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Business Management > Operations > Flashcards

Operations Flashcards

1
Q

Types of production

A

Job production,Batch production and flow/line production

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2
Q

Input, Process, Output

A

Input = Factors of Production (Materials, employees, machines, land)

Process = Job Production, Batch Production, Line Production

Output = Finished Product

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3
Q

Suppliers

A

Raw materials are the different items need to make somthing

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4
Q

Factor 1:

A

Cost of raw materials

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5
Q

What does this mean?

A

The price charged by a supplier to purchase raw materials

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6
Q

Why is this important?

A

> Costs need to be kept as low as possible to make a profit.

> Low costs will improve the cash flow of a business.

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7
Q

Factor 2:

A

Quality of raw materials

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8
Q

What does this mean?

A

How good the raw materials are.

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9
Q

Why is this important?

A

> Without high quality raw materials, the finished product will not be of a high quality.
Low quality raw materials will probably result in higher wastage.

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10
Q

Factor 3:

A

Lead time/delivery

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11
Q

What does this mean?

A

How long it will take to receive the raw materials from when an order is placed

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12
Q

Why is this important?

A

> Some raw materials need to be used quickly (eg fresh food) or they might go off.
Without raw materials being delivered on time, production might have to go on stop, which is costly.

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13
Q

Factor 4:

A

Quantity of raw materials

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14
Q

What does this mean?

A

How much raw materials are required

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15
Q

Why is this important?

A

> There needs to be enough raw materials to allow production to continue, however, not too much otherwise this can be expensive for storage
Correct quantities of raw materials are required to satisfy customer demand.

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16
Q

Factor 5:

A

Location of supplier

17
Q

what does this mean?

A

Where the supplier is located, eg which town or city and how far away it is.

18
Q

Why is this important?

A

> The further away the supplier is, the longer the raw materials will take to be delivered
The cost of transporting products has to be considered.

19
Q

Factor 6:

A

Reliability and reputation of supplier

20
Q

What does this mean?

A

Reliability - will the supplier deliver when they say they will?
Reputation - what people think of the supplier

21
Q

Why is this important?

A

> If the supplier does not deliver on time, this might cause production to stop and customers might not get their order on time
Suppliers with a good reputation are likely to get more business compared to one that has a poor reputation

22
Q

Factor 7:

A

Storage space available

23
Q

What does this mean?

A

How much space the business has in a warehouse to hold the raw materials until they are needed.

24
Q

Why is this important?

A

> Raw materials might be wasted if they cannot be stored in the correct place.
Storage costs (eg insurance) can be expensive.

25
Q

Main things to consider when choosing a supplier

A

> Delivers on time so that production does not grind to a halt
Provides good quality stock that does not need to be returned
Charges a competitive price
Can deliver orders at short notice if required
Offers discount for bulk orders
Provides credit facilities when required
Delivers stock free of charge

26
Q

What is Maximum Stock Level?

A

> This is determined by how popular the stock is and what storage space is available.

27
Q

What is Minimum Stock Level

A

> This is determined by how popular the stock is and how long it takes for an emergency order to be recieved

28
Q

What is Re-order Stock Level?

A

> This is determined by how long it takes an order to be received
Stock must be received before old stock runs out

29
Q

What is Re-order Quantity?

A

> Will be set based on what the re-order stock level is

> The re-order quantity should not take stock levels above the maximum stock level.

30
Q

What is Lead Time?

A

> This refers to the length of time it takes a supplier to deliver stock once it has been ordered.
A diagram can also be used to explain stock levels

31
Q

Overstocking definition

A

> When a business is holding too much stock

32
Q

Under stocking definition

A

> When a business is not holding enough stock possible.

33
Q

Problems with overstocking

A

> 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 pf fashion and have to be thrown away
Stock may deteriorate

Business Management (5 decks)

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