Business Location & Logistics & Suppliers Flashcards
What things do business look at when choosing a location?
- Cost of Rent
- Who is in the area (customers / employees)
- Competitors
- Government Incentives
- Income of the area
What are Logistic Plans?
Implements and controls the effective flow and storage of goods between the point of origin and the point of consumption
What is Procurement?
The process of selecting suppliers whom you can by from, establishing the payment terms and negotiating the contracts.
Problems with having unreliable suppliers.
- Delays (deadlines may need to be extended which can affect profits)
- Refunds and Poor Customer satisfaction (profits decrease)
- Poor reputation
- Cost you Money
- Loss or customers (temporary)
- Idle machinery
- Slows down production (Time)
What kind of things would you expect from an excellent supplier?
- Punctuality
- Quality
- Economies of Scale
- Credit (being able to pay off later)
- Reliability
- Flexible Delivery
- Price
What decisions need to be made regarding Logistics?
- Time (how quickly you need your stock)
- Reliability of Supply (need new supplies frequently)
- Length of Supply Chain (Made and delivered quickly)
- Costs (Are your suppliers cheap or expensive)
- Customer Service (is customer service good)
What is Subcontracting?
Employ a firm or person outside ones company to do (work) as part of a larger project.
What is Transport and Modelling?
Is making transport as efficient as possible (designing routes)
What is Outsourcing?
Pay another factory to produce your products
What is Inventory Management?
Is the supervision of non-capitalised assets (inventory) and stock items.
What are the benefits of subcontracting?
- More cost effective
- Relieves you from having to pay employee taxes
What is Offshoring?
Is the relocation of a business process from one country to another
What are the Benefits of Offshoring?
- Economies of Scale
- Cheaper Labour Costs
What is Re-Shoring?
Transferring a business operation that was moved overseas back to the country from which it was originally located.
