Making operational decisions Flashcards
What is operations?
the business function that organises, produces and delivers goods and services
What does the production process involve?
using its resources to produce goods and provide services that customers can buy
What are some examples of resources?
- raw materials
- finance
- skills
- knowledge
What are the six stages of an operation?
- design
- manufacturing
- assembly
- test
- control
- delivery
What are the three production methods?
- job production
- batch production
- flow production
What does the choice of production method depend on?
the nature of the product and the level of production
Job production
- one-off/bespoke products
- focuses on customer needs and individual service
- specialist skilled workforce ( ^ prices )
- high profit margins
- longer production process
Batch production
- larger volume of products than job production
- some flexibility
- semi-skilled workforce
- some levels of automation
- productivity reduced when switching batches
Flow production
- high volumes and low margins (with high productivity)
- standardised production
- low skilled workforce
- highly automated process
- setting up is expensive
- machine costs
What are some examples of technology used in business’s production process?
- computer aided design (CAD)
- supply chain management (SCM)
- geographical positioning systems (GPS)
- electronic point of sales (EPoS)
- 3d printing
- e-commerce
What are the positive impacts of technology on operations?
- speeds up the production process
- keeps businesses in touch with their customers
- lowered production costs
- fewer mistakes and defects
What are the negative impacts of technology on operations?
- costly initial investment
- can quickly become obsolete
- requires specific training in tech for employees
What is economies of scale?
where the average costs of production fall as the volume of production increases
What is productivity?
output per worker
Increasing productivity leads to . .
greater competitiveness in a market
How can productivity be improved?
- increasing output
- lowering costs of production (inputs) while maintaining output
What are four factors affecting choice of technology?
- productivity
- cost
- flexibility
- quality
What is the maximum stock level?
the most stock a business can hold
What is the re-order level?
the level of stock at which new stock will be ordered by the business
What is buffer stock (minimum stock level)?
lowest amount of stock the business will hold
safety net in case of a surge in demand
What is just in time stock control?
where stock is delivered only when needed by the production system
In order for JIT to work, a business must have . . .
- good relationships with suppliers
- a well organised production system
- regular demand for their products
What are the benefits of holding stock?
- unpredicted surges in demand can be met
- damaged goods can be replaced
- discounts on bulk buying
- economies of scale
- limited risk of problems supplying customer demand
What are the benefits of holding little to no stock?
- warehouse cost saving
- less chance of damaged or stolen stock
- target employee focus on other tasks
- reduce costs of production (competitive product pricing)
What impacts do suppliers have on a business?
- costs
- flexibility
- reliability
- customer relations
What makes a good supplier?
- value for money on products and delivery
- flexibility
- reliability
- discounts on large orders
- high-quality supplies
- short lead times (availability)
What are the two ways of achieving good quality in a business?
- quality control
- quality assurance
Quality control is seen as . . .
one part of the chain of production
Quality assurance involves . . .
focusing on quality at every stage of the production process
What are the benefits of good quality?
- premium charge prices
- strong brand image
- meeting customer needs
- provide a competitive advantage
- differentiating a product
- less waste and defects
A quality control system requires a business to:
- quality as the focus and responsibility
- involve stakeholders at the design stage
- aim for zero defects
- meet quality standards
- quality as the business’s culture
Good customer service leads to:
- satisfied and loyal customers
- positive brand image and reputation
- differentiated products with a competitive advantage
- increased sales and repeat purchases
Poor customer service leads to:
- poor customer satisfaction
- low customer loyalty
- poor brand image
- inability to differentiate products
- falling sales and repeat purchases
What are the stages of the sales process?
- customer interest
- speed and efficiency of service
- customer engagement
- post-sales service
- customer loyalty
Depending on the product or service being sold the business may need to consider:
- the product knowledge of sales and staff
- speed and efficiency of service
- customer engagement with products
- response to customer feedback
- post-sales service provided
