Operations Flashcards
Stock management is..?
The system to control the quality of stock held by a business
meet customer orders
maintain production
avoid waste capital on unused/unwanted stock
What does the maximum stock level show?
Most amount of stock held on site
What does the minimum stock level show?
Least amount of stock held on site.
What does the contingency zone show?
Stock available for unexpected orders
What does the re-order level show?
Stock level when an order is sent to the supplier.
What is the re-order quantity?
amount of stock ordered to get stock back to minimum
What is lead time?
time taken for supplier to deliver an order
Consequences of having too little stock
(Under stocking)
-Production slows down/stops
-Orders aren’t fulfilled on time
-Not being able to accept unexpected orders
-Inventory deteriorating- waste
- Increased storage and insurance costs- less profit
-Easier for staff to steal inventory
Factors to consider when choosing a supplier?
- Reliability
-Location
-Quality
-Reputation
-Cost
-Ability to meet unexpected requests
Job Production is..?
One off unique products
made individual to customers
One product will be started and completed before work on the next product
Usually made by hand
Involves highly skilled workers
Example of Job production is (3)
Hairdresser
Dress maker
Cake decorator
Advantages of Job production (4)
+Products are fully bespoke
+High prices can be charged
+boosts business’ reputation
+Satisfied customers
Disadvantages of Job production
(4)
-Workers are payed more
-lead time is slow
-If a mistake is made the product is lost and cost is higher
-Cannot buy in bulk so then miss out on discounts
Batch Production is..?
Making products in small groups
Products within each batch will be identical
Each batch can be different
Products within a batch all go through the same stages of production.
Example of Batch production?
A bakery making a range of cakes and breads