Business Flashcards
Define buffer inventory
the buffer inventory level is the inventory held to deal with uncertainty in customer demand and deliveries of supplies
Kaizen advantages
- increased productivity
- reduced amount of space needed for the production process
JIT advantages
- Reduced Inventory Costs - By receiving goods only as they are needed in the production process, businesses can significantly lower inventory holding costs.
- Minimised Waste - by producing only what is required, reducing excess production and minimising waste.
JIT disadvantages
- unreliable suppliers - e.g late or poor quality deliveries can quickly halt production
- Increased Transportation Costs - Frequent, smaller deliveries can be more expensive.
Job production advatages
- customised products can be produced
- more varied work increases employee motivation = giving them greater job satisfaction
Job production disadvantages
- High Setup Costs - Labor-intensive and requires skilled workers, leading to increased production expenses
- Longer Production Time - Custom-made items take more time to produce, resulting in longer lead times.
Batch production advantages
- Efficiency - Producing in batches can lead to economies of scale, reducing the cost per unit.
- Flexibility - Allows for the production of different products in succession, catering to varying customer demands.
Batch production disadvantages
- Idle Time - Equipment and workers may be idle between batches, leading to inefficiencies and wasted resources.
- Inconsistent Quality -Variability between batches can lead to inconsistencies in product quality, which can affect customer satisfaction.
Flow production advantages
- High Efficiency - Continuous production process minimises downtime, maximising output and reducing unit costs.
- Consistent Quality - Standardised processes ensure uniform product quality, enhancing customer satisfaction.
Flow production disadvantages
- High Initial Costs - Significant investment in machinery and equipment is required.
- Lack of Flexibility - Difficult to change production processes or adapt to new products, limiting the ability to respond to market changes.
New technology advantages
- Increased Efficiency - Automation and advanced technology streamline processes, reducing production time and operational costs.
- Enhanced Data Analysis - New technologies enable better data collection and analysis, leading to more informed decisions
New technology disadvantages
- High Costs - Initial investment and ongoing maintenance for new technology can be expensive.
- Training Requirements - Employees need to be trained to use new technology effectively, which can be time-consuming and costly.
Average costs of production formula
Total cost of production (in a time period) / total output (in a time period)
Define economies of scale
Are factors that lead to a reduction in average costs as a business increases in size
Define diseconomies of scale
Are the factors that lead to increase in average cost as a business grows beyond a certain size
Margin of safety
Is the amount of which sales exceeded the break even point
break even point of production formula
Total fixed costs / contribution per unit
Quality control advantages
- Consistent Product Quality - Ensures products meet specified standards, leading to higher customer satisfaction and fewer returns.
- Reduced Costs - Identifies and addresses defects early, minimising waste and avoiding costly rework or recalls.
Quality control disadvantages
- Increased Costs - Implementing quality control measures requires resources for inspections, testing, and staff training.
Potential Delays: Quality checks can slow down production processes, potentially leading to delays in delivery and impacting overall efficiency.
Quality assurance advantages
- Enhanced Customer Confidence - Demonstrates a commitment to quality, which can boost customer trust and loyalty.
- Improved Efficiency - reduces errors by implementing standards and best practices, leading to more consistent and efficient operations.
Quality assurance disadvantages
- high costs - expensive to train employees to check the quality of the work at each stage of production
-Time-Consuming - Developing and maintaining quality assurance processes can be time-intensive, potentially slowing down production and affecting overall efficiency.
Total quality management advantages
- Improved Quality - continuous improvement across all areas, leading to higher product and service quality.
- Enhanced Customer Satisfaction - Focuses on meeting or exceeding customer expectations, which can boost loyalty and competitive advantage.
Total quality management disadvantages
- high costs - expensive to train all employees to check the product or service
- employee responsibility - relies on all employees following TQM ideology and accepting responsibility for quality
Advantages of internal recruitment
- the person is already known to the business and the reliability, ability and potential are known
- quicker and cheaper than external, which may involve expensive advertising
Disadvantages of internal recruitment
- jealousy
- quality of internal candidates might be low
Advantage to a business employing part time employees
- easier to extend operating hours by working evenings or weekends
- reduce costs compared to paying a full time worker
Advantages to induction training
- may be legal requirements to give health and safety training at start if their job
- means workers are less likely to make mistakes
Disadvantages of induction training
- wages are paid but no work is being done by the workers
- delay start of employee commencing their job
Advantages to on the job training
- it ensures there is some production from worker while they are training
- training tailored to the specific needs of the business
disadvantages of on the job training
- trainer will not be as productive as usual because they are showing the trainee instead of working on their job
- many no lead to training qualifications recognised outside the business
Advantages of off the job training
- employees may be taught a variety of skills - multi skilled
- business will only pay for the course but no output is lost
Disadvantages of off the job training
- wages paid but no work for the trainee
- additional qualifications mean is easier for employee to leave and find another job
Advantages of verbal communication
-info can be quickly given out - efficient way of communicating with large number of people
disadvantage of verbal communication
- no telling whether the employees was listening and understood the message
- longer to receive feedback occurs than written form like email
Advantages of written communication
- elec communications is quicker and cheaper ways to reach a large number of people
- hard evidence of the message which can be referred in the future
Disadvantages of written communication
- not easy to check of message has been received
- if message written to long it may be confusing and lose interest of the reader
Visual communication advantegs
- written message clearer by adding a chart of diagrams to illustrate the point
Visual communication disadvantages
- no feedback and sender of message may need to use other forms of communication to check the message has been understood
Advantages of primary research
- up to date and relevant to the business
-most effective when used to gather info which will help the business with a specific problem
Disadvantages of primary research
- not available immediately time consuming
- expensive- individual interviewing people
Advantages of questionnaires
- can be online
- customers opinion about the product or service can be obtained
