Business 2 Flashcards
Operations Finance Influences on Business
What is job production?
Production where products are made individually.
What is batch production?
Production where one product type is made in a batch and then the product type is changed for the next batch.
What is flow production?
Production where one type of product is made continuously on a production line.
Give an example of job production.
Building a ship or bridge.
Give an example of batch production.
Baking bread or making furniture.
Give an example of flow production.
Making cars or iPhones
What are the advantages of job production?
Generally high quality products
Workers gain satisfaction on completion of a product
What are the advantages of batch production?
The need of the customer can be met by changing product
Batches are made to the customer, decreasing the cost of material storage
What are the advantages of flow production?
Large quantities can be made
Machines can be used, keeping costs low
What are the disadvantages of job production?
High production costs
Labour costs will be higher due to need for skilled labour
What are disadvantages of batch production?
Takes a large amount of time to switch to a different product
Workers may find tasks repetitive and boring
What are the disadvantages of flow production?
Goods produced may be low quality
Expensive to setup a production line
What is automation?
The use of machines not controlled by a human within the production line.
What are the advantages of technology?
Costs are reduced due to lower amount of staff
Machines are able to work 24/7
Machines are able to do work which is too dangerous for humans
What are the disadvantages of technology?
Workers may be made redundant
New skilled workers will be needed
If machines break, production will be disrupted.
What is quality of production?
Ensuring the product or service is fit for purpose, meets legislative rules and expectations.
What are the benefits of providing quality products
Avoids waste
Avoids product recalls
Improves reputation and sales
What is quality control?
Checking for quality at the END of production.
What is quality assurance?
Checking for quality DURING the production process.
What is total quality management (TQM)?
A management approach with focus on quality within the business.
What are the advantages of quality control?
Helps prevent faulty goods and services being sold
Not disruptive to the production process
What are the advantages of quality assurance?
Less wastage, reducing production costs
Workers may feel valued as they have a responsibility to check quality
What are the disadvantages of quality control?
Does not prevent waste of resources
Does not encourage workers to be responsible for quality
What are the disadvantages of quality assurance?
Could disrupt the production process
High costs to train staff to check for quality
What are three methods of selling?
e-commerce
face to face
telesales
What is e-commerce?
The process of bringing the buyer and seller together digitally.
What changes in business have been caused by e-commerce
Location Skill Development Creation of specific departments Click and collect Delivery options
What are the advantages of e-commerce to the business?
Sell worldwide
Open 24/7
Lower operating costs
What are the advantages of e-commerce to the customer?
Price comparison
24/7 availability
Wide range of products
What are the disadvantages of e-commerce to the business?
Worldwide competition
Online security
Having to keep up with technology advancements
What are the disadvantages of e-commerce to the customer?
Lack of personal contact
Payment method limitations
Cannot physically see item before purchase
Why is customer service important?
Helps maintain and increase sales.
Why is after sales service important?
Keep up with competition to provide customer with best company experience.
What are consumers protected by?
Consumer Rights Act 2015 - Goods and services must be sold of satisfactory quality, fit for purpose and be as described.
What rights do customers have in regards to refunds?
30 day time period to return faulty goods for full refund
6 months for a fault to develop, presumed to be sold with it, refund should be issued.
A service should be carried out again if it is unsatisfactory.
What impact does consumer rights have on business?
High quality production
Production of safe goods
Reputation of business will be lost if standard low/product not up to it.
What are some factors which could influence location?
Site cost Transport infrastructure Nearest market distance Government Raw materials distance Business type/nature
What is procurement?
The management of buying or purchasing areas within business.
What is the role of procurement?
Identifying goods and services to buy
Choosing suppliers
Ordering goods
Receiving deliveries
What factors affect what customers will buy?
Time of year
Changes in technology
Changes in fashion and lifestyle
What factors affect the supplier choice?
Quality
Reputation
What areas of ordering goods can procurement decide?
Range of products
Quantity - see if discounts are available
What are the impacts of logistics and supply decisions on the business?
Time Reliability of the supply Length of the supply chain Costs Customer Service
What is the finance department responsible for?
Providing information about costs and revenues. This info can be used in cash flow, profit, loss and data on average rate of return.
What are short term finance options
Internal
Owner’s Capital
Sale of fixed assets
External
Overdraft
Trade Credit
What are medium term finance options?
Internal
Retained profit
Sale of fixed assets
Owner’s capital
External
Bank Loan
Crowdfunding
What are long term finance options?
Internal
Retained profit
Sale of fixed assets
Owner’s Capital
External Bank loan Taking on a new partner Share issue Crowdfunding
