Operations

Question 1

Factors to consider when choosing a supplier (7)

Answer 1

• Price
• Quality
• Quantity
• Location
• Lead Time
• Reliability and Reputation
• Discounts available and Credit terms

Question 2

What’s does price mean in the purchasing mix

Answer 2

the lowest price for the quality desired should be sought to ensure value for money

Question 3

What’s does quality mean in the purchasing mix

Answer 3

Consideration should be given to the quality of the raw materials on offer from each supplier. Is the quality of a satisfactory standard?

Question 4

What’s does quantity mean in the purchasing mix

Answer 4

Any potential supplier of raw materials must be able to meet the quantity required for the operations department

Question 5

What’s does location mean in the purchasing mix

Answer 5

If the supplier is not close by there could be expensive delivery charges

Question 6

What’s does lead time mean in the purchasing mix

Answer 6

How long it will take suppliers to deliver the goods ordered

Question 7

What’s does Reliability and Reputation mean in the purchasing mix

Answer 7

Potential suppliers must be dependable, respectable, likely to stay in business and have reliable delivery systems in place

Question 8

What’s does Discounts available and credit terms mean in the purchasing mix

Answer 8

Should be requested for good custom and bulk buying. Suppliers may allow the business to have credit where they can take the good immediately and then pay them at a later date.

Question 9

The cost and risks of overstocking (7)

Answer 9

• High storage costs
• High security costs
• High insurance costs
• Large amount of warehouse space could be required for storage
• Money is tied up in inventory which could be used elsewhere in business
• Inventory could be deteriorate, become obsolete or spoiled before it is used in production or sold to customers
• There is a danger of theft from employees

Question 10

Cost and Risk of Understocking (3)

Answer 10

• A business may not be able to cope with an unexpected order from the customers if the inventory is low
• After the library, if the delivery and try of the new inventory is delayed the business could run out of inventory and production may have to stop
• Hold low amounts of inventory means firms have to place orders more often
• A firm may gain a bad reputation it cannot satisfied customer demands

Question 11

Job production

Answer 11

Job production is where a single product is made from start to finish before another one is made

Question 12

Batch production

Answer 12

Batch production is where a group of identical products go through each stage of production at the same time

Question 13

Flow production

Answer 13

Flow production is a process in which the production of items moves continuously from one operation to the next

Question 14

Quality control

Answer 14

A manufacturer checks the final product at the end of production

Question 15

Benefits of flow production (3)

Answer 15

• firms can produce one-off orders to exactly meet the customers needs
• high prices can usually be charged so high profits can be earned
• workers are more motivated as there is likely to be a variety of work and skills required

Question 16

Costs of flow production (3)

Answer 16

• expensive to hire highly skilled staff
• a wide variety of expensive tools, equipment and machines may be required
• one-off orders may take several months to complete, from the order being placed to delivery to the customer

Question 17

Benefits of batch production (3)

Answer 17

• all products in the batch are identical and so there should be no quality differences
• there is a reduced need for high skilled and costly staff as work is broken down into simple stages
• machinery and robots can be used to complete a lot of the production which may reduce cost in the long run.

Question 18

Benefits of batch production (3)