3.4.3 Making operational decisions to improve performance: Flashcards
1
Q
The importance of capaciy
A
2
Q
Advantage of having buffer stock
A
- if we have unexpected demand, we can access our buffer stock
- safety net if suppliers underdeliver/delay giving supply
- holding minimum stock suggests we buy alot>can access purchasing economies of scale (since our BIG orders r likely less frequent)>cost per unit goes down
3
Q
What is the disadvantages of having buffer stock
A
4
Q
What is capacity utilisation
A
Percentage of our maximum output being used
5
Q
Value of capacity utilisaition
A
Higher caput Suggests resources are being used efficiently.
6
Q
What is just in time production?
A
7
Q
Why is low capacity good?
A
-Capital-can service our machinery e.g fix faults
-Operational flexibility
generally its bad tho cause unit costs go up so our break even point is higher.
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8
Q
Why is high capacity good
A
