Management of Operations Flashcards
Negatives of overstocking
- supplies go out of date
- capital tied up in stock
- increases costs eg. storage
- increased costs of security
Negatives of understocking
- Not enough stock for production
- No bulk buying discount
- Customers go elsewhere if no stock
- Increased admin costs as need to order more often
ADV of Just in time?
+ capital isn’t tied up in stock
+ less space needed
+ less wastage as things don’t go out of date
DISAD of JIT?
- High dependence on suppliers
- May lose bulk buying discounts
- Higher transport costs as more regular deliveries
Centralised Storage?
All stock in one place
ADV of centralised stocking
Less chance of theft
Reduces duplication of orders
DISAD of centralised stocking?
Expensive to set up
More stock = More wastage
Decentralised Storage?
Stock in several locations
ADV of decentralised stocking
more easy to access
less chance of stock going to waste
DISAD of decentralised stocking
More building need to be bought in several locations
Higher chance of theft
CAM?
Computer automated machinery
EPOS?
Electronic Point of Sale
Automatic Up to Date Figures on stock
Types of production
Job
Batch
Flow
Job Production?
Production made product by product
Often personalised products
Time consuming
Batch production?
- Products made in batch eg. cakes
- Whole batch completes stage then moves onto the next
Flow Production?
Used on car production lines eg. bonnet, wheels, windows
Each stage leads to completion of final product
ADV/ DISAD of flow production?
+ machinery can be used which reduces cost
+ large quantities can be produced
- little to no variation
Labour Intensive Production
Production done by workers
DISAD of labour intensive production?
skilled workforce can be expensive
only small scale production is possible
Capital Intensive Production
Production done by machines
DISAD of capital intensive production
- expensive to set up
- any breakdowns can be costly due to loss of production
Quality Control?
When a product is finished it is checked by supervisors to ensure it is up to a high standard
ADV/ DISAD of quality control
+ 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
Mystery Shopper
Employing someone to go undercover and report back on the running of the business
ADV/ DISAD of mystery shopper
+ Impartiality - no bias
+ Improvements can be made to service
- Staff may take feedback personally
- Increases cost, mystery shop needs to be paid wages
Technology in operations?
- 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
ADV/ DISAD of operating ethically
+ increased sales as ethically motivated customers
+ improved reputation
+ employees will want to work for ethical business
- Increased costs
ADV/ DISAD of fair trade
+ good public image
+ good employer- attract staff
- increased cost of materials
egs of ethical issues
- child labour
- poor working conditions
- not meeting minimum pay laws
- use of sweatshops
Benchmarking?
comparing product to market leaders to ensure product will be able to compete
Quality Circles?
Group meetings to assess performance
Appraisal?
One to one meetings to assess performance
