Operations Flashcards
Factors influencing choice of supplier
Price- cheap supplier,offers discounts, bulk buying discounts
Quality- good standard as products could be returned by customers which gives firm bad reputation
Technology- if firm doesnt have up to date technology then large firm may overlook this supplier
After sales service- a supplier that is professional and answers the customers problems quickly and efficiently
Reliability- a supplier that delivers goods on time, to the correct factory, with the correct quantity.
If supplier is late then then a production line may have to be stopped which holds back sales and reduces firms products
Location- its essential for supplier to be near the firm and firm will avoid high delivery costs
Location of firm
Customers- firms like to be near their customers to encourage them to be loyal which means the firm can max sales
Access to raw material- next to source of produce this allows companies freeze the products soon after harvesting
Cheap land and vast area- cheaper as it is away from tye city centre and its easier for the firm to expand
Near good infrastructure- cars to park & customers to get access
Problems with overstocking
The firm has to store the stock somewhere which will cost the firm money in terms of air conditioning, lighting
Easy for an employee to steal the stock
The unsold stock will have to be lowered in price and will fail to max profit
problems with understockinb
Have to turn away customers which means firm gets bad reputation
The firm is buying in small quantities which means missing out on bulk buying discounts
The firm has to recalibrate a machine which means it costs the firm time and money
Job production
The production of a single product. It requires a lot of skilled staff and very expensive to produce
Batch production
The production of a group of products one batch is made before passed on to the next stage of the production line
Flow production
Where products are made continuously. It’s expensive to stop the production lines as there so many stages involved
Job advantages
High price which max profit cayse its unique
Customer satisfaction is high
Work is interesting so staff are motivated
Job disadvantages
Labour is expensive to hire as highly skilled
Materiales are expensive to buy as they arent bought in bulk
High wastage costs
Batch advantages
A variety of the products is produced which appeals different customers segments
Some bulk buying is possible
Batch disadvantages
Stock can build up between processes
Takes time to switch from one process to another
Due to use of machinery,ore space is needed
Flow advantages
A high volume of products is produced so sales high
Labour costs are cheap
Opportunities to bulk buy materials so costs lowered
Flow disadvantages
Expensive to set up
Staff can be bored
Product s highly standardised so little variety
Quality assurance
Checks the quality at each stage
Quality control
Checks the quality of the finished product
