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Business > Operations > Flashcards

Operations Flashcards

1
Q

What does the operations department do?

A

Takes raw materials (input) and puts them through a variety of procedures (processes) to turn them into finished products/services (output)

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2
Q

What is just in time ?

A
  • JIT is an alternative approach to inventory management system.
  • the materials are ordered JUST IN TIME to make the products.
  • the products are assembled JUST IN TIME.
  • There is no room for storage.
  • nothing is produced unless there is a customer demanding the product.
  • this is usually done through the marketing dep predicting demand and figures OR the business waits on orders before they start production.
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3
Q

Advantages of JUST IN TIME

A
  • Capital (money) isn’t tied up in stock, can be used elsewhere.
  • more responsive to customer demand.
  • closer relationship with suppliers.
  • reduced stock deterioration, wastage , left.
  • reduction in storage costs - space, equipment and staff.
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4
Q

Disadvantages of JUST IN TIME

A
  • Production may be disrupted if supplies do not arrive in time - external factors.
  • may lose bulk buying discounts.
  • increased ordering, admin and delivery costs.
  • may not be able to respond to sudden increase in demand.
  • no room for error - ‘no extra materials’
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5
Q

What is the operating system?

A

Input, process, output.

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6
Q

What factors must a business consider when choosing a supplier?

A
  • The price range
  • The quality of their materials
  • Reputation
  • Their location
  • Their lead time
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7
Q

What does optimum stock level mean?

A
  • One of the most important tasks for inventory management is to ensure that organisations have the correct level of stock for their day-to-day operations.
  • Too much stock can be difficult to manage and expensive to store while too little stock can mean running out.
  • Inventory levels must be kept at a manageable level- neither too low nor too high.
  • Optimum stock level = storage costs are at a minimum level but there is inventory to meet requirements.
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8
Q

Describe understocking

A
  • Production could stop- machinery and workers could sit idle.
  • Businesses could gain a bad reputation and image.
  • Customer complaints due to not receiving orders on time.
  • Fewer smaller orders can increase administration costs and economies of sale can be lost.
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9
Q

Describe overstocking.

A
  • Increased costs for storage and security.
  • Waste of stock due to it becoming out of date.
  • Higher risk of stock being stolen.
  • Cash flow problems- less cash available as too much stock has been purchased
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10
Q

What is the purpose of an inventory management system?

A
  • Ensure that there is enough stock available when needed.
  • Avoid delays due to lack of inventory.
  • Ensure over stocking doesn’t happen .
  • Ensure production doesn’t stop.
  • Avoid stock deteriorating/ becoming obsolete
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11
Q

What is lead time ?

A

The time that passes between ordering stock and it arriving at the warehouse.

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12
Q

What is maximum stock level?

A

The biggest amount of inventory that can be sorted at one time . At this level costs will be the minimum per unit as storage is at full capacity

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13
Q

What is buffer inventory

A

A safety supply of around 100 items that are held in case deliveries are delayed or there is an unexpected large order

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14
Q

What is re order level ?

A

The quantity at which more inventory is ordered.

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15
Q

What is minimum stock level?

A

The lowest amount of stock that should be stored at one time. There is ranger at this level that inventory can fall too low and production would cease.

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16
Q

What is re order quantity

A

The quantity of inventory that is ordered to bring levels back to the maximum

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17
Q

Warehousing - What will the type of storage depend on ?

A
  • Type of stock (perishable)
  • finance available for storage.
  • size and location of customers.
  • how and where will finish going to be transported?
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18
Q

What is centralised storage?

A
  • This involves storing infantry in one central location. One huge factory to our products are stored and send out to customers as they order them.
  • E.G Amazon
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19
Q

Advantages of centralised storage.

A
  • specialist staff required to maintain inventory- The speeds up the process and improve security.
  • install large amounts of inventory – can receive bulk buying discounts.
  • Maybe cheaper having one large store for inventory then having multiple smaller locations.
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20
Q

What is decentralised storage?

A
  • This involves storing inventory in various locations in the organisation. Each branch of department is responsible for ordering a maintaining its own inventory
  • E.g Tesco each store has its own warehouse attached to the store.
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21
Q

Disadvantages of centralised storage?

