Management of operations Flashcards
What are the stages that involes the 3 stages
Input –> process –> output
Give 5 examples of the factors affecting the choice of supplier
Price, Quality, Quantity, location and Leadtime
Define price
The amount suppliers charges for raw materials
Define quality
The standard of raw materials sold by the suppliers
Define quantity
The volume/ amount of raw materials the supplier is able to provide
Define location
Where the supplier is situated in relation to your buissness
Define lead time
The time between ordering inventory from your supplier and and it arriving
What is understocking
When an organisation holds an insufficient amount of inventory to be able to carry out/ full fill orders
What are the consequences of understocking
unable to continue production
unable to accept an unexpected larger order
can increase administration costs
Explain overstocking
When an organisation holds more inventory than it can sell
consequences of overstocking
Goods may deteriorate before they are used or sold
goods could become obsolete
Higher storage / insurance and security costs
