Management of Operations

Question 1

Negatives of overstocking

Answer 1

• supplies go out of date
• capital tied up in stock
• increases costs eg. storage
• increased costs of security

Question 2

Negatives of understocking

Answer 2

• Not enough stock for production
• No bulk buying discount
• Customers go elsewhere if no stock
• Increased admin costs as need to order more often

Question 3

ADV of Just in time?

Answer 3

+ capital isn’t tied up in stock
+ less space needed
+ less wastage as things don’t go out of date

Question 4

DISAD of JIT?

Answer 4

• High dependence on suppliers
• May lose bulk buying discounts
• Higher transport costs as more regular deliveries

Question 5

Centralised Storage?

Answer 5

All stock in one place

Question 6

ADV of centralised stocking

Answer 6

Less chance of theft
Reduces duplication of orders

Question 7

DISAD of centralised stocking?

Answer 7

Expensive to set up
More stock = More wastage

Question 8

Decentralised Storage?

Answer 8

Stock in several locations

Question 9

ADV of decentralised stocking

Answer 9

more easy to access
less chance of stock going to waste

Question 10

DISAD of decentralised stocking

Answer 10

More building need to be bought in several locations
Higher chance of theft

Question 11

CAM?

Answer 11

Computer automated machinery

Question 12

EPOS?

Answer 12

Electronic Point of Sale
Automatic Up to Date Figures on stock

Question 13

Types of production

Answer 13

Job
Batch
Flow

Question 14

Job Production?

Answer 14

Production made product by product
Often personalised products
Time consuming

Question 15

Batch production?

Answer 15

• Products made in batch eg. cakes
• Whole batch completes stage then moves onto the next

Question 16

Flow Production?

Answer 16

Used on car production lines eg. bonnet, wheels, windows
Each stage leads to completion of final product

Question 17

ADV/ DISAD of flow production?

Answer 17

+ machinery can be used which reduces cost
+ large quantities can be produced
- little to no variation

Question 18

Labour Intensive Production

Answer 18

Production done by workers

Question 19

DISAD of labour intensive production?

Answer 19

skilled workforce can be expensive
only small scale production is possible

Question 20

Capital Intensive Production

Answer 20

Production done by machines

Question 21

DISAD of capital intensive production

Answer 21

• expensive to set up
• any breakdowns can be costly due to loss of production

Question 22

Quality Control?

Answer 22

When a product is finished it is checked by supervisors to ensure it is up to a high standard

Question 23

ADV/ DISAD of quality control

Answer 23

+ ensures poor quality product isn’t sold to customers
+ reduces complaints/ products being returned
- only happens at end of production meaning wastage if not good enough

Question 24

Mystery Shopper

Answer 24

Employing someone to go undercover and report back on the running of the business

Question 25

ADV/ DISAD of mystery shopper

Answer 25

+ Impartiality - no bias
+ Improvements can be made to service
- Staff may take feedback personally
- Increases cost, mystery shop needs to be paid wages

Question 26

Technology in operations?

Answer 26

• EPOS - automatic updates on stock
• Can be used to advertise product
• Can be used to research and develop product
• Email can be used to confirm orders

Question 27

ADV/ DISAD of operating ethically

Answer 27

+ increased sales as ethically motivated customers
+ improved reputation
+ employees will want to work for ethical business
- Increased costs

Question 28

ADV/ DISAD of fair trade

Answer 28

+ good public image
+ good employer- attract staff
- increased cost of materials

Question 29

egs of ethical issues

Answer 29

• child labour
• poor working conditions
• not meeting minimum pay laws
• use of sweatshops

Question 30

Benchmarking?

Answer 30

comparing product to market leaders to ensure product will be able to compete

Question 31

Quality Circles?

Answer 31

Group meetings to assess performance

Question 32

Appraisal?

Answer 32

One to one meetings to assess performance