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Business Management > Operations > Flashcards

Operations Flashcards

1
Q

What is meant by input?

A

The raw materials and resources required to make a product.

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2
Q

What is an example of an input in baking a cake?

A

Eggs, flour, sugar

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3
Q

What is meant by process?

A

What happens to make the input a finished product

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4
Q

What is an example of a process in baking a cake?

A

Measuring, mixing, baking

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5
Q

What is meant by output?

A

The finished product/service

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6
Q

What is an example of an output from baking a cake?

A

The finished cake

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7
Q

What does the operations department do?

A

The operations department is responsible for manufacturing products

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8
Q

What is the operations department main duties?(4)

A

-Producing the goods or providing the services required on time

-purchasing the raw materials required to manufacture goods/provide a service

-ensuring that supplies of raw materials do not ‘run out’

-managing the operations workforce

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9
Q

What are the factors to consider when choosing a supplier?(7)

A

-Cost of raw materials
-Discounts and trade credit
-Location of the supplier
-Lead time
-Quality of raw materials
-Reputation and reliability
-Quantity of raw materials

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10
Q

Why do you have to consider the cost of raw materials when choosing a supplier?

A

A higher cost of raw materials will lead to a higher cost of production. If an organisation found a cheaper supplier they could sell their products for a lower price.

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11
Q

Why do you have to consider discounts and trade credit when choosing a supplier?

A

Discounts for regular orders make the cost of raw materials cheaper which lowers the cost of production.

Trade credit allows the business a period of time without having to pay for purchases, which can help with cash flow.

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12
Q

Why do you have to consider the location of the supplier when choosing a supplier?

A

The further way the supplier is, the longer the raw materials will take to arrive and the cost of transportation ma be more expensive.

If the product being supplied is perishable it would be better to source a supplier close to your business as they will be able to deliver the goods quickly.

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13
Q

Why do you have to consider lead time when choosing a supplier?

A

Some companies will require stock to be delivered quickly especially if the products are perishable e.g. fresh food.
If raw materials are not delivered on time production may have to stop

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14
Q

What is lead time?

A

Lead time is the amount of time taken between an order for stock being placed and an order being received.

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15
Q

Why do you have to consider the quality of materials when choosing a supplier?

A

It is important to source supplies of a high standard or it may affect your finished product and therefore your customer satisfaction.

Poor quality raw materials can increase wastage in production.

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16
Q

Why do you have to consider the reputation and reliability when choosing a supplier?

A

Suppliers that have a good reputation and can be relied upon to deliver goods on time will get more customers.
If a supplier does not deliver at the agreed time, or with the correct goods, this can affect a business’s ability to produce and deliver their product to the customer.

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17
Q

Why do you have to consider the quantity of raw materials when choosing a supplier?

A

If the supplier can deliver the correct quantity on time. This will allow the business to fulfil customer orders.

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18
Q

What are the costs of understocking?(4)

A

-Production can stop if the business runs out of supplies, which can lead to poor customer satisfaction

-Miss out on bulk buying discounts

-Increase in delivery and admin costs because they have to order stock more frequently

-Unexpected customer order cannot be met

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19
Q

What are the consequences of overstocking?(4)

A
  • Supplies can go out of date or fashion before they can sell all the stock. This means the business may have to do a sale in order to clear the stock

-Risk of theft: if the business has lots of stock they will need to keep it in a warehouse which may get broken into or staff could steal from

-It is expensive to store stock. The business has to pay for a large warehouse as well as having to pay for security systems to keep it safe e.g. CCTV, security guard

-Cash flow problems: if a business buys too much stock they wont have cash available to pay for other expenses

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20
Q

Be able to draw and label and inventory control diagram.

A

Label

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21
Q

What is the maximum inventory control level?

A

the largest amount of items to be stored on site (500).

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22
Q

What is the minimum inventory level?

A

the lowest amount of items to be stored on site (100).

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23
Q

What is the re-order quantity?

A

the amount of stock ordered to restore inventory levels to their maximum point (400).

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24
Q

What is the re-order level?

A

the level of inventory at which new stock is ordered (300). 400 items are ordered and it takes two weeks lead time for ordered stock to arrive.

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25
Q

What is buffer stock?

A

Additional backup stock the business has stored in case of an emergency

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26
Q

What is manual stock control?

A

Usually in smaller businesses, stock checks are carried out manually by an employee (by a physical count) to provide figures for accounting purposes.

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27
Q

What is computerized stock control?

A

In larger businesses, each product will be given a barcode. When the barcode is scanned at the till (Electronic Point of Sale) this will update the stock records.
A business can automatically set a reorder level and see which products are selling quickly.

