Operations Flashcards
What is the name of the business function that is responsible for organising the manufacture of products?
operations or production
What is meant by Adding Value?
The process where the value of the outputs have been transformed to be worth more than the value of the inputs
How can you work out Added Value?
Value of inputs - value of ouputs
How can you work out unit cost?
Total costs divided by the number of units
What is CAM?
Computer Aided Manufacture where technology/computer is used to control machinery
What is CAD?
Computer Aided Design where the product is designed on a computer screen ahead of prototypes being made
Give 3 advantages of CAM?
Greater efficiency with lower unit costs and quicker production
Improved accuracy leads to better quality
Less staff also reduces unit costs
Give 2 disadvantages of CAM?
High start up costs to buy in the machinery
Loss of skills as machinery takes over
Give 2 advantages of CAD?
Problems are picked up before prototyping which reduces production costs
More efficient and quicker to redesign which speeds up overall production
Give 2 disadvantages of CAD?
Loss of design skills in the workforce
Training costs to learn new software
Give 4 factors the influence the location of a business
cost of the site, closeness to customers, closeness to skills, access to raw materials
What is the difference between Quality Assurance and Quality Control?
Both processes maintain the standards of the product however QA has a team of checkers during the manufacture process while QC checks off goods by inspection at the end
What is another word for quality (useful in a definition)?
standards/expectations
Name 3 production methods
Job, batch and flow production
Define Job production
Production on individual items is made from start to finish, one item at a time e.g. a hair cut
Define Batch production
Production of items happens in groups when a number go through the same stage at one time before moving on to the next stage e.g. bread in a bakery
Define Flow production
Production is continuous with items moving constantly along a production line from start to finish e.g. cars
Give 3 advantages of Job production
Can be individually customised so each item is unique
Motivating to staff with higher skills and more variety
Quality is achieved through skill level
Give 2 disadvantages of Job production
High unit costs as a lot of staff time is spent on each item
Slower method of production so it might be hard to meet demand
Give 3 advantages of Batch production
Unit costs will be lower than Job production as staff can work quicker
Workers can specialise in a particular process and increase skills and quality
Can switch to different batches/products quicker than flow production
Give 2 disadvantages of Batch production
Jobs can be repetitive which reduces motivation
Storage costs increase of completed batches
Give 3 advantages of Flow production
Fast output reduces unit costs and can meet large demand
Specialised workers become an expert in an area which speeds up production and quality
Products of a standard quality
Give 2 disadvantages of Flow production
High set up costs of machinery
Breakdowns of production line causes major disruption
Huge storage bills
Work out the unit costs if total costs are £1000 and the firm makes 500 units. Then make up your own similar calculation.
£2 (£1000 divided by 500)
What type of pay is used when workers are paid per item made?
Piece rate
What negative effect might using piece rate have?
People rush so they get paid more which lowers quality and increases waste costs
A worker is paid 20 pence per clothing item made, if they make 100 items in a day, what is their pay that day?
£20
Give 3 disadvantages to a business of keeping in lots of stock?
Stock costs money to store
Stock can go off or get damaged which is a cost
Buying stock affects cash flow as money is used to buy goods but there is a delay in getting the money back from sales
Why do businesses hold stock?
Lack of availability of stock upsets customers so they shop elsewhere
Lack of stock might stop the production process if it is one of the business’ raw materials
Lack of stock is a missed sale which means loss of revenue to the business
What is Just in Time?
JIT is a process where a business has a short order time with its suppliers, eg 24 hours, so they hold very little stock but gets deliveries only when they have nearly run out
What are the advantages of JIT?
Very little stock is held so low storage costs, better cash flow and less stock is wasted
What are the 4 roles of the procurement function?
Identify the goods and services needed by the business, find a supplier, place the order, receive and check the goods
Give 4 considerations when placing an order with a supplier
cost, time of delivery, customer service, length of supply chain
What is a supply chain?
The number of other businesses a product goes through before being bought by the company
Name 3 customer rights in consumer law
The product is as described, the product is of reasonable quality, the product is fit for purpose
Give 3 methods of selling
e-commerce, face-to-face, telesales
How might a business offer good customer service?
guarantees, help lines, returns policy, customer service areas in the shop
Give 3 methods technology is used in the production process.
robotics, automation, computerised ordering
