Inside of Production

Question 1

Define Production.

Answer 1

The process of turning raw materials into goods and services that can be sold.

Question 2

What do all different forms of production all involve?

Answer 2

Inputs such as labour, raw materials and energy being transformed into outputs.

Inputs → Transformation (adding value) → Outputs

Question 3

What are the two types of production?

Answer 3

Job Production and Flow/Mass Production

Question 4

What is Job Production?

Answer 4

A method of production where a product is produced that meets specific customer requirements.

Question 5

What is Flow/Mass Production?

Answer 5

The continuous movement of items through the production process using production lines to manufacture products.

Question 6

Define Efficiency.

Answer 6

How well a business uses its resources to produce products.

Question 7

If a business was to become more efficient, what would it mean?

Answer 7

High amount of output with a low amount of input.

Question 8

What is Lean Production?

Answer 8

Using as few resources as possible with as little waste as possible whilst ensuring quality to increase efficiency of production.

Question 9

What are the two types of Stock Management?

Answer 9

Just in Time (JIT) and Just in Case (JIC).

Question 10

Why is Managing Stock important?

Answer 10

The more stock you have the more it costs to store, but if they have too little then they risk running out.

Question 11

What is Just in Time (JIT)?

Answer 11

When inputs arrive and outputs are produced just when they are needed.

Question 12

What is Just in Case (JIC)?

Answer 12

A method of operating a production and distribution system with buffer stock (extra stock) of items at every stage of the process just in case there is a shortage in supply or customer demand suddenly increases.

Question 13

Define Inventory.

Answer 13

The amount of stock.

Question 14

Define Buffer Stock.

Answer 14

Extra stock incase of demand increase.

Question 15

Define Lead Time.

Answer 15

How long it takes for the new stock to arrive.

Question 16

Define Procurement.

Answer 16

Getting the right supplies from the right supplier at the right price.

Question 17

What are three factors of an Effective Supplier?

Answer 17

Price (value for money), Quality (consistently providing the quality that is expected by the customer; the right product at the right time), Reliability (delivers correct product on time and goods and services work as described).

Question 18

Define Logistics.

Answer 18

Making sure the correct products are procured and that they will arrive when needed.

Question 19

What are the three main elements of Logistics?

Answer 19

Transportation, Storage And Distribution.

Question 20

What are two benefits of Managing an Effective Supply Chain?

Answer 20

1. Increased efficiency - order to despatch times can be reduced.
2. Lower unit costs - prices can be negotiated with suppliers to make sure that a business receives value for money.

Question 21

Define Quality.

Answer 21

Meeting the needs and wants of a customer.

Question 22

How can a business measure the quality of its products and services?

Answer 22

• Levels of product return.
• Failure/ Reject rates.
• Customer satisfaction.
• Customer complaints.
• Customer loyalty.
• Mystery Shoppers.

Question 23

What are the three ways of Managing Quality?

Answer 23

• Quality Control.
• Quality Assurance.
• Total Quality Management (TQM).

Question 24

What is Quality Control?

Answer 24

The process of inspecting products and services to ensure that what the customer receives is of high standards. Products are checked at the end of the production process.

Question 25

What is Quality Assurance?

Answer 25

A process carrying out quality checks at specific stages during the production process to ensure that faults are found sooner rather than at the end of the production process.

Question 26

What is Total Quality Management (TQM)?

Answer 26

The aim to make quality the responsibility of every employee in a business order to make sure the quality remains the same. The focus is on getting things right the first time reducing costs by cutting down on waste.

Question 27

What are three advantages of TQM?

Answer 27

• Quality is embedded into the organisation resulting in few quality issues.
• Improved motivation for employees as they are accountable for quality.
• Increase in sales and repeat purchase from providing consistent levels of quality.

Question 28

What are three disadvantages of TQM?

Answer 28

• Time consuming.
• Increased levels of cost due to need to train employees.
• Employees may demand higher wages.

Question 29

What are four benefits of Maintaining Quality?

Answer 29

• Increased customer loyalty leading to additional sales.
• Fewer returns, product recalls and replacements lowering costs.
• May be able to charge at higher price.
• Strong brand image and reputation for quality; may attract new customers.

Question 30

What are the costs of Maintaining Quality?

Answer 30

• Costs of maintaining consistent levels of quality.
• Costs of training.
• Costs of time.
• Costs of maintaining quality, such as auditing suppliers.

Question 31

What are three pros of holding high levels of stock?

Answer 31

• If there is a high demand in a specific item.
• Doesn’t affect reorder levels as they won’t need to pay.
• No distractions for staff as they are concentrated on selling and not restocking and tidying up.

Question 32

What are three cons of holding high levels of stock?

Answer 32

• Items could become a waste if no one buys it/ interested in it as items could become out of fashion quickly.
• High inventory costs (warehouse).
• Need high levels of labour in warehouse.

Question 33

What are three pros of holding low levels of stock?

Answer 33

• Less risk of waste from excess stock.
• Could make items seem more premium therefore attracting more serious customers and more interest from customers as they may think its running out.
• High traffic/ footfall for e-commerce.

Question 34

What are three cons of holding low levels of stock?

Answer 34

• Could run out of stock quickly if there is a high demand.
• Less stock could disinterest buyers.
• Need good relationship with suppliers to make sure theres enough stock at warehouse.