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Business Studies > Making operational decisions > Flashcards

Making operational decisions Flashcards

1
Q

What does the term “business operations” refer to?

A

Business operations refer to the part of a business responsible for providing customers with the goods or services they ordered.

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2
Q

What resources are involved in business operations?

A

Business operations involve resources such as raw materials, finance, and the workforce, which are used to create finished goods or services.

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3
Q

How does operations relate to goods production?

A

For goods, operations include all activities within the factory, from producing goods to delivering them to customers.

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4
Q

How does operations differ when dealing with services?

A

For services, operations refer to the processes used to provide the service, such as ordering, delivery, and quality control.

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5
Q

Can you give an example of business operations in services?

A

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.

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6
Q

Why is quality control important in business operations for services?

A

Quality control ensures that the service provided meets customer expectations and maintains the desired level of satisfaction.

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7
Q

What is job production?

A

job production involves making individual products one at a time, tailored to specific customer preferences. An example is tailor-made suits.

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8
Q

What are the advantages of job production?

A

Advantages include high profit margins for bespoke products, the ability for employees to use specialist skills, and customers getting exactly what they want.

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9
Q

What are the disadvantages of job production?

A

Disadvantages include the need for highly skilled staff (which increases costs), the potential lack of availability of skilled workers, and expensive staff training.

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10
Q

What is batch production?

A

Batch production involves making a set quantity (batch) of identical products. An example is a bakery producing a batch of white bread rolls.

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11
Q

What are the advantages of batch production?

A

Advantages include the ability to make a variety of sizes or flavours, partial automation, and the ability to produce more than job production.

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12
Q

What are the disadvantages of batch production?

A

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.

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13
Q

What is flow production?

A

Flow production involves continuously making identical products. It is highly automated and is used for large-scale production, such as a milk production line.

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14
Q

What are the advantages of flow production?

A

Advantages include the ability to make large quantities, consistency in production (identical products), and the process being highly automated.

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15
Q

How might a business combine different types of production processes?

A

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.

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15
Q

What are the disadvantages of flow production?

A

Disadvantages include low profit margins in competitive markets, the lack of customization for customer preferences, and the high cost of automation machinery.

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16
Q

What is productivity in a business context?

A

productivity is a measure of efficiency, often calculated as products produced per worker within a specific time period

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17
Q

How can a business improve productivity?

A

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.

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18
Q

How does investing in machinery affect productivity?

A

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.

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19
Q

What role do incentives play in improving productivity?

A

Incentives, such as pay bonuses or promotion opportunities, can motivate employees to work harder and faster, thereby increasing productivity.

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20
Q

How does training improve productivity?

A

Training staff enhances their skills, enabling them to work more efficiently and handle tasks faster, which increases overall productivity.

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21
Q

What is the benefit of encouraging staff suggestions for improving productivity?

A

Encouraging staff to suggest time-saving or efficiency-improving ideas can lead to innovative solutions, improving productivity and reducing costs.

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22
Q

How does productivity relate to a business’s costs and pricing?

A

Higher productivity helps reduce costs per unit, which can allow a business to offer more competitive pricing or increase its profit margins.

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23
Q

How does technology benefit businesses in production?

A

Technology helps businesses produce higher quantities, make products more consistent, and be more cost-effective, leading to increased efficiency.

