Chapter 3

Question 1

What is a supply chain?

Answer 1

Consists of the group of firms that are involved in all various processes required to make a finished product or service available to the customer

Question 2

What does the supply chain begin with?

Answer 2

Provider of raw materials

Question 3

What does the supply chain end with?

Answer 3

Ends with firm that sells the finished product

Question 4

How will the members of the supply chain vary?

Answer 4

Will vary depending on the type of product or service , but will typically include suppliers , manufacturers , distributors and retailers.

Question 5

How does price effect the supplier you choose?

Answer 5

• firms have to decide how much they are willing to pay and whether cost is first priority
• if they want to cut down the time it takes to serve customers, suppliers that offer faster delivery may rate higher than those that compete on price alone
• also cheaper suppliers will often supply lower quality products. Firm needs to balance reduced costs with the quality of the product or service it wants to provide

Question 6

How does quality effect the supplier a firm chooses?

Answer 6

• quality of supplies needs to be consistent
• growth of internet means that customers can be much more selective about quality- its easier for them to shop elsewhere if theyre not happy with the quality if the product
• customers will associate poor quality with the business they buy from, not the suppliers

Question 7

How does reliability effect the supplier?

Answer 7

• if a supplier lets a firm down , that firm may not he aboe to supply its own customers
• suppliers need to deliver high quality products on time

Question 8

What does procurement mean?

Answer 8

Finding and buying things that a firm needs from suppliers outside of the firm. E.g clothes manufacturer, procurement would involve finding and buying the materials needed

Question 9

What are logistics?

Answer 9

Means getting the goods or service from one part of the supply chain to another. E.g clothes manufacturers would need to have the material it needs transported to its factory

Question 10

How does having an effective procurement and logistics help the business?

Answer 10

• Improves efficiency, business will have the supplies it needs st the right time.
• can reduce overall costs. If business gets supplies at the best price and it doesn’t waste money by being inefficient it will have lower overall costs .

Question 11

How is a good relationship with the supplier a positive?

Answer 11

Make sure processes are being carried out in ways that are most efficient and cost effective

Question 12

How is finding the best price and value of a supplier helping the business?

Answer 12

• often many suppliers for a business to choose from
• businesses that research potential suppliers can make sure they are getting the bets price and value of the goods they need

Question 13

How finding a good supplier can help reduce waste and unnecessary costs ?

Answer 13

• make business kore streamlined

- more efficient

Question 14

When is job production used?

Answer 14

When a firm manufactures individual , unique products . Each product has a unique design based upon the customers specification. If they’re made in a factory , the firm will need to retool(install new equipment in) its factory each time it makes a new product

Question 15

What does job production usually require?

Answer 15

Often requires skilled labour and have a high labour to capital ratio(lots of workers are need , but relatively little financial investment) they can be very labour intensive. Usually expensive and take a long time, but they’re also high quality.

Question 16

Examples of product made in job production?

Answer 16

Building ships and bridges, handmade crafts such as furniture and made to measure clothing

Question 17

What is job production?

Answer 17

One thing is made at a time

Question 18

What is flow production?

Answer 18

All products are identical and aim is to produce as many as possible along an assembly line. To be efficient , production has to be continuous with no stoppages-many flow production factored operate 24 hours a day with workers rotating shifts

Question 19

What does flow production help gain?

Answer 19

Economies of scale and so a lower average unit cost. Robots and machines used, requires lots of money and space for storage

Question 20

What is flow production used for?

Answer 20

Used for mass market product, most modern consumers goods are produced this way

Question 21

What is lean production?

Answer 21

Strategy by a business to male production kore efficient. Business aims to use few resources as possible and to have as little waste as possible. Workers are also encouraged to think of ways to increase productivity

Question 22

What is just in time production?

Answer 22

Form of lean production. Aims to keep stock levels to the bare minimum. Ideally all raw materials come in one door , are made into products and go straight out another door.

Question 23

How just in time used to manage stock?

