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N5 Business > Operations of business > Flashcards

Operations of business Flashcards

1
Q

Operations department tasks

A 
Choosing suppliers
Monitoring inventory levels 
Production of the product 
Ensuring the quality of the product 
Taking into account the ethical and environmental issues faced by operations.
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2
Q

Phases of production

A

Input
Process
Output

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3
Q

Input definition

A

The part of production where raw materials are gathered

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4
Q

Process definition

A

The part of production where the raw materials are manufactured into the final product

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5
Q

Output definition

A

The part of production where the product is distributed to the location the product is sold.

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6
Q

Factors to consider when selecting a supplier

A 
Quality of raw materials 
Price of raw materials 
The reliability of the supplier (its reputation)
The location of the supplier 
Scales of economy 
Lead time
Supplier values
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7
Q

Supplier definition

A

A business which provides raw materials for another business in exchange for money. (Typically in large quantities)

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8
Q

Inventory management definition

A

Inventory management is where a business controls the amount of stock they have to ensure that they aren’t overstocking or under stocking on materials.

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9
Q

Manual inventory management

A

Where the stock level has to be physically updated by staff in the business

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10
Q

Advantages of manual inventory management

A

Works when the power is out

Is cheaper than buying lots of machinery

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11
Q

Computerised inventory control

A

Where computers automatically reorder stock and keep a track of the number of stock being held by the business, usually done by EPOS

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12
Q

Disadvantages of manual inventory control

A

More human error
Less secure because thief’s can steal stock without you knowing
You have to reorder raw materials yourself.
Decreases productivity as staff have to stop to update inventory.

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13
Q

Advantages of computerised inventory management

A

Less human error so more reliable
Easy to tell if thief’s are stealing stock so more secure
Costs less than hiring someone to do the job in the long run
Reorders stock quickly and automatically so more difficult to under stock and overstocking

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14
Q

Inventory control diagram

A 
Inventory control diagram has 
A minimum level,
A maximum level,
A reorder level,
Buffer stock,
Lead time, 
Stock on y axis 
Time on x axis
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15
Q

Minimum level

A

Is the lowest amount of stock your business can have in its inventory without understocking or using buffer stock.

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16
Q

Maximum inventory level

A

Ensures that the business isn’t over stocking

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17
Q

Reorder level

A

Ensures that the raw materials will be delivered by the supplier before the business goes below the minimum inventory level and has to under stock.

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18
Q

Buffer stock

A

The stock left in the back of a business in case of an emergency

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19
Q

Lead time

A

The time taken for the supplier to manufacture/gather and deliver the raw materials to your business.

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20
Q

Consequences of overstocking

A

The cost of storage will increase or you won’t be able to store some of your stock securely as you will have no space.
Perishable items could go out of date
Change in fashion trends could lead to the stock becoming unsellable
Money tied up in capital

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21
Q

Under stocking consequences

A

Production may have to stop because not enough raw materials
Firms may lose out on discounts from scales of economy
Not all customers will be able to purchase product and may decrease customer satisfaction
Businesses might struggle to cope with unexpected orders if under stocking
Admin charges will increase

22
Q

Methods of production

A

Job
Batch
Flow

23
Q

Job production definition

A

Where the business produces a one off product tailored to the customers specific needs

24
Q

Batch definition

A

Where products are made in groups of products and each group is slightly different to the one before , however products made in the same group are identical.

25
Q

Flow production definition

A

Where the product is manufactured on a capital intensive assembly line and is continually added to, each stage will add value to the product and makes standardised products.

26
Q

Advantages of job

A

High customer satisfaction as customers get exactly what they want due to customisability.
Higher prices as seen better quality seen from skilled workers and the fact it is unique.
Workers are skilled and passionate so will be able to solve problems on their own and high productivity in the business.

27
Q

Disadvantages of job

A

It’s expensive to recruit and train specialist staff.
Training is usually required to ensure employees have a high standard of work and so can initially decrease productivity
Materials will be bought in smaller quantities so no scales of economy.
Individuals can take long periods of time to manufacture one product.
Human error is low due to having skilled workers but will still happen
Workers will need breaks and machinery doesn’t.

