Operations Flashcards
What is 5 cons of overstocking
Supplies go out if date
Supplies go out if fashion before sold
Staff theft
Firm has to pay for stockholding costs
Money can’t be used elsewhere as tied up in stock
4 cons of under stocking
Firm may run out of inventory and therefore production haulted or no sales made
Firm miss out on bulk buying discounts due to making small orders
May be no goods for firms to sell and customers will have to be turned away which gives firm a bad rep
Increased delivery charges since several small ones have to be made
What is JIT
When a firm orders supplies when they are required for production or an order by a customer is placed
4 pros of JIT
No money tied up in stock
No where house saves costs
No wastage
Firm more flexible to changing external factors
4 cons of JIT
if deliveres late firm understocked
Requires excellent relationship with suppliers to work effectively which can take a lot of time to develop
No room for errors in production
Supplier becomes responsible for taking care of stock
What is centralised storage
Involves all inventory being held in one large central located warehouse
4 pros of centralised storage
Specialist staff employed therefore more efficient and secure
Can get bulk buying discounts as can store such large orders
Easier to track stock
May be cheaper to have one larger warehouse than several small
Centralised storage 3 cons
Specialist staff means a higher wage bill
Specialist equipment needs to be bought and maintained
Long delivery times
What is decentralised store age
Involves inventory being stocked in small warehouses or store rooms
4 cons of decentralised
Theft may be higher as security not as good in smaller warehouses
Lack of specialist staff means inventory control can be inefficient
Stock harder to track
Smaller amounts of inventory in each warehouse may lead to undertsockimh
3 pros of decentralised
Short delivery times as warehouse always close
Smaller local warehouses more suited to local needs
Smaller amounts of inventory means no overstocking
What is job production
Production of a single specialised product
What’s batch production
Production of similar products in batches
What’s flow production
Production of products constantly
3 pros n 2 cons of job production
High price can be charged as product unique
High customer satisfaction
Quality often higher
Expensive labour costs
No bulk buying
Batch 2 pro 3 cons
Individual batches can be made to suit customer wants therefore satisfaction higher
Less skilled labour therefore higher wastage
Long time to clean machine and prepare for new batch
Staff demotivated as work is boring
Machinery needs more space and costs a lot more
Flow 3 pros 2 cons
Bulk buying opportunities
High output so firm can charge a low price therefore max their sales
Quality easier to control as product standardised
Expensive machinery required for production
Repetitive working therefore workers demotivated
What is capital intensive
Products mainly produced by machinery and equipment
What is the two types of capital intensive
Automation or mechanised
What is automation production
Fully automatic
Uses robots
4 positives of automation production
High consistency
CAM doesn’t loose focus so fewer mistakes
Robots can do dangerous jobs
Robots don’t need breaks or holidays
4 cons of automation
Huge investment needed to make automatic production line
Breakdowns can be catastrophic loosing hours of production time
Demotivated employees if robots replacing them
Absence of human touch means a lack of creativity
What is medhanastion production
Labour and machines working together in production
3 pros of mechanisation production
Using machinery decreases chance of human error
Use of machinery can speed up production
Creativity still there as human aspect still involved
3 cons of mechanisation production
Machines need humans to work them therefore human error still involved
Production can’t be 24/7 as humans need brakes and holidays
If machinery breaks down firm has to repair it and production has to be haulted
What is labour intensive production
Involves humans doing most the work
3 pros of labour intensive
Can be cheaper than capital intensive
Labour has more creativity than capital intensive
Employees motivation high for many reasons
3 cons of labour intensive
High risk of human error
Humans need time off which limits production
Recruitment training and wage costs are involved
5 reasons for a production choice
Quantity of goods requires
Skills of workforce
Cost of labour
Finance available
Technology available
What is being ethical
Showing consideration for others when making decisions
3 pros of being ethical
Awards available which can be used promotional
Being ethical may attract more customers
May attract quality staff
2 cons of being ethical
Firm needs to instill the values in all departments
Decision making may be time consuming and expensive when trying to be ethical
What is being enviromental friendly
Orgs doing their best to help the environment
2 pros of environmentally friendly
Good image
Awards can be gotten
2 cons of being environmentally friendly
Investments for environmental good will be expensive
Most environmental friendly procedures relly on weather conditions which isn’t guranTeed
Why might new staff be needed 2
To develop new products to satisfy demands
Assist in opening of new stores or factories
Steps in workforce planning
1) analysis potential demand for good or service and decides how many staff and what skills are needed
2)firm conducts a staffing forecast and highlights if staff are due to leave
3) firm analyse all its current staff to detrmine the need for new staff and skills that need devoted in existing staff
4) surplus staff then firm will cut down
Shortage means gaps will be filled
5) review process and make changes if necessary