A
  • Inventory is stored centrally – takes time to move into areas of production (delays).
  • The cost of the warehouse is high.
  • This method use of this method has declined due to more efficient methods such as JIT.
  • specialist staff required to maintain inventory – increases costs..
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22
Q

Advantages of decentralised storage

A
  • Inventory is always close by when required.
  • smaller stores are less likely to face overstocking consequences.
  • Smaller stores are more responsive to local needs.
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23
Q

Disadvantages of decentralised storage

A
  • Lack of specialist staff so security isn’t as tight so it can lead to theft.
  • Smaller stores are more likely to face understocking consequences.
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24
Q

What is the logical management?

A

• all the product is transported and distributed from the manufacturing site to the customer/store.

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25
Q

Logistical management - ROAD

A

ADVANTAGES:
•Convenient, quick, relatively low cost, right straight to destination, can be refrigerated.

DISADVANTAGES
• Not suitable for larger products, weather and roadworks can cause delays

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26
Q

Logistical management- RAIL

A

ADVANTAGES:
•Convenient for bulkier products, no issue of traffic buildup, can’t be faster than road, more environmentally friendly.

DISADVANTAGES:
•Not direct, weather can still have an impact

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27
Q

Logistical management - SEA

A

ADVANTAGES:

• Best for international trade, Allows huge amounts to be transported.

DISADVANTAGES:
• slowest method, no use for perishable items.

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28
Q

Logistical Management - AIR

A

ADVANTAGES :
• fastest fastest method for long distance, useful for remote areas.

DISADVANTAGES:
• very expensive, not environmentally friendly, still requires road transport to complete delivery

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29
Q

What is the distribution mix

A
  • The cost of delivery/weight of products.
  • Finance available – next day delivery/1st class.
  • Reliability of the courier can we meet next day deliveries.
  • Type of product e.g. frozen foods – chilled vans.
  • legal restrictions are used tobacco and alcohol – the delivery must be licensed.
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30
Q

What is just distribution and logistics concerned with?

A

Getting the Finnish goods to the right customer safely and on time.

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31
Q

What is capital intensive?

A
  • this is where the production process relies more on machine and equipment instead of humans.
  • suitable where the cost of machinery is more affective compare to labour machinery is cheaper than wages.
  • Also used where the process is repetitive and requires precise consistent output e.g. cars, packaged food.
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32
Q

what are the advantages of capital intensive?

A
  • Can work 24/7
  • standardise quality
  • less skilled workforce required.
  • fewer employees (wages)
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33
Q

Disadvantages of capital intensive

A
  • machinery/equipment is expensive initially
  • Customisation can be difficult.
  • breakdowns can be expensive and cause production to stop.
34
Q

What is labour intensive?

A
  • this is where a business uses a larger proportion of human input than machinery in the production process.
  • Suitable where the production process requires flexibility on customisability.
35
Q

Advantages of labour intensive

A
  • for creative industries.
  • unique products.
  • Labour is readily available (training required)
  • No expensive equipment required.
36
Q

Disadvantages of labour intensive

A
  • Quality can vary (mistakes)
  • training takes longer.
  • Expensive and time – consuming to recruit, select and train.
  • holidays/breaks
  • can take longer to make product than machine.
37
Q

What is batch production? (Capital intensive)

A
  • Groups of identical products being made at one time.
  • Different ingredients used for different groups – each batch will differ in flavour/colour
  • One group was made the machines are cleaned and another batch labour will be made.
  • E.g. different flavours of walkers crisps. One group of crisps made of salt and vinegar and another of cheese and onion and so on
38
Q

What is automation ? (Capital intensive )

A

• Refers to the product being fully automated. This uses computer aided manufacture to control fully automated assembly lines e.g. robotics to Manufacture cars

39
Q

Advantages of automation?

A
  • Production time is quicker and can be repeated constantly with no errors.
  • accuracy is far greater because there is no human error.
  • the work environment is safer as employees will not be in automated work areas while production takes place.
40
Q

Disadvantages of automation?

