4. Decision making to improve operational performance

Question 1

how can a business improve its flexibility

Answer 1

• have spare capacity
• be able to offer varied order sizes
• offer flexible lead times
• offer mass customisation

Question 2

pros of mass customisation 4

Answer 2

• increased operational flexibility
• eliminate intermediatries
• less waste
• stimulating work environment

Question 3

cons of mass customisation

Answer 3

• requires CAM
• less scope for economies of scale
• more waste
• slower responsive speed
• lower capacity utilisation

Question 4

pros of buffer stock 2

Answer 4

1. manage uncertainty

2. negotiate a better deal with suppliers

Question 5

cons of buffer stock 2

Answer 5

1. higher storage costs

2. wastage

Question 6

9 criteria for choosing a supplier

Answer 6

1. price
2. quality
3. reliability
4. flexibility
5. capacity
6. payment terms
7. location
8. ethics
9. returns policy

Question 7

pros of outsourcing

Answer 7

• quicker response to increases in demand
• greater dependability for customers during periods of increased demand
• lower cost, particularly in cases of temporary increases in demand

Question 8

cons of outsourcing

Answer 8

• quality may suffer
• reliability of supplies may not be guaranteed
• it it likely to be more costly than producing in-house