28
Q

Advantages of batch production

A

Batches can be altered to suit the main customer tastes and trends.
Main ingredients can be bought in bulk using scales of economy to reduce spending
Less skilled Labour is needed so there won’t be long periods of time where workers are away training.
Can be capital or labour intensive to suit your business.

29
Q

Disadvantages of batch production

A

Slower than flow production
Has less customisability than job
Whole batches can be ruined by mistakes
Machinery may need to be cleaned between batches.

30
Q

Flow production advantages

A

Capital intensive so the wages cost will be lower
Raw materials can be bought in bulk meaning the price of products will decrease per unit (scales of economy)
Machines can work 24/7 so production doesn’t need to stop.
Produces standardised products so they are all of the same quality
Faster than other methods.

30
Q

Flow production advantages

A

Capital intensive so the wages cost will be lower
Raw materials can be bought in bulk meaning the price of products will decrease per unit (scales of economy)
Machines can work 24/7 so production doesn’t need to stop.
Produces standardised products so they are all of the same quality

31
Q

Flow production disadvantages

A

Equipment cost a lot to set up which small businesses won’t have access to.
Equipment breaking down can completely stop production and get mechanics in straight away
Cannot be individualised or standardised per person
A large demand is needed because you are producing products so fast.

32
Q

Factors to consider before choosing a method of production

A

The finance available, for instance low finance won’t be able to set up flow production
The nature of the product, does it need to be identical or can it be different for every customer.
The demand and the units needed to be produced, if there is a low demand you will want job to produce products at a slower pace, with a higher price.
Skills of the workers and the availability workers.
The amount of labour needed to complete production.

33
Q

Automation definition

A

Where companies buy machines to do jobs instead of workers because they are faster and cheaper for the long run.

33
Q

Automation definition

A

Where companies buy machines to do jobs instead of workers because they are faster and cheaper for the long run.

34
Q

Technology in operations

A 
CAM: computer aided design 
CAD: computer aided manufacturer 
Email 
Websites
EPOS
35
Q

CAM

A

Computer aided manufacturer used to quickly produce the business product without human error 24/7.

36
Q

Metal detectors

A

Used to ensure the quality of products and make sure they have no unwanted metals in them.

37
Q

CAD

A

Computer aided design is used to speed up product development and make it so there is no need for any physical prototypes.

38
Q

Emails

A

Are used to contact suppliers quickly

39
Q

Websites

A

Websites are used to compare suppliers.

40
Q

EPOS

A

Stands for electronic point of sale and allows for easy inventory management and stock control and instantly contacts supplier when stock needs replenished.

41
Q

Methods of ensuring quality

A

Quality control
Quality assurance
Quality training
High quality raw materials

42
Q

Quality control

A

Where the product is checked for standard at the end of production

43
Q

Quality assurance

A

Where the priciest is checked for standard at the end of every stage of the process meaning less waste.

44
Q

Quality training

A

Where the employees are given additional training to ensure they can produce products, quickly, safely and with low error to keep production going.

45
Q

High quality raw materials

A

Where the business only selects the good raw materials to be used in their products or uses a better quality and reputation supplier.

45
Q

High quality raw materials

A

Where the business only selects the good raw materials to be used in their products or uses a better quality and reputation supplier.

46
Q

Ethical and environmental operations

A

Ensuring that the business doesn’t do anything that is seen as wrong when manufacturing their product.

47
Q

Advantages of ethical production and environmental production

A

Will attract customers with the same values
Associated with higher quality
Used as a marketing tool
Staff recruitment will be easier because the workers will be passionate about the cause.

48
Q

Disadvantages of being ethical and environmental in operations

A

Makes supplier more difficult to choose because they must align with your business values
Costs more to buy ethical raw materials
Productivity will decrease.

N5 Business (6 decks)

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