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Business > Operations > Flashcards

Operations Flashcards

1
Q

Why does price influence a firms choice of supplier?

A

As a firm would be looking for the supplier who is the cheapest out of their choice of supplier. They are also interested in a firm that offers discounts for large volume purchases

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2
Q

Why is credit terms a factor when deciding which supplier to go with?

A

As it interests a lot of firms. This is because this lets them pay at a later date. The supplier that offers more credit terms to a firm is making themselves look more attractive

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3
Q

Why is Quantity a factor when deciding on a supplier?

A

This is because the firm wants to know how good of a standard the suppliers products are. If they are it of a good standard then the goods would likely be returned to the firm by the customer

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4
Q

Why do you have to consider technology as a factor when deciding on a good supplier?

A

If a supplier does not have up-to-date technology then they will be overlooked by firms. The firm will look for another supplier who has better equipment than the other supplier

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5
Q

Why would after sales service be considered when choosing a supplier?

A

A firm will judge a supplier on the after sales service that they provide. This is because a firm is looking for a supplier that will answer their customers questions and queries about their product.

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6
Q

Why would you choose a supplier based on their reliability?

A

This is because a firm will look to see of the supplier delivers on time to their correct factory with the correct quantity. If a supplier is late then the production line will have to be stopped which holds back sales and reduces firms profit

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7
Q

Why would you consider the location of a supplier?

A

As a firm will need their supplier nearby. This is because firms such as a cafe will need to have their products freshly made and they cannot be transported by plane as the will start to go bad.

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8
Q

Why would you consider the size of the business for choosing a supplier?

A

This is because a large firm will need a large supplier. This is to produce the correct amount of products so that the firm won’t have low stock in their business.

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9
Q

What does it mean by management of stock?

A

The finished stock, the work-in-progress, or the delivery of raw materials.

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10
Q

What is overstocking?

A

When a firm has failed to sell all their products.

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11
Q

What is understocking?

A

When a firm runs out of stock and has to turn customers away

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12
Q

What are the problems associated with over stocking?

A

Firm is left with unsold stock. This means that it loses out on sales revenue as money is tied up in stock.
Firm has to stock somewhere else which will cost firm
Unsold stock would have to be lowered in price. This means that the firm will fail to maximise sales revenue
Having too much stock means that the staff can easily steal products

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13
Q

What are the problems associated with understocking?

A

Firm may have to turn away customers which makes the firms reputation look bad.
If stock is late then production line machines will have to be turned off. This causes money and time as the machines take many hours to restart
If firm runs out of stock then it will cost a lot of money to buy in new stock. Firm may be charged higher than usual as they want small quantity to be delivered quickly

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14
Q

What are the methods of production?

A

Job production, batch production and flow production

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15
Q

What is job production?

A

Production of one single product. One of a kind product ie a wedding dress. Requires a lot of skilled staff and a lot of expensive material

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16
Q

What is batch production?

A

Production of groups of products. This can be seen as a batch of rolls by a baker. One batch can be made with plain flour and another with whole meal flour.

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17
Q

What is flow production?

A

Products are made continuously without stopping production. Products produced 24/7, as it is expensive to stop production line as there is so many stages involved.

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18
Q

What are the advantages of job production?

A

High price can be charged which maximises profit
Customer satisfaction - high
Work - interested so motivated to work

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19
Q

What are the disadvantages of job production?

A

Labour expensive

Materials expensive as they are not bought in bulk

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20
Q

What are the advantages of batch production?

A

Variety of product produced which appeals to different customer segments
Bulk ordering possible

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21
Q

What are the disadvantages of batch production?

A

Stock can build up between processes

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22
Q

What are the advantages of flow production?

A

High volume of goods produced so sales high
Labour costs are cheap as expertise is not required
Opportunities for bulk buying materials so costs lowered and therefore profits high

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23
Q

What are the disadvantages of flow production?

A

Expensive to set up
Product highly standardised so little variety for customer
Staff can be bored

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24
Q

What is quality methods?

A

The ways of improving quality of products/services that firm produces/delivers

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25
Q

What are the ways in which a firm can improve quality?

A

Quality assurance, benchmarking, quality management, quality circles, quality raw materials, training

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26
Q

What is quality assurance?

A

Firm checks quality of product at each stage of production process

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27
Q

What is quality control?

A

Firm checks quality of finished product

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28
Q

What is benchmarking?

A

Firm will investigate “best in field” and aim to match standards of their product to market leader

29
Q

What is quality management?

A

Firm will aim to get all staff to improve quality of service of their products from minors to majors in receptionists to managing director

30
Q

What are quality circles?

A

Firm asks staff to volunteer to meet up in groups to discuss issues concerning the business. Leader is usually manager who takes notes and passes these notes to senior managers for their consideration

31
Q

What are the advantages of quality circles?

A

Management hear about problems/issues in business and so can be resolved quickly.
Workers flattered to be asked their opinions and so issues raised
Issues raised by workers are often relevant to successful running of firm and so meetings effective

32
Q

What are the disadvantages of quality circles?

A

Managers have to be trained on how to run quality circles which costs money
Ideas raised by workers should be responded to by management otherwise staff won’t take it seriously

33
Q

What are quality raw materials?

A

Firm can but best quality materials to ensure product produced is of the best quality

34
Q

What is training?

A

Training will raise standard of workers efforts which in turn will increase quality of product

35
Q

What are the overall benefits of introducing quality methods?

