operations

Question 1

what are the factors influencing the choice of supplier

Answer 1

price, credit terms, quality, after sales service, size of business, reliability, location

Question 2

why is having too much stock a problem

Answer 2

high storage costs, money tied up in stock where the business could have invested it in advertising or marketing, potential loss of sales, staff coudl potentially steal stock, high security costs

Question 3

why is having too little stock a problem

Answer 3

could run out of stock, making customers turn to competitors
they could lose out on bulk buying discounts
they would be charged a lot more if they require more stock to be delievered quickly
also, they would incurr administrative costs

Question 4

what are the tactics for managing stockn

Answer 4

EPOS - electronic point of sales. this uses barcodes

Question 5

what is JIT

Answer 5

Just In Time. This is when the supplier holds onto the stock eg components of raw materials and delivers then right on time for them to be used.

Question 6

what are the advantages of JIT

Answer 6

able to cut down storage costs which then allows for cashflow to be improved
allows you to expand production
less vulnerable to fashion changes
closer bond with supplier

Question 7

what are the disadvantages of JIT

Answer 7

delivery costs will increase
quality checks become responsibility of supplier which is a risk
may lose out on bulk buying discounts
increased volume of traffic on roads, which would then increase pollution, therefore affecting the business’s CSR policy

Question 8

why is it important to set appropriate levels of stock

Answer 8

having a MINIMUM STOCK LEVEL ensures there is always stock for production and so nothing is wasted

having a MAXIMUM STOCK LEVEL ensures that the business does not incurr of the costs above the maximum level. Also ensures money and storage space is taken up

a REORDER STOCK LEVEL has to be set so they know when they should order in more stock

a REORDER QUANTITY LEVEL has to be set so the organisation knows how much stock is needed

Question 9

what are the factors that have to be taken into account when firm sets efficient stock levels

Answer 9

storage space available
cost of storage 
money tied up in stock
security of holding stock
ordering and delivery time 
daily usage 
lead time 
amount of stock required to bring stock level back to a minimum

Question 10

what is rate of consumption

Answer 10

how much stock you use on a daily basis

Question 11

what is maximum level

Answer 11

the costs that you don’t want to incurr with if you go above the maximum level

Question 12

what is minimum level

Answer 12

costs below minimum level that you don’t want to incurr with

Question 13

what is lead time

Answer 13

the amount of time between ordering it and recieving it

Question 14

what is reorder stock level

Answer 14

the time when you have to restock enough to not fall below the minimum level

Question 15

what is buffer stock

Answer 15

the amount of stock between 0 and the minimum level

Question 16

what is reorder quantity

Answer 16

the amount of stock you have to order in

Question 17

what are the advantages of computerised stock control

Answer 17

removes human error which in turn reduces waste and cost
able to calculate reorder level of stock
money is saved since you don’t use human labour
less stock therefore wastage is minimised

Question 18

what are the disadvantages of computerised stock control

Answer 18

makes staff redundant then staff morale can lower
equipment is expensive
system usually only works if there is a trend in products sold

Question 19

what are the methods of distribution

Answer 19

job production
batch production
flow production

Question 20

what is job production

Answer 20

unique, one off products that meet customer’s requirements and needs. it is labour expensive

Question 21

what are the advantages and disadvantages of job

Answer 21

adv
allows firm to charge high price as it is made to customers needs therefore high profits

customers are usually loyal as product tailored to their needs

staff are motivated so morale is high

disadv

labour expensive
firm does not have chance to bulk buy so they can’t achieve economies of scale
high wastage costs
wide variety of tools - expensive

Question 22

what is batch production

Answer 22

group of similar products manufactured

Question 23

what are the advantages and disadvantages of batch

Answer 23

adv

wider customer range so more customers satisfied therefore more profit
less skilled labour is required so labour costs arent so high

disadv

delays occur as machinery stopped and changed causing wastage of time
less interesting than job, so staff morale may be low
stock between stages may get damaged

Question 24

what is flow production

Answer 24

product made 24/7 on line continouosly

Question 25

what are the advantages and disadvantages of flow

Answer 25

able to bulk buy so able to exploite economies of scale reaches mass market quality able to be measured to highest standard disadv product highly standardised so prevents high price from being charged expensive to purchase equipment staff may become unmotivated production line cannot be altered to meet customers needs

Question 26

what is labour intensive

Answer 26

majority of production is undertaken by labour

Question 27

what is capital intensive

Answer 27

majority of production is undertaken by machines

Question 28

what are the factors influencing methods of production used

Answer 28

size of market - firm deals with large market eg large and varied so wont be able to vary product - flow/batch amount of finance - if firm has a lot of money then they can buy machines to help production product - one off, groups, large amount of prod price - if product very expensive to make - job if firm has up to date tech then they can use flow

Question 29

what are the quality techniques

Answer 29

``` quality control quality assurance benchmarking quality circles quality management training quality materials ```

Question 30

what is quality control

Answer 30

when you check product at end stage

Question 31

what is quality assurance

Answer 31

when you check the product at every stage

Question 32

what is benchmarking

Answer 32

when firm looks to the 'best in field' and tries to follow what they do so they become like them

Question 33

what is quality circles

Answer 33

groups of staff who discuss how product could be improved

Question 34

what is quality management

Answer 34

when whole organisation improves quality of service provided

Question 35

what is training

Answer 35

ensuring all staff are familiar with job and ensuring waste is being minimised

Question 36

what is quality materials

Answer 36

buying materials from reputable supplier

Question 37

why insist on quality

Answer 37

``` crucial part of firms image builds a good rep gain competitive edge over comp reduce after sales costs reduce waste attract big investors attract staff ```

Question 38

what are the costs of quality

Answer 38

training of staff of how to work with systems such as JIT - costly better raw materials cost extra extra paperwork cost of change of procedures eg hiring new manager

Question 39

what are the advantages of quality circles

Answer 39

quick identification of problem instant feedback from management acknowledgement of a worker's suggesstion raises morale encourages more open style of management

Question 40

what are the disadvantages of quality circles

Answer 40

groups not always productive managers need to be trained so they know how to handle these groups loss production

Question 41

what are the adv and disadv of quality assurance

Answer 41

easier to isolate issues disadv stopping of line can be costly time consuming

Question 42

what are the adv and disadv of quality control

Answer 42

less time effective than assurance as you check at end disadv difficult to isolate factors can lead to waste/costs to rework substandard products

Question 43

what are the factors influencing methods of distribution

Answer 43

firm will need a lot of trust in supplier before awarding HIT initiative firm has a lot of money then they can afford own regional distribution warehouses small high volume expensive components will be distributed by air as they are light coming from long distance and price will justify flight costs.