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28
Q

What are the advantages of computerised inventory control? (5)

A

-An automatic re-order level can be set so that the business does not run out of stock

-Reduces the need for stock-taking

-Can be linked to tills through EPOS which can automatically update stock levels

-Can highlight best sellers/slow sellers which will help managers make decisions on promotions

-Will avoid overstocking and understocking

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29
Q

What are the disadvantages of computerised inventory control? (2)

A

-Expensive to install and maintain

-If the system breaks down it can hold up orders

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30
Q

What is labour intensive production?

A

this is when production is mainly done by humans by hand

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31
Q

What are the advantages of labour intensive production? (4)

A

-Labour can be less expensive than capital as there is no high initial investment

-Humans can use initiative and creativity

-A higher price can be charged for handmade products

-Motivational for employees as they have a variety of tasks in their day

32
Q

What are the disadvantages of labour intensive production? (4)

A
  • High risk of human error producing waste

-Production time limited as humans need breaks

-Humans have to be paid overtime

-Recruitment, training and wage costs

33
Q

What is capital intensive production?

A

this is when machinery does most of the work in production.

34
Q

What are the advantages of capital intensive production? (4)

A

-Machines are more efficient and don’t need breaks or holidays

-Fewer mistakes and waste

-Robotics can do jobs too dangerous for humans

-Saves wage costs

35
Q

What are the disadvantages of capital intensive production? (4)

A

-Huge initial investment

-Breakdowns can halt production

-Demotivates existing employees

-Lack of personalisation

36
Q

What is job production?

A

When one product is made from start to finish before another one is made.
Job production is labour intensive producing handmade products by a skilled worker.

37
Q

What are some examples of products made from job production?

A

bridal outfit, designer kitchen, art

38
Q

What are some advantages of job production? (3)

A

-Products can be customised for customers one off orders and needs which increases customer satisfaction

-High prices can be charged

-Workers are more motivated as there is a variety of work and skills

39
Q

What are some disadvantages of job production? (3)

A

-Expensive to hire highly skilled staff or specialist tools

-Slower production rate as one off orders can take months

-Risk of human error can lead to waste

40
Q

What is batch production?

A

when a group of identical products are made at one time.
All the products in the batch move on to the next stage of production. This is both capital and labour intensive.

41
Q

What are the advantages of batch production?

A

-All products in a batch are identical so there should be no quality differences

-Skilled staff not requires as tasks are broken down to repetitive stages which saves costs

-Batches can be customised to meet customer requirements which increases customer satisfaction

42
Q

What are the disadvantages of batch production?

A

-Repetition of tasks can demotivate staff

-A mistake in one item can cause the whole catch to be wasted

-Workers and machines may be idle between batches if there is a fall in demand

-Machinery must be wiped down and cleaned in between batches which is time consuming

43
Q

What is flow production?

A

when parts are added to a product as it moves along a production line until the final product is completed.
This often resembles an assembly line. This is capital intensive. Usually made in large quantities.

44
Q

What are the advantages of flow production? (4)

A

-Huge quantities can be produced which can make products cheaper for consumers

-Machines can work 24/7 without breaks so faster production

-Reduces human error which leads to fewer complaints and wastage

-Raw materials can be bought in bulk so the business can benefit from economies of scale

45
Q

What are the disadvantages of flow production? (4)

A

-Machinery is expensive and must be maintained

-Individual customer requirements can’t be met so customers may not pay a premium

-Workers find jobs repetitive and are demotivated

-If machines break down production halts which leads to unhappy customers

46
Q

What factors should be considered when choosing methods of production? (10)

A

-The actual product being made - can it be made by hand?

-The quantity of the product to be made - higher quantity would require batch or flow

-The required quality of the finished product

-An individual product made to order or standardised

-The number of customers wanting to buy the product.

-The availability and skills of labour.
If there is cheap labour in an area.

-The availability oftechnology/machinery.

-The cost of technology/machinery.

-The finance available - if this is limited job may be better

-The size of the premises - larger premises required for flow

47
Q

What is quality control?

A

Products are inspected at the start and the end of the production process. Any product not meeting the standards of quality set by the business will be:
sent for rework
discarded completely

48
Q

What are the advantages of quality control? (2)

A

Ensures customers don’t get faulty goods
Limits potential for bad reputation

49
Q

What are the disadvantages of quality control? (2)

A

Can create lots of waste as products are not checked until the end of production
Products have to be reworked from scratch which costs time and money

50
Q

What is quality assurance?

A

Quality is built into the production process. All staff check all items at all stages of the production process for faults. This aims to prevent the faulty product from being produced.

51
Q

What are the advantages of quality assurance? (1)

A

Less wastage as errors spotted quickly

52
Q

What are the disadvantages of quality assurance? (2)

A

Can slow down production as many processes are inspected
Increase cost of wages (QA manager)

53
Q

What is a quality circle?

