Business Operations (3)

Question 1

Why is it important to have a dependable supply chain?

Answer 1

All the members of the supply chain need to be dependable. If any are unreliable, the product won’t be ready when it needs to be, or the quality will be poor which will reflect badly on the company selling it

Question 2

What different factors are important when choosing a supplier?
(3 factors)

Answer 2

• Price- the total cost of getting the product
• Quality
• Reliability

Question 3

What does Procurement mean?

Answer 3

Procurement means finding and buying things that a firm needs from suppliers outside of the firm

Question 4

What does Logistics mean?

Answer 4

Logistics means getting goods or services from one part of the supply chain to another

Question 5

If companies manage their supply chain effectively, what benefits does it bring?

Answer 5

• Good relationship with suppliers
• Finding the best price and value
• Reducing waste and unnecessary costs

Question 6

What are the 4 methods of production?

Answer 6

• Job production
• Flow production
• Lean production
• Just-in-time production (JIT)

Question 7

What is Job Production?

Answer 7

Each product has a unique design based on the customers specification

Question 8

What is a benefit of Job Production?

Answer 8

They’re very high quality

Question 9

What is a disadvantage of Job Production?

Answer 9

They’re usually expensive and take a long time to make

Question 10

What is Flow Production?

Answer 10

Flow Production is making lots of things continuously. They all have to be the same and they aim to gain from economies of scale and so have a low unit cost

Question 11

What is Lean Production?

Answer 11

A production strategy that aims to use as few resources as possible and to have as little waste as possible

Question 12

What is Just-in-time Production (JIT)?

Answer 12

JIT Production is a form of lean production. It aims to keep stock levels to the bare minimum. Raw materials come in when they need them, and come out just in time to be sold

Question 13

What are two ways of managing stock?

Answer 13

• Just-in-time (JIT) Ordering stock in time for production
• Just-in-case (JIC) Ordering more stock in case there is a
  supply shortage or customer demand increases
  unexpectedly

Question 14

What are the Benefits of maintaining quality?

3 Benefits

Answer 14

• Higher Price- customers will be more likely to pay a
  higher price for a better quality product
• Increased sales- When customers are pleased with the
  quality a business provides, they’re likely to buy it again
• Better reputation and image- Businesses that provide
  higher quality products are likely to have a better
  reputation

Question 15

What are the Costs of maintaining quality?

2 Costs

Answer 15

• Staff Training- Staff need to be able to do their job
  properly to achieve high quality
• Inspection- Products need to be inspected to check
  quality is good enough. This process costs both time and
  money

Question 16

What are the 3 different stages of the production process?

Answer 16

Stage 1: Checking raw materials from suppliers
Stage 2: Random samples taken to check quality of work
in progress
Stage 3: Random samples taken of finished products with
items being removed if they don’t meet required
quality

Question 17

What does Total Management Quality do?

Answer 17

The TQM strategy aims to make quality the responsibility of every employee in a firm, in order to make sure that quality remains consistent

Question 18

What is a downside of TQM?

Answer 18

It takes a long time to introduce. Workers need training so that they see quality as their responsibility- they may get demotivatedWat

Question 19

What are some ways of showing good customer service?

3 ways

Answer 19

• Having excellent product knowledge
• Engaging well with the customer
• Offering post-sales services (being available for the
  customer after the sale)

Question 20

What are the benefits of good customer service?

3 benefits

Answer 20

• High levels of customer satisfaction
• Satisfied customers are more likely to remain loyal
• Customers may be persuaded to spend more in the
  future

Question 21

What are the disadvantages of poor customer service?

2 disadvantages

Answer 21

• Higher levels of customer dissatisfaction
• People will tell others about the poor customer service
  they have received and they could get a bad reputation