Business topic 3 - Production Flashcards
Define the term
“Procurement”.
Procurement means getting the right supplies from the right supplier, at the right price and at the right time.
Define the term ‘Supply chain’
and list the three stages in
order.
Supply chain - The process of developing, sourcing, producing and providing goods and services to consumers
The three stages are -
1. procurement
2. logistics
3. stock control
Define the term “Logistics”
Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination.
When deciding on the most suitable transportation method, what does a business need to consider? List 4.
1) Cost of Transport.
2). Reliability and Regularity of Service.
3) Safety.
4) Characteristics of goods.
Why might there be a trade off when choosing suppliers?
Firms have to trade-off between price, quality, and other value-added features when choosing suppliers for key components and raw materials.
When procuring supplies what does a manager need to consider?
Quality and reliability.
Speed and flexibility.
Value for money.
Strong service and clear communication.
Financial security.
Define the three methods of production.
Job/ One off production - when individual products are made one at a time to meet specific customer preferences
Batch production - a method whereby a group of identical products are produced simultaneously (rather than one at a time)
Flow production - a manufacturing process that is defined by the continuous ‘flow’ of goods along an assembly line.
Define ‘Just-in-Time’.
State an advantage and a disadvantage
Just in time - focus on producing exactly the amount you need at exactly the time your customers need it.
Advantage - Prevents over production
Disadvantage - Risk of running out of stock:
Define ‘Just-in-Case’.
State an advantage and a disadvantage.
Just in case - where companies keep large inventories on hand.
Advantage - Reduce the chance of running out of stock.
Advantage - Benefit from bulk-buy discounts/ economies of scale
Disadvantage - Buffer stock space requires more storage space at more cost to the business.
Disadvantage - Products kept in stock for a long period of time may lose their freshness.
Explain how a supplier could cause problems for a business.
Suppliers directly influence the quality and reliability of the products a business offers. If a company’s suppliers consistently provide low quality materials or products that do not meet industry standards, it can damage its reputation of the company.
Define ‘Quality’ and explain why quality is important for a business
Quality is the standard of a product. Good quality makes sure that a high-class product/service is being produced. Quality is important for customer satisfaction that ultimately results in customer loyalty.
State 3 ways in which a business could manage quality.
- check the raw materials from the suppliers
- Feedback from customers
- Factory inspectors
Explain what is meant by the term ‘Buffer Stock’.
Extra inventory kept on hand in case of manufacturing delays or an unexpected increase in demand. Simlar to ‘just in case’.
Explain the difference between Quality Control and Quality Assurance.
Quality control - The process of inspecting products and services to ensure that what customers receive is of a high standard.
Quality assurance - process of carrying out quality checks at specific stages during the production process.
why is effective stock control is important to a business.
This allows the business owner to have visibility of stock value, increase profit margins, increase efficiency, and improve customer satisfaction