A

A quality circle is when a small group of workers from different levels in the organisation e.g. managers and assembly line workers come together to discuss and solve problems in production.

54
Q

What are the advantages of quality circles? (2)

A

Employees involved in quality circles may become more motivated as they feel valued within the company

Employees who are doing the job often have a better idea on how to improve processes

55
Q

What are the disadvantages of quality circles?(1)

A

Production time lost when employees meet

56
Q

What is benchmarking?

A

Benchmarking involves the business comparing their practices to the best practice in the industry. The business will then try to imitate the practices of their competitor.

57
Q

What are the advantages of benchmarking?(2)

A

The product will be as good as the best on the market
Saves the business time developing their own approach to quality

58
Q

What are the disadvantages of benchmarking?(2)

A

It can be difficult gaining information about other organisations quality methods
The business will only ever be as good as the benchmark at the time

59
Q

What is quality management?

A

Quality management is when the whole business is committed to quality and every product is made perfectly each time. This takes into account a variety of methods.
(Total) quality management believes in getting it right first time and having zero defects.

60
Q

What are the advantages of quality management? (3)

A

Zero errors so no waste

Staff are motivated as they are working together to achieve quality

Products known to be best quality- good reputation

61
Q

What are the disadvantages of quality management? (3)

A

Substantial staff training- increase in costs
Requires commitment of all staff- stricter selection process
Time consuming to continually review processes

62
Q

What are some quality inputs?(3)

A

Using quality raw materials in production e.g. organic food
Hiring highly skilled staff
Using up to date technology in production & maintaining it
These offer the best opportunity for the final product to be good quality.

63
Q

What are some advantages of being environmentally responsible?(4)

A

Looking after the environment helps sustain the businesses future
Positive reputation
Awards can be granted (use in promotion)
Renewable energies save costs in the long run

64
Q

What are some disadvantages of being environmentally responsible?(3)

A

Investment is expensive e.g. Solar panels
Time consuming to implement new
procedures
Rely on natural environment which may not be sufficient e.g. wind.

65
Q

How can a business be environmentally friendly? (4)

A

Reduce their carbon footprint- This means using renewable energy e.g. solar panels and electric vehicles

Sustainable raw materials- This means using local suppliers and replanting or recycling

Minimise waste-
Segregate waste appropriately and do not overstock

Minimise packaging -Only use the necessary packaging to maintain quality. Packaging should be reusable, recyclable and biodegradable

66
Q

What are some advantages of a business producing ethically?(5)

A

-Businesses can be given awards for being ethical (use this in promotion to attract customers who value ethics)
-This can attract customers who agree with their principles
-Can attract and motivate staff who value the company’s morals
-Gives the business a good reputation
-Can increase awareness of the brand

67
Q

What are some disadvantages of a business producing ethically? (3)

A

-Decision making is much more complex for businesses: they may not be able to just choose the cheapest supplier
-Standards have to be maintained which can put pressure on the business and lead to bad press if not
-Higher costs: labour, sourcing locally

68
Q

How does the operations department use ICT to increase efficiently? (5)

A

-Robotics
-CAD
-CAM
-Stock control programmes
-Automation

69
Q

What are the advantages of using robotics?

A

Speed, accuracy and efficiency
Reliable quality and less wastage
Handle boring, repetitive and dangerous tasks
Cheaper in the long run due to the quantity of products they produce and reduce cost of wages

70
Q

What are the disadvantages of using robotics?

A

High upfront cost
Demotivates staff who’s jobs are replaced by technology

71
Q

Where are robotics used?

A

In manufacturing and factories

72
Q

How are stock control systems used?

A

used to monitor the quantity, location and status of stock

Stock control systems are also used to automate the sales ordering process e.g. update stock levels on the website

73
Q

How does the operations department use capital technology to increase efficiency? (7)

A

databases-Store information about supplier details

internet-Research supplier prices

e-mail-Purchase supplies quickly

-barcodes and QR codes Can be used to aid the delivery process.
Customers and businesses can use QR codes to track packages.
Can be used to aid stock control as part of an EPOS system.

robotics-Can be used in production to reduce labour costs/ dangerous environments

electronic point of sale (EPOS)-Used with computerised inventory control to automatically reorder low stock

Metal detector-A way to ensure no metal has ended up in the final product. Especially used in the food industry.

74
Q

What is CAD and what is it used for?

A

Computer-aided design (CAD) is when a computer system is used to create or modify a design

75
Q

What is CAM and what is it used for?

A

Computer-aided manufacturing (CAM) uses machines that are controlled by computers in the manufacturing process.

76
Q

What are the advantages and disadvantages of using CAM?

A

This will reduce the risk of human error and ensures consistency across all products produced.

It allows the business to save on labour costs and operate 24/7.

CAM systems can be expensive and production is reliant on the technology not breaking down

Business Management (7 decks)

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