Making operational decisions Flashcards
What does the term “business operations” refer to?
Business operations refer to the part of a business responsible for providing customers with the goods or services they ordered.
What resources are involved in business operations?
Business operations involve resources such as raw materials, finance, and the workforce, which are used to create finished goods or services.
How does operations relate to goods production?
For goods, operations include all activities within the factory, from producing goods to delivering them to customers.
How does operations differ when dealing with services?
For services, operations refer to the processes used to provide the service, such as ordering, delivery, and quality control.
Can you give an example of business operations in services?
A dairy company delivering milk to customers’ homes involves operations like managing orders via a website or app and maintaining quality control to ensure customer satisfaction.
Why is quality control important in business operations for services?
Quality control ensures that the service provided meets customer expectations and maintains the desired level of satisfaction.
What is job production?
job production involves making individual products one at a time, tailored to specific customer preferences. An example is tailor-made suits.
What are the advantages of job production?
Advantages include high profit margins for bespoke products, the ability for employees to use specialist skills, and customers getting exactly what they want.
What are the disadvantages of job production?
Disadvantages include the need for highly skilled staff (which increases costs), the potential lack of availability of skilled workers, and expensive staff training.
What is batch production?
Batch production involves making a set quantity (batch) of identical products. An example is a bakery producing a batch of white bread rolls.
What are the advantages of batch production?
Advantages include the ability to make a variety of sizes or flavours, partial automation, and the ability to produce more than job production.
What are the disadvantages of batch production?
Disadvantages include less flexibility regarding customer tastes than job production, higher costs compared to flow production, and a limit on production compared to flow production.
What is flow production?
Flow production involves continuously making identical products. It is highly automated and is used for large-scale production, such as a milk production line.
What are the advantages of flow production?
Advantages include the ability to make large quantities, consistency in production (identical products), and the process being highly automated.
How might a business combine different types of production processes?
A business might use batch production to produce goods in bulk, such as baking cakes, and then use job production to add custom features, like icing cakes according to individual customer preferences.
What are the disadvantages of flow production?
Disadvantages include low profit margins in competitive markets, the lack of customization for customer preferences, and the high cost of automation machinery.
What is productivity in a business context?
productivity is a measure of efficiency, often calculated as products produced per worker within a specific time period
How can a business improve productivity?
A business can improve productivity by investing in up-to-date machinery, providing incentives for workers, offering training, and encouraging employees to suggest time-saving ideas.
How does investing in machinery affect productivity?
Investing in new machinery can help produce more products in less time and may reduce the need for human workers by automating tasks, increasing overall efficiency.
What role do incentives play in improving productivity?
Incentives, such as pay bonuses or promotion opportunities, can motivate employees to work harder and faster, thereby increasing productivity.
How does training improve productivity?
Training staff enhances their skills, enabling them to work more efficiently and handle tasks faster, which increases overall productivity.
What is the benefit of encouraging staff suggestions for improving productivity?
Encouraging staff to suggest time-saving or efficiency-improving ideas can lead to innovative solutions, improving productivity and reducing costs.
How does productivity relate to a business’s costs and pricing?
Higher productivity helps reduce costs per unit, which can allow a business to offer more competitive pricing or increase its profit margins.
How does technology benefit businesses in production?
Technology helps businesses produce higher quantities, make products more consistent, and be more cost-effective, leading to increased efficiency.
How do costs play a role in the use of technology in production?
While technology requires upfront investment, it reduces production costs in the long run, such as replacing risky jobs with machinery, lowering wage costs and improving employee health.
How does technology affect productivity in production?
Technology, such as machinery and automation, increases productivity by speeding up production processes, allowing businesses to either lower prices or increase profit margins.
How does technology contribute to quality in production?
Automation and mechanisation help businesses produce consistent and high-quality products, reducing human error and improving overall standards.
Why is flexibility important when using technology in production?
: While automation is effective for mass production, it may not suit products that require personalisation, such as luxury cars, where some aspects may need hand-finishing to meet customer preferences.
How can businesses ensure that technology doesn’t have a negative impact?
Businesses must carefully manage technology costs, ensure that automation doesn’t reduce flexibility for custom products, and maintain quality control through consistent production processes.
What is procurement in the context of stock management?
Procurement refers to obtaining the right supplies from the right suppliers to ensure smooth production and stock availability.
Why is effective stock control important for businesses and customers?
Effective stock control ensures that products are available for customers, preventing stockouts and lost sales while also helping businesses avoid excess inventory.
What negative consequences can occur if a business holds too much stock?
Holding too much stock can lead to high storage costs, increased waste (especially for perishable goods), and reduced income if excess stock is sold off at discounted prices.
How can poor stock management impact production?
If stock is not managed efficiently, it can lead to production delays or stoppages, as parts or materials may not be available when needed, halting the entire production line.