A
  • There is no flexibility as machinery can only do what is programmed to.
  • because unemployment to increase, which has an economic impact on the country.
  • Machinery is expensive.
41
Q

What is flow production (capital intensive)

A
  • involves identical products being made along the production line.
  • product being produced flows through various stages with parts being ordered at each stage.
  • continuous output of identical products.
  • Mass production with the use of machinery
42
Q

What is mechanisation (capital intensive)

A

• Refers to labour and machines working together on the production of a project e.g. clothing company using sewing machines

43
Q

Advantages of mechanisation

A
  • Using labour allows for production issues to be flagged up quickly.
  • Labour can be trained and become an expert in operating machinery.
44
Q

Disadvantages of mechanisation

A
  • The initial setup costs are high.

* .machinery could break down and idle time is a negative factor

45
Q

Factors to consider when choosing a method of production.

A
  • The skills of the workforce.
  • The finance available.
  • The technology available to support the production process.
  • The size of the business.
  • The demand for the product.
  • The nature of the product been made.
46
Q

What is job production (labour intensive)

A
  • Company produces a single product or a small number of products to specific requirements.
  • may be a one off job to suit customers particular requirement.
  • One job is finished before another started.
  • E.g. wedding cake
47
Q

Why is it important for the operations department to ensure goods are of a high quality?

A
  • , high-quality goods can be sold for premium prices
  • Poor quality goods can result in customer returns and complaints which can lead to loss of sales and bad reviews.
  • selling high-quality products can attract high-quality staff.
  • high-quality products can result in high-quality image and reputation being generated.
  • Extremely low quality can result in products not meeting and safety standards.
48
Q

What is quality control

A

We are all materials are inspected of finished goods are inspected to check that they are of an acceptable standard before sale

49
Q

What is quality assurance

A

•Quotations as a method of prevention or products or check for quality at different stages in the production process e.g. check raw materials check machinery sample work and inspect finished goods.

50
Q

What are advantages of quality control

A
  • Insurers and a faulty goods are sent to customers
  • it’s cheap
  • Limits the potential for a bad reputation as products Are checked at the end of production.
51
Q

What are the disadvantages of quality control

A
  • Country a lot of waste products are not checked until they’re made.
  • faulty products Are thrown away.
  • Products have to be re-made from scratch this cost the business time and moneys
52
Q

What are advantages of quality assurance?

A
  • Less wastage which reduces cost.

* easy to identify where the faults are occurring on the production line.

53
Q

Disadvantages of quality assurance

A
  • Increase costs are as usually a designated QA manager.

* Cancelled on production process due to all the checks.

54
Q

What is benchmarking?

A

• This is when a business compares its products with the best in the industry, the business with then aim for these standards with its own products.

55
Q

Advantages of benchmarking

A
  • if successful, the product will be as good as best on the market.
  • saves business time in developing their own quality approach.
56
Q

What is a quality circle

A

When a group of employees meet to discuss problems in the production process and how to solve them, this involves a wide righty of staff from different levels of the hierarchy suggestions of them passed management for discussion on implementing them.

57
Q

Disadvantages of benchmarking

A
  • can be difficult to gain competitors information.

* when the best improve the business will be left behind still need to continually improve.

58
Q

Advantages of quality circle

A
  • Management will receive well-informed suggestions as there as they are from employees such as produce the product.
  • employees will be motivated as they have a say In decision making.
59
Q

Disadvantages of a quality circle

A
  • Employees must meet during the day - production time is lost
  • suggestions are not always feasible therefore time is wasted.
60
Q

What is mystery shopping

A

• this is when an organisation employs trained shoppers to anonymously evaluate:

  • Service received
  • Quality of the product
  • how did it compare with the competitor service?
  • use of merchandising
  • Good stuff comply with legal requirements?
61
Q

Advantages of mystery shopping?

A
  • no bias is shown as Mr shoppers are usually hired from agency.
  • valuable feedback has gathered.
  • suggestions and training needs are highlighted
62
Q

Disadvantages of Mystery shopper?

A
  • Staff may take the feedback personally if they served the mystery shopper.
  • mystery shoppers need to be paid.
  • feedback may not be fully representative of the whole business e.g one day, one branch, one staff
63
Q

What is continual improvement?

