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A level business > Operations > Flashcards

Operations Flashcards

1
Q

operational objectives

A
  • quality
  • costs
  • efficiency
  • innovation
  • environment
  • speed of response
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2
Q

internal factors influences operational objectives

A
  • nature of product - tech products have a focus on innovation
  • avaliability of resources- increasing output requires capacity
  • other departments- finance, marketing, HR
  • overall objectives- if business is very environmentally friendly this must be considered
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3
Q

external influences on operational objectives

A
  • competitors performance
  • market conditions
  • demand for product- flexibility of production to ensure output doesn’t go over demand
  • changing customer needs
  • new technology
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4
Q

Added value

A

sales revenue – cost of Brought in goods and services

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5
Q

Capacity utilisation formula

A

(current output/max capacity) x 100

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6
Q

effects of high capacity over 90

A
  • decline in quality
  • potentially need to turn away customers
  • NO downtime = machines are on ALL the time
  • NO margin of error
  • can’t temporarily increase capacity , to deal with increase in demand
  • potential surplus stock if output is higher than demand
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7
Q

How to increase capacity

A

operating more and for longer

  • buying more machines
  • increase staff levels
  • increase productivity
  • if demand increase is temporary they could sub-contract employees
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8
Q

Effects of low capacity utilisation

A
  • increase costs/ unit costs

-

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9
Q

Dealing with under- utilisations (low capacity)

A
  • aim to increase demand = changing marketing mix
  • subcontracting work for other firms
  • reduce capacity by closing down stores
  • reducing overtime, allocating staff to work for other businesses, not renewing temporary contracts (SHORT TERM)
  • redundancy, selling off equipment (LONG TERM)
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10
Q

Labour productivity calculation

A

output during period/ number of employees

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10
Q

How to increase labour productivity

A
  • improving employee motivation
  • training
  • new technology
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11
Q

Lean production

A

keeping waste to a minimum

  • save business costs
  • can allow businesses to meet objectives like reducing costs, being environmentally friendly etc
  • JIT, time- based management, Kaizen
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12
Q

JIT

A

holding little stock, all orders are made just in time for when customers order them

  • lower storage costs
  • improved cash flow, less money tied up in stock
  • customers cannot be supplied during production strike
  • supplier HAVE to be reliable
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13
Q

Time- base management

A

reducing wasted time within the businesses production process.

  • allows companies to compete on time, by getting there products to the market quickest
  • depends on flexible production techniques
  • effective communication between manages and staff is essnential, NEED FOR CULTURE TRUST
  • staff need to be multi skilled- training is important.
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14
Q

Advantages and disadvantages of capital intensive business

A
  • cheaper than manual labour in the long term
  • machinery is often more precise = limits human error
  • machinery is able to work 24/7
    -machines are easier to manage than people
    HOWEVER
  • high set up costs
  • machines are inflexible
  • machines break downs take longer to fix
  • fear of workers being replaced by machines can lead to decreased employee motivation.
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15
Q

advantages and disadvantages of labour intensive production process

A
  • people are flexible and can be retained
  • cheaper for small- scale production
  • cheaper where low labour costs are available (China)
  • workers can solve any problems that arise during production and suggest ways to improve quality
    HOWEVER
  • its harder to manage people
  • people can be unreliable
  • people can’t work without breaks/holidays
  • wage increases mean increases in costs
    -labour costs as a percentage of turnover are high
16
Q

Quality control

A
  • assumes errors are unavoidable
  • detects error and puts them right
  • quality control inspectors check other peoples work and are responsible for quality
17
Q

Quality assurance

A
  • asumes you can avoid errors
  • prevents error and aims to get it right first time
  • employees check their own work. Workers are responsible for passing on good faulty work
18
Q

Affects/ Needs for quality assurance

A
  • empowering for employees therefore highly motivating
  • training is very important
  • ## workers must be motivated and committed
19
Q

Total quality management

A 
Meaning the whole workforce is committed to quality improvements 
Adv:
- helps build team morale
- boosts company reputation 
- fewer faulty products being made 
Disadv: 
- time consuming 
- can demotivate staff 
- usually expensive to introduce (Training)
20
Q

Quality circles

A

Groups that meet regularly to discuss quality control issues

  • knowledge of employees from various departments
  • great way to get staff involved and improve motivation and productivity
  • however suggestions can sometimes be unrealistic and management may not listen
21
Q

Kaizen

A

Lean production method, employees should be improving their work slightly all the time

  • employees have some control over decision making
  • helps workers feel involved in quality assurance
  • cheap to introduce
  • not great when businesses are need of urgent improvements to quality
  • firm needs to be committed to methods in the long term
22
Q

Disadvantages of holding stock

A
  • high storage costs
  • wastage costs (perishable goods )
  • opportunity costs - business could potentially invest the capital they have tied up in stock
23
Q

Stock control element s

A

Lead time - the time it takes to receive goods after ordering them from supplier
buffer stock - the stock a business needs to have when they re-order to prevent them running out
Re-order quantity- the amount the company orders from supplier

24
Q

Peripheral workers

A

employees who aren’t essential to a business but that the business empties when they need more staff.
Allow businesses to meet demand
keeps fixed costs low.

25
Q

Outsourcing (demand)

A

when businesses contract out some activities to other businesses
can allow businesses to accept contracts they would otherwise turn down
- can allow a business to benefit from specialised knowledge
- can keep fixed costs low
however
- outsourcing means the business doesn’t have control over the quality of the work = may have a negative effect on the businesses reputation

26
Q

Impacts of good supplier relationship

A
  • improve operational performance
  • productivity will increase
  • cause costs to fall and so profit increase
  • allows businesses to meet customer expectations
  • Linked networks = allowing both supplier and business to have access to inventory levels can improve efficiency cost costs and improve customer relations
  • companies who work closely with supplier can share new ideas and ultimately save money on innovative ventures
27
Q

Ways to improve supply chain

A
  • only buy supplies that the business needs
  • understanding the different between strategic (essential goods and services to the business) and non-strategic(non essentials/low value stationary) suppliers
  • limit the number of suppliers they have to be more costs effective HOWEVER can be risky to have 1 supplier if their are issues with sed supplier
  • having alternative supply source

A level business (21 decks)

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