Answer 23

• reduces costs of having stock
• main problem is it relies upon a lot of coordination between firms and its suppliers, lots of frequent deliveries of stock, and if there is an issue with supplier might not have anything to sell.
• loose out on purchasing economies of scale, small quantities bought

Question 24

what just in case?

Answer 24

Method of operating a production and distribution system with buffer stocks of items at every stage of their process , from raw materials to finished products , just in case there is a supply shortage or customer demand increases unexpectedly

Question 25

How just in case can be used to manage stock?

Answer 25

• buffer stock ready if supply problem

- firms will have higher costs for storing resources

Question 26

What does quality depend on?

Answer 26

• materials

- production methods

Question 27

Benefits of maintaining quality?

Answer 27

• higher prices , customers are often prepared to pay higher prices for good quality goods or services
• increased sales, if pleased with purchase may make repeat purchase, increasing sales.
• better reputation and image

Question 28

Costs of maintaining quality?

Answer 28

• staff training, to produce quality products staff need to be doing their job properly, training will cost money
• inspection, products need incessant inspection to see if quality is good enough, this costs time and money

Question 29

How failure to maintain quality can lead to problems?

Answer 29

• disrupt provision of services. E.g if a kitchen in restaurant is seen as unhygienic , it will be closed down.
• product recalls, effects image and costs

Question 30

How to measure the quality of a product?

Answer 30

• specify the physical properties of a product and test a random sample to see if it meets requirements
• monitor how many products get returned and how many customers complaints
• carry out customer surveys

Question 31

Stages of checks for quality?

Answer 31

1. Check raw materials from suppliers
2. Random samples taken to check quality of work in progress
3. Random samples taken of finished product , items removed if they dont meet quality requirements.

Question 32

What is total quality management?

Answer 32

Strategy aims to make quality the responsibility of every employee in a firm , in order maintain quality . Employees are encouraged to think about customer needs. Emphasis of after sales service as well as quality production . Negative of this is it takes time to introduce. Workers need to be trained, extra work could demotivate employees

Question 33

How can rapid growth make quality harder to maintain?

Answer 33

• may be more expensive to carry out necessary quality inspections
• business could be overwhelmed by order and cut corners
• may need to hire more employees, but will take time to train them
• might outsource some tasks which will be difficult to monitor
• might become a franchisor which will be difficult to monitor

Question 34

Sales process?

Answer 34

1) finding potential customers
2) approaching potential customers
3) assessing the customers needs
4) presenting product
5) closing
6) follow up, check if they are happy

Question 35

How having excellent product knowledge can help provide great customer service?

Answer 35

• can answer all questions quickly and accurately
• can make sure product is suited to buyer
• the customer feels more confident buying from the firm

Question 36

How engaging well with customers will help provide great customer service?

Answer 36

• ensure customers have a positive experience
• staff need to be polite and friendly
• could give refreshments or other things like next day delivery

Question 37

How offering post sale service will help customer service?

Answer 37

• may offer training
• help lime if any issues with product
• might need servicing , to check if still ok, things like boilers and cars

Question 38

How websites and e-commerce help customer service develop?

Answer 38

• provide 24 hour ordering on their websites, easier for customers to buy
• frequently asked questions and contact details if issues with the product
• some let customers set up online accounts so they can access services on the web

Question 39

What is ecommerce?

Answer 39

Customers buying and selling goods online

Question 40

How social media helps with customer service?

Answer 40

• allow people to share and communicate online
• firms can use this to communicate with customers
• also a quick and easy way for customers to contact a business

Question 41

Benefits of good customer service?

Answer 41

• leads to high levels of customer satisfaction
• satisfied customers are more likely to remain loyal to the company and make repeat purchases in future
• customers may be persuaded to spend more money with a company that provides them with good customer service.

Question 42

Dangers of poor customer service?

Answer 42

• more likely to have dissatisfied customers

- may lead to negative publicity, poor reputation.