A

•organisations should always be aiming continually to improve themselves, even if it has met its aims / objects.

64
Q

Advantages of continual improvement?

A
  • This business may stay ahead of competition.

* Business can react easily to changing external factors.

65
Q

Disadvantages of continual improvement

A
  • can have high staff training costs.

* employees may feel under pressure to continually keep improving.

66
Q

What are examples of ethical operations?

A
  • Not using child labour.
  • Using fairtrade product.
  • Not testing on animals.
  • Paying employees a fair amount wage.
  • Providing employees with good working conditions
67
Q

What are the advantages of being ethical?

A
  • Awards can be awarded for being ethical.
  • Businesses that are ethical can attract customers who agree with the principles.
  • Can improve the organisation reputation.
  • Ethical standards ensure the safety and welfare of employees and animals if they are needed for the production.
68
Q

What are disadvantages of being ethical?

A
  • Decision making can be time consuming as an ethical option must always be used.
  • Audits are needed to ensure standards are met and maintained - time consuming.
  • More expensive to operate this way.
  • Must ensure that the supply chain are also using ethical options.
69
Q

When operating a fairtrade policy a business will only use a supplier who:

A
  • Have sourced their materials in an ethical manner.
  • Treat employees fairly and ensure their health and safety.
  • Pay the producers (e.g farmers) a fair price for their goods.
70
Q

Examples of being environmentally friendly?

A
  • Recycling
  • Minimising packaging.
  • Reducing carbon footprint.
  • Reducing waste.
  • Using renewable energies.
71
Q

Advantages of being environmentally friendly?

A
  • The business can gain a positive reputation.
  • May lead to higher sales/profits.
  • Awards can be gained for being environmentally friendly.
  • Using renewable energies can save money in the long run.
72
Q

Disadvantages of being environmentally friendly?

A
  • Investment in environmentally friendly measures will be initially expensive e.g installing solar panels.
  • Can be time consuming process to change procedures to fit in with standards.
73
Q

Methods of technology include?

A
  • Barcodes/ EPOS -can be used with computerised stock control to automatically reorder stock, highlight demand and track deliveries .
  • Databases - can keep track of supplier details and previous orders.
  • Internet- can be used to research suppliers and their prices.
  • E-mail can be used to contact customers about the progress of their order.
74
Q

Advantages of using technology?

A
  • increase productivity as technology can work faster than humans.
  • reduced staffing costs.
  • reduced waste - technology makes fewer mistakes than humans.
  • Valuable info can be gathered.
  • Allows e-commerce to be used.
75
Q

Disadvantages of using technology?

A
  • initial costa are high.
  • New GDPR laws can make sorting difficult.
  • Computer viruses/ hacking can occur.
  • Staff training is costly and will need to be upgraded regularly.
76
Q

What is CAD?

A
  • COMPUTER AIDED DESIGN
  • This is the use of computer software to assist in the:
    • creation.
    • Modification.
    • Analysis.

Used predominantly in the research and design stage of a new product before it is manufactured.

77
Q

Advantages of CAD?

A
  • Images can be saved and edited at later date.
  • Faster to modify on the computer than hand drawings.
  • More accurate than hand drawing which means less human error.
  • Images can also be shared by email and viewed in 3D.
78
Q

Disadvantages of CAD?

A
  • Initial cost of software is high which will reduce profits.
  • Computers need a large amount of processing power to support the software.
  • Staff need to be trained in how to use the software.
79
Q

What is CAM?

A
  • COMPUTER AIDER MANUFACTURE.
  • This is using computers during the manufacturing process machinery/robots are controlled using a computer program.
  • User where a large number of identical items need to be produced e.g cars.
80
Q

Advantages of CAM

A
  • Improved efficiency because production is 24/7.
  • Improved accuracy because human error is eliminated.
  • This also leads to reduction in waste and the costs of waste disposal.
  • Speed of production is more predictable because controlled by a computer program.
81
Q

Disadvantages of CAM

A
  • high initial cost to purchase machinery and computer which will reduce profits.
  • could lead to customer complaints.
  • Production will stop if machinery or computers break down which will prevent deadlines being met.

Business (3 decks)

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