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24
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.
25
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.
26
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.
27
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.
28
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.
29
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.
30
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.
31
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.
32
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.
33
Why is stock control important for maintaining customer satisfaction?
Customers expect to find the products they want when they visit stores. Poor stock management can lead to out-of-stock situations, disappointing customers and losing sales.
34
What is the potential impact on pricing if a business has too much stock?
Excess stock may lead to increased storage costs, which could force the business to raise prices to cover these additional costs.
35
What is the core principle of Just-in-Time (JIT) stock control?
JIT stock control involves ordering raw materials in smaller, more frequent quantities, with deliveries made just before existing stock runs out. No buffer stock is kept.
36
Why is a good relationship with suppliers essential for JIT stock control?
A strong supplier relationship ensures timely and accurate deliveries, reducing the risk of stockouts and delays in production.
37
What is a potential disadvantage of JIT stock control in relation to unexpected changes in demand?
JIT may struggle to react to sudden demand surges (e.g., a heatwave increasing demand for ice cream), leading to potential stock shortages.
38
How does JIT help businesses in terms of storage?
JIT eliminates the need for buffer stock, freeing up storage space that can be used for other purposes, such as sales.
39
What is the benefit of fresher products with JIT stock control?
Smaller and more frequent deliveries mean products, especially perishables like fresh fruit and vegetables, are fresher and sold faster.
40
How does JIT help with capital efficiency?
JIT reduces the amount of capital tied up in stock, freeing up money for reinvestment or other business needs.
41
How can JIT reduce waste?
By having fewer goods in stock, JIT reduces the risk of stock going out of date or out of fashion, leading to lower waste.
42
What is a disadvantage of JIT related to bulk-buy discounts?
JIT businesses may not benefit from bulk-buy discounts, as they only purchase smaller quantities of stock at a time.
43
What can happen if a business misjudges its stock needs in a JIT system?
Misjudging stock levels can lead to stockouts, poor customer service, and missed sales opportunities.
44
Why is cost an important factor when choosing a supplier?
Cost affects variable costs, allowing businesses to maintain higher profit margins. Buying in larger quantities can also give businesses leverage to negotiate discounts.
45
How does quality influence supplier selection?
Quality is essential even for budget products. Businesses must ensure that the raw materials are of high quality to produce products that meet customer expectations, regardless of price point.
46
Why is delivery important in supplier relationships?
Timely delivery is critical to prevent disruptions in the manufacturing process or stockouts in retail. Businesses may penalize suppliers for late deliveries to maintain a smooth operation.
47
What role does availability and capacity play in choosing suppliers?
Suppliers must be able to meet demand increases, especially in unexpected situations
48
How does trust affect supplier relationships?
Trust is vital for managing trade credit (paying suppliers later after selling products) and protecting confidential information like designs or business strategies.
49
Why might businesses seek local suppliers?
Local suppliers can reduce delivery lead time, ensuring quicker deliveries and reducing the risk of delays, which is particularly important for businesses with tight production schedules.
50
What is the difference between procurement and logistics?
Procurement is the process of obtaining the right supplies from the right supplier, while logistics ensures that these supplies arrive on time and in the correct condition.
51
How can costs be impacted by procurement and logistics?
Delays and inefficiencies in procurement and logistics can increase costs, such as damage or loss of products, affecting cash flow and production time.
52
What effect does reputation have on a business when it comes to procurement and logistics?
Poor quality materials or late deliveries can damage a business’s reputation, as customers rely on timely and reliable products. High-quality, reliable service helps build a good reputation.
53
How does customer satisfaction relate to procurement and logistics?
To maintain high customer satisfaction, businesses must ensure that the correct products are delivered to the right locations on time. This leads to repeat customers and higher sales.
54
Why is timely delivery important for both procurement and logistics?
Timely delivery ensures that production isn’t delayed, helping businesses maintain a steady cash flow and meet customer expectations, which can improve reputation and customer loyalty.
55
What is the main focus of quality control?
Quality control focuses on identifying and fixing faulty products by inspecting them at the end of the production process to ensure they meet high standards.
56
What is an example of quality control?
A factory inspector checks products at the end of production, such as ensuring cars have no visible flaws and that car mats are present before they are sent out.
57
How does quality assurance differ from quality control?
Quality assurance focuses on improving the production process and ensuring that quality is maintained at every stage of production, rather than only at the end.
