Operations - Suppliers Flashcards
What is the production process ?
Input - raw materials
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Process -what makes the input into a finished product
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Out Put - Finished product
What are the factors to consider when choosing a supplier ?
- Cost of materials
- Discount and trade credit
- Location of the supplier
- Lead time
- Quality of raw materials
- Reputation and reliability
- Quantity of raw materials
What is cost of raw materials ?
This is the price charged by a supplier to purchase raw materials
What is location of supplier ?
This is where the supplier is located and how far away they are.
The further away the supplier is the longer the raw materials will take to arrive and cost of transport may be more expensive
What is lead time ?
The amount of time taken between an order for stock being placed and order recieved
What is reputation and reliability ?
Suppliers that have a good reputation and can be relied upon to deliver goods on time will get more customers.
if a supplier doesn’t deliver at the agreed time or with the correct goods this can affect a business’s ability to produce and deliver the correct product to the customer
What is Discount and trade credit ?
Discount for regular orders make the cost of the raw materials cheaper which lowers cost of production
Trade credit allows the business a period of time without having to pay for purchase which can help with cash flow
What is Quantity of raw materials ?
This is how many raw materials are required
What is Quality of raw materials ?
The quality of raw materials will have a direct effect on the quality of a business finished product
What is operations ?
the process of turning raw materials into finished goods ready to be sold
What are the roles of the operation department ?
- Producing the goods or providing the service required on time
- Purchasing the raw materials required to manufacture the goods/ provide a service
- Ensuring that suppliers of raw materials do not ‘run out’
- Managing the operations workforce