A

Mistakes minimised which saves firm money on getting rid of wastage
Firm gets good reputation for producing quality products which allows firm to raise price
Firm will gain more customers than competition if their product is seen as better quality
Customer less likely to return faulty products to firm which saves firm money

36
Q

What are the limitations of introducing quality to firm?

A

Workers taken away from work during initiatives
Introducing quality into form costs as staff have to employed to check quality
Cost of training to get workers familiar with systems
Better raw materials cost extra
Extra paperwork required to validate quality checks

37
Q

How would you minimise wastage?

A

Train workers so that they make the products in the correct way and avoid having to bin products that are damaged or faulty
Companies can use automation or machines to make goods. Machines cut down on waste. Machines are quite popular on production lines

38
Q

What can firms do to protect products?

A

Use good packaging, clear transportation fumes, cut down on transportation

39
Q

How can a firm reduce wastage?

A

Recycling

40
Q

Why is recycling important?

A

Rubbish can be bulldozed underground or burnt in an incinerator. These methods of getting rid of rubbish is not environmentally friendly. It can create toxic soil and can pollute water and kill fish

41
Q

Why should we recycle?

A

If everyone reduced, reused and recycled then we can make the earths resources go a lot further
It saves materials, cuts down on pollution and makes the environment much more attractive

42
Q

What are the different ways of recycling?

A 
Kitchen and garden waste 
Paper and catboats
Metal
Wood
Glass 
Oil
Plastics
43
Q

What is the main problem in recycling?

A

Plastics. They last a long time without breaking down. If in ocean then it can harm animals. It can attach onto Dolphins, eels, fish, baby sharks, penguins and seals.

44
Q

What are the costs of recycling?

A

Local council taxes may rise to pay for job of disposing of waste
Impact of single individual to recycle can outweigh benefits of simply placing this waste in one bin

45
Q

What are the benefits of recycling?

A

Fewer resources used
People develop conscience when consuming goods and so less waste is used
Pollution level drops which means cases of cancer fall and so there is reduced suffering

46
Q

Costs of recycling to firms

A

Resources used to pick up recycling bins which costs more money to firm
Firms may out prices higher to pay for job of disposing of waste

47
Q

Benefits of recycling to firm

A

Fewer resources used
Firm gets good reputation customers stay loyal
If firm gets popular name for recycling then they may stand better chance of getting government grant which saves money

48
Q

What is CAD?

A

Computer Aided Design
Products designed on computer before sent to production line to be manufactured
Errors are easily fixed on computer

49
Q

What is CAM?

A

Computer Aided Manufacture
After design is finished on CAD then it is sent to CAM.
CAM is where computers control operation of machine
Gives instructions to manufacture product

50
Q

What is AGV?

A

Automatic Guided Vehicles

Where vehicle transport stock around factory without human labour

51
Q

What is a Database?

A

Electronic filing system and will create file of all the parts to be used in process of manufacturing

52
Q

What are spreadsheets?

A

Used to cost a job

53
Q

What is the Internet?

A

Can be used to search for suppliers for parts

54
Q

What are the benefits of technology?

A

Human error removed which reduces mistakes
Technology lets product quality to be more consistent
Less labour needed and so costs saved
Firm avoids problems with staff ie sick days
More able to perform repetitive tasks

55
Q

What are the costs of technology?

A

Set up costs high
technology eg CAM cannot meet individual requirement
Technology in machines were to break down then production halted
Staff have to be trained to operate technology which costs money

56
Q

What is the Electronic Stock Control System?

A

It shows how much products a large firm sells a day

57
Q

What is the importance of setting the right levels?

A

Having minimum stock level ensures there is always stock for production
Having maximum stock level ensures money and storage space is not taken up unnecessarily therefore easing cash flow
Reorder stock level has to be set so that the organisation knows to reorder stock at this point so they do not run out
Reorder quantity should be set so that the stock level is brought back to the appropriate level once it is delivered

58
Q

Benefits of electronic stock control system

A

Human error removed which saves money
Automatic reordering system which means labour can be freed to up to do another task
Less stock stolen as it is easier to trackless chance of running out of stock

59
Q

Costs of electronic stock control system

A

Costs money to install equipment
Staff have to be trained to use equipment
Supplier delivery times can change
Many suppliers are too small t have such a complex stock control system

60
Q

What are the factors influencing a firms choice of supplier?

A

Price, Credit terms, Quality, technology, After service sales, reliability, location, size of business

61
Q

What is involved in the effective stock management?

A 
Maximum stock level
Minimum stock level
Reorder level
Reorder quantity 
Lead time 
Buffer stock
62
Q

What is maximum stock level

A

Level that you don’t want to go ABOVE otherwise you will incurr the cost associated with over stocking

63
Q

What is minimum stock level

A

Level that you don’t want to go BELOW otherwise you will incurr the cost associated with understocking

64
Q

What is the reorder level

A

Point that you get to, that you have to order more stock than your supplier

65
Q

What is the reorder quantity?

A

Amount you order from supplier

66
Q

What is lead time?

A

Time between ordering your stock and receiving your supplies

67
Q

What is buffer stock?

A

Quantity of stock that you hold between 0 and your minimum stock level

68
Q

What is rate of consumption?

A

Amount of stock you use on a daily basis

69
Q

What are the methods of distribution?

A

Rail, postal, online

Business (9 decks)

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