58
Who is responsible for quality in quality assurance?
Quality assurance makes quality the responsibility of everyone involved in the production process, fostering a business culture where employees are accountable for producing high-quality products.
59
What is an example of quality assurance?
Employees are trained to identify faults early in production, and managers oversee the process, ensuring that quality is maintained at every stage of production.
60
What is a disadvantage of quality control?
Quality control can be expensive because faults are only found at the end of production, which may require more costly repairs, such as rebuilding the entire product.
61
How does quality assurance improve product quality?
By detecting faults earlier in the production process, quality assurance reduces the likelihood of substandard products reaching customers and ensures consistent product quality.
62
What is the key difference in responsibility between quality control and quality assurance?
In quality control, responsibility for quality typically falls to one individual or a specific team, while in quality assurance, all employees in the production process share responsibility for quality.
63
How does quality management contribute to competitive advantage?
Quality management helps businesses meet customer expectations, leading to high-quality products and services. This enhances reputation and brand image, providing a competitive edge.
64
Why is quality management important for businesses?
It helps businesses produce high-quality products and services, reduces waste, limits mistakes, and controls costs, ultimately improving efficiency and profitability.
65
How does quality control and quality assurance help reduce costs?
By ensuring things are done correctly the first time, quality control and assurance reduce wastage and prevent additional costs caused by mistakes, such as replacing damaged parts or materials.
66
How does producing high-quality products help businesses with cost control?
High-quality products reduce the need for costly repairs, replacements, or rework, which can lower overall production costs
67
How can high-quality products lead to competitive advantage?
By offering high-quality products, a business can create a strong brand image, build customer loyalty, and increase its market share, allowing it to charge premium prices.
68
What is one way businesses can gain competitive advantage through cost control?
By maintaining high quality while controlling costs, businesses can offer better value than competitors, enabling them to outcompete others in the market.
69
What role does a business culture play in achieving competitive advantage?
A business culture that motivates employees to care about quality, customers, and reputation leads to higher-quality products and better customer satisfaction, enhancing competitive advantage.
70
How does customer interest impact the sales process?
Businesses attract potential customers through strategies like emotive advertising and good product knowledge from employees, which encourages customers to engage and make purchases.
71
What are the five key stages of the sales process?
The five stages are customer interest, speed and efficiency of service, customer engagement, post-sales service, and customer loyalty.
72
Why is product knowledge important in the sales process?
Good product knowledge helps employees guide customers effectively, improving customer satisfaction and adding value, especially when selling technical or expensive products.
73
What are the two types of sales approaches used to develop customer interest?
The hard approach (actively seeking and advising customers) and the soft approach (letting customers browse while being available for assistance).
74
How does speed and efficiency of service contribute to good customer service?
Delivering products quickly and ensuring that the service is efficient enhances customer satisfaction and can justify higher prices, improving the overall customer experience.
75
What is customer engagement and how is it achieved?
Customer engagement involves interactions between the business and customers. It can be enhanced through social media, relationship-building (e.g., buying a car), and staying involved with customers through updates and promotions.
76
What is the role of post-sales service in the customer journey?
Post-sales service ensures customer satisfaction after a purchase by providing support, addressing complaints, and gathering feedback to improve the overall experience.
77
How does customer loyalty impact businesses?
Customers who receive excellent service are more likely to return, resulting in repeat business. Retaining loyal customers is often more cost-effective than acquiring new ones.
78
How can feedback be used to improve customer service?
: Businesses collect feedback through methods like questionnaires or social media, allowing them to address issues quickly and improve customer satisfaction.
79
What factors contribute to good customer service?
Knowledgeable, helpful, and friendly staff; meeting legal requirements; quick delivery; efficient service; excellent post-sales service and support; good product availability.
80
Why is good customer service important for a business?
It leads to customer satisfaction, increasing the likelihood of repeat purchases and customer loyalty, which helps build a good reputation and positive brand image.
81
What is differentiation in a business context?
Differentiation is the process of making a product or service stand out from the competition to appeal to a particular target market.
82
How does excellent customer service help a business gain a competitive advantage?
By differentiating the product or service, businesses can charge a premium price, attract more customers, and encourage repeat purchases.

Business Studies (10 decks)

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