Operations

Question 1

What is a supply chain

Answer 1

A group of firms involved in the process of manufacturing and designing a product or service

Question 2

Who is involved in the supply chain

Answer 2

Suppliers
Manufacturers
Distributors
Retailers

Question 3

What do businesses need to consider when choosing a supplier

Answer 3

Price of raw material
Quality
Reliability
Sustainability

Question 4

Procurement

Answer 4

Is the process of finding and buying things a firm needs from a supplier

Question 5

Logistics

Answer 5

The process of getting goods and services from one part of the supply chain to another

Question 6

Benefits if managing supply chain effectively

Answer 6

Good relationship with suppliers
Finding the best price and value
Reducing unnecessary waste

Question 7

Job Production

Answer 7

The process of making a product to meet the customers demands and each product is unique ie a wedding cake,wedding dress

Question 8

Benefits of job production

Answer 8

Firms can charge higher prices because of skilled labour
This leads to an increase in profit.
High Quality so customers will be pleased.This improves business image

Question 9

Drawbacks of job production

Answer 9

Skilled labour is expensive

Time consuming

Question 10

Flow production

Answer 10

A continuous production of products where they are all items are identical and aim to make as many as possible

Question 11

Benefits of flow production

Answer 11

Businesses can achieve economies of scale and as a result have low unit cost.
Capital intensive so machinery is quick and accurate

Question 12

Drawbacks of flow production

Answer 12

If a machine breaks down it will stop the entire production process
High initial cost
High cost for storage units

Question 13

Lean production

Answer 13

A strategy businesses can use to make production more efficient

Question 14

Aims of lean production

Answer 14

Businesses aim to use few resources as possible and have as little waste as possible

Question 15

Just in time (JIT)

Answer 15

JIT is a form of lean production. It aims to keep stock levels to the bare minimum. JIT products arrive from manufacturer and is immediately delivered to the customer

Question 16

Benefits of JIT

Answer 16

Little to no cost on storage

Reduced waste

Question 17

Drawbacks of JIT

Answer 17

There needs to be a lot of coordination between supplier and firm. The firm also needs to make frequent deliveries. This is costly
If deliveries of don’t arrive on time or there are mistakes with the order the company just runs out of stock
JIT businesses miss out on economies of scale (bulk buying)

Question 18

Just in case (JIC)

Answer 18

JIC is the method of operating a production and distribution system with buffer stock (extra stock) in case there is an increase in demand or supply shortage

Question 19

Benefits of JIC

Answer 19

If there is problem with deliveries of raw materials there is extra stock to satisfy customer and demand

Question 20

Drawbacks of JIC

Answer 20

Business can be left with a big stockpile of items which may lead to a purchase of a larger storage

Question 21

Quality

Answer 21

The minimus standard a customer demands from a product

Question 22

Factors that affect quality

Answer 22

Materials used

Production method

Question 23

Benefits of maintaining quality

Answer 23

Higher Price-Customers are prepared to pay more for higher quality products
Increased Sales-When customers make purchase and are pleased with it they’re likely to return. This increases sales
Improved image and reputation- firms that have good quality products usually have better reputation. This means new customer are likely to choose you instead of your competitors. Existing customers may also be encouraged to return

Question 24

Drawbacks of maintaining good quality

Answer 24

Staff training- giving staff the proper training may be time consuming and costly
Inspection-products need to be inspected to check quality. This process takes time

Question 25

What happens if quality isn’t maintained

Answer 25

Disrupted provision of services-if quality standards are not maintained it may disrupt services a business has to offer and ultimately losing potential sales
Product recalls-if a product isn’t safe or poor quality the firm may need to give the customer a refund or give them a new product. This is costly. In worst case scenario it may lead to a lawsuit which damages the image and reputation of a business.

Question 26

Ways quality is measured

Answer 26

• Specify the physical properties of a product and test a random sample ie the colour,size and ingredients. Testing random samples can see if product meets the specification.
• Monitor how many products get returned and how many customer complaints
• Customer surveys/reviews. This can tell the business what they need to improve or change

Question 27

Quality Control

Answer 27

Is where finished products are checked by inspectors to see if they meet the set standard.

Question 28

Quality assurance

Answer 28

is where quality is built into the production process. For example, all staff check all items at all stages of the production process for faults. In this way everyone takes responsibility for delivering quality. Successful quality assurance results in zero defect production.

Question 29

Total Quality Management (TQM)

Answer 29

Aims to make quality the responsibility of every employee in the firm in order to make sure quality remains consistent. This can help reduce waste by getting things right the first time

Question 30

Why does rapid growth make if hard to maintain quality

Answer 30

• May become to expensive to carry out all necessary inspections
• A business may be overwhelmed and cut corners to make products quicker

Question 31

Solutions to rapid business growth

Answer 31

• Business may hire more employees even if it’s time consuming
• Business may become a franchisor
• Business may outsource it’s product (may be expensive to outsource to a business that delivers high quality)