operations

Question 1

describe factors of purchasing mix

Answer 1

cost of raw materials - the price charged by suppliers to purchase raw materials
quality of raw materials - how good the raw materials are
lead time - how long it takes to receive the raw materials from when an order is placed
quantity of raw materials - how much raw materials are required
location of supplier - where the supplier is located eg which town or city and how far away it is
reliability and reputation of the supplier - reliability - will the supplier deliver when they say they will? reputation - what people think of the supplier
storage space available - how much space the business has in a warehouse to hold the raw materials until they are needed.

Question 2

consequences of over stocking

Answer 2

high costs of storage
high insurance costs
high security costs
the business will have a lot of money tied up in stock
stock may go out of fashion and have to be thrown away
stock may deteriorate

Question 3

consequences of under stocking

Answer 3

• business may run out of stock to sell
• unexpected changes in demand are hard to deal with
• if orders are delayed, shelves may be left empty
• if customer can’t get the stock they want, they may go elsewhere
• high administration costs caused by re-ordering stock all the time

Question 4

methods of production

Answer 4

job production - one at a time from start to finish before another is made. Usually handcrafted by skilled workers & little machinery
Batch production - making a specific number of identical products in a batch from start to finish before a new batch of a different product is made
flow production -