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Higher business > operations > Flashcards

operations Flashcards

1
Q

what are the factors influencing the choice of supplier

A

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

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2
Q

why is having too much stock a problem

A

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

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3
Q

why is having too little stock a problem

A

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

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4
Q

what are the tactics for managing stockn

A

EPOS - electronic point of sales. this uses barcodes

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5
Q

what is JIT

A

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.

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6
Q

what are the advantages of JIT

A

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

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7
Q

what are the disadvantages of JIT

A

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

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8
Q

why is it important to set appropriate levels of stock

A

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

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9
Q

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

A 
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
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10
Q

what is rate of consumption

A

how much stock you use on a daily basis

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11
Q

what is maximum level

A

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

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12
Q

what is minimum level

A

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

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13
Q

what is lead time

A

the amount of time between ordering it and recieving it

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14
Q

what is reorder stock level

A

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

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15
Q

what is buffer stock

A

the amount of stock between 0 and the minimum level

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16
Q

what is reorder quantity

A

the amount of stock you have to order in

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17
Q

what are the advantages of computerised stock control

A

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

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18
Q

what are the disadvantages of computerised stock control

A

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

19
Q

what are the methods of distribution

A

job production
batch production
flow production

20
Q

what is job production

A

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

21
Q

what are the advantages and disadvantages of job

A

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

22
Q

what is batch production

A

group of similar products manufactured

23
Q

what are the advantages and disadvantages of batch

A

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

24
Q

what is flow production

A

product made 24/7 on line continouosly

25
Q

what are the advantages and disadvantages of flow

A

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

26
Q

what is labour intensive

A

majority of production is undertaken by labour

27
Q

what is capital intensive

A

majority of production is undertaken by machines

28
Q

what are the factors influencing methods of production used

A

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

29
Q

what are the quality techniques

A 
quality control 
quality assurance 
benchmarking 
quality circles 
quality management 
training 
quality materials
30
Q

what is quality control

A

when you check product at end stage

31
Q

what is quality assurance

A

when you check the product at every stage

32
Q

what is benchmarking

A

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

33
Q

what is quality circles

A

groups of staff who discuss how product could be improved

34
Q

what is quality management

A

when whole organisation improves quality of service provided

35
Q

what is training

A

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

36
Q

what is quality materials

A

buying materials from reputable supplier

37
Q

why insist on quality

A 
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
38
Q

what are the costs of quality

A

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

39
Q

what are the advantages of quality circles

A

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

40
Q

what are the disadvantages of quality circles

A

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

41
Q

what are the adv and disadv of quality assurance

A

easier to isolate issues

disadv
stopping of line can be costly
time consuming

42
Q

what are the adv and disadv of quality control

A

less time effective than assurance as you check at end

disadv
difficult to isolate factors
can lead to waste/costs to rework substandard products

43
Q

what are the factors influencing methods of distribution

A

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.

Higher business (11 decks)

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