock is minimised
less danger of theft or having to reduce prices if not sold
doesn’t require as much space
1 disadvantages of Just In Time
risk to production if difficulties with suppliers
business doesn’t benefit purchasing from economies of scale
more transport costs due to frequent deliveries
1 advantages of Just In Case
can meet the demands of sudden stock increases because of spares
lower risk to supply problems
buy in bigger quantities will give discounts as bulk buying
less transport costs because of less frequent deliveries
1 disadvantages of Just In Case
holds stock that might go out of date or need to have reduced price in order to sell
higher stockholding costs as emergency supplied are kept
1 advantages of kaizen
creates small changes over time, leading to significant improvements when the work is done
motivate employees as they are more involved in the production process and improvements
1 disadvantages of kaizen
employees have to be committed to the same goals as managers
some employees may want to resist this
1 what is efficiency
how well a business uses its resources
produce maximum output using fewest inputs
measured by unit costs
low unit costs means efficient
1 what does efficiency depend on
employee management
suppliers
level of investment in machinery
way products are produced
level of waste
1 what is stock
includes raw materials
work in progress
finished goods
1 advantages of stock
no loss of sales
-customers get what they need
gaining goodwill
-good reputation for reliability
shorter lead times
-not wait too long after purchase
1 disadvantages of stock
higher insurance costs
shrinkage
obsolescence
-stock can go out of date
storage costs
finance
-trade credit may run over and cost more
opportunity cost
-money tied up in stocks cannot be used elsewhere
1 why is Just In Time efficient
fewer costs for stock hold
helps to reduce overall costs
improve profits
1 why is Just In Time a bad thing
can’t benefit from purchasing economies of scale (lower cost per unit)
regular smaller deliveries may charge more than one large one
2 what are business suppliers
general items used to keep the business going
materials used in production process
machines- major purchases
2 what factors affect suppliers
costs
quality
range of products
delivery speed
flexibility
reliability
reputation
payment
contact terms
2 what is a supply chain
refers to all business people and that take part in the process from start to finish until it gets to the customers
2 what is procurement
involves suppliers establishing the terms of payment and negotiating contract ideas
2 what is logistics
planning, implementing, and co ordination of the procurement process
movement and storage of inventory
2 what is a trade off
better quality is likely to cost more but it might save money in the long run if customers are satisfied
faster or reliable suppliers are likely to be more expensive
more frequent supplies may also cost more
2 what are the stages of a supply chain
supplier
manufacturer
retailer
customer
3 what is quality
meeting targets set by the business in order to meet customer expectations
targets will be different for different businesses
airline- take off on time
chocolate brand- correct weight of bars
3 what is quality control
an approach that fixes mistakes after they have occurred
3 how do you measure quality
failure or reject rates
level of returns
complaints
low customer satisfaction
low loyalty
mystery visitors
staff checks
3 what are the consequences of quality problems
customer dissatisfaction
cost of recalling
cost of replacing goods
waste products if it can’t be reworked
legal action costs
3 it’s important to remember about quality that
it’s subjective
personal opinion
not always tangible
changes due to technology
quality control can be costly
3 how can you maintain good quality
reliable suppliers
quality raw materials
up to date equipment and machines
training of staff
inspect products at each stage
involve staff
3 what is Total Quality Management
when everyone is focused on preventing errors
ensure quality at each stage of production
better than quality control
prevents mistakes all together
not all employees want the responsibility
3 what is division of labour
when a worker focuses on a specific range of tasks
a specific task in production
3 advantages of labour division
workers become specialised in particular duties
enable business to produce large quantities of their products
3 disadvantages of labour division
lead to boredom
lower motivation = lower production
less pride so quality suffers
dissatisfied workers can lead to high levels of absenteeism
boredom can lead to high labour turn over
4 what is customer service
the part of a business’s activities that is concerned with meeting customers’ needs as fully as possible
4 what are methods of good customer service
reliability
safety
customer engagement
product information
after-sales service
well maintained premises
different payment methods
manage customer’s expectations
4 benefits of good customer service
attract new customers
increase spend
increase market share
increase customer loyalty
increase profitability
4 dangers of poor customer service
dissatisfied customers
problem attracting new customers
loss of revenue and profit
increased cost in replacing goods
4 where does poor customer service come from
promising more than they can provide
poor communication
poor management
external factors like supplier is delayed
4 impact of ICT on customers
websites
-helps business display products and info
-serve customers quickly and efficiently
e- and m- commerce
-customers can shop anytime, anywhere
social media
-communicate effectively
data analysis
-analyse customer purchase
-recommend new products
4 negative impact of ICT on customerd
ICT can’t treat customers fairly
