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1 Business Studies > Production > Flashcards

Production Flashcards

1
Q

What are the main way to add value?

A 
Transformation process
Additional features
Distinct brand image
Assumed value
Excellent customer service
Delivery service
Range of models/options
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2
Q

Advantages of adding value?

A

Allows a higher price (higher profit)

Creates USP

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3
Q

Disadvantages of added value?

A

Increased cost
Might reduce sales
Elasticity of product might affect ability to change price

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4
Q

What are the three aspects of value analysis?

A

Function, cost and aesthetics

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5
Q

What is research?

A

Finding out what customer want or improving products

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6
Q

What is development?

A

Taking research and improving

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7
Q

Innovation is …

A

where the idea becomes an economic reality

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8
Q

What are the problems with R and D?

A 
Cost 
Risk
Copying
Limited protection
Changes in technology
Changing customer needs
Unemployment
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9
Q

Factors influencing level of R and D

A

Level of competition
Product
External environment
State of economy

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10
Q

What is market orientated?

A

Where a company finds out what the market wants and develops a product in relation to this

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11
Q

What is product orientated?

A

When you develop a product and try to sell it

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12
Q

What are the different types of production?

A

Job production - one off
Batch production - certain number made before specification changed
Flow/mass production - involves a production line
Process production - a series of process which raw materials go through e.g. oil

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13
Q

What factors affect the type of production used?

A 
Initial capital
Customer needs
Type of good/market
Product lifetime
Business objectives 
Competition
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14
Q

What is cell production?

A

When workers are organised into multi-skilled teams responsible or a particular production process

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15
Q

What does critical path analysis allow?

A

The overall time for the project to be calculated

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16
Q

What are the advantages of critical path analysis?

A

Helps reduce risk and cost
Helps identify slack
Decision making and planning tool
Can help other aspects of business planning

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17
Q

What are the disadvantages of critical path analysis?

A

Based on estimates
CPA does not guarantee success
Resources might not be as flexible as management hopes
Too many activities might make diagram confusing

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18
Q

How to calculate total float?

A

Lastest finish time - duration - earliest start time

LFT - duration - EST

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19
Q

How to calculate free float?

A

Earliest start time (next activity) - duration - earliest start time
EST (next activity) - duration - EST

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20
Q

What is PERT analysis?

A

A pessimistic variation of critical path analysis

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21
Q

What is the formula for PERT analysis?

A

Optimistic time + 4 x likely time + pessimistic time / 6

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22
Q

A GANTT chart is …

A

a graphical representation of the order and duration of tasks

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23
Q

What are the benefits of a GANTT chart?

A

Visual representation
Easy to manage
Shows what is happening
Allows time and resource management

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24
Q

What are the drawbacks of a GANTT chart?

A

Does not show critical activities
Can not see EST and LFT
Can not calculate float
Does not allow for external factors

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25
Q

Productivity is …

A

the amount of output per given input in a given time period

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26
Q

What is the formula for productivity?

A

Total output/total input

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27
Q

What is the formula for labor productivity?

A

Outputs/average no. of employees

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28
Q

How can you increase productivity?

A 
Training 
Improved motivation
More or better capital equipment 
Better quality raw materials 
Improved organization of production
Target setting
Factory layout
Teamwork
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29
Q

An economy of scale is when …

A

Unit cost falls as output increases

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30
Q

What is an internal economy of scale?

A

An economy of scale arising from growth of the business its self

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31
Q

What is an external economy of scale?

A

Economies of scale which occur within the industry

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32
Q

What are the internal economies of scale?

A 
Purchasing
Technical 
Specialisation
Marketing
Managerial
Financial
Network
Risk-bearing
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33
Q

What are the external economies of scale?

A

Development of local facilities
New research
Relocation of suppliers
Agglomeration economies

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34
Q

What is a purchasing economy of scale?

A

Discounts offered on large orders

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35
Q

What is a technical economy of scale?

A

Large businesses can afford to invest in the latest technology

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36
Q

What is specialization in the workforce as an economy of scale?

A

It is when production can be broken up into tasks which are then completed by specialists

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37
Q

What is a marketing economy of scale?

A

If they offer a large range of products it gives them power when negotiating with suppliers, also some products might provide passive benefits to others

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38
Q

What are financial economies of scale?

A

Large businesses are often more creditworthy and floated on the stock market

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39
Q

What are network economies of scale?

A

The cost to add one new user is often negligible to large companies

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40
Q

What are risk baring economies of scale?

A

Risks are spread across a large company with a range of products

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41
Q

A diseconomy of scale is …

A

when a businesses growth causes a rise in unit cost

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42
Q

What are the diseconomies of scale?

A

Poor communication
Lack of motivation
Lack of direction
Loss of organization

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43
Q

What is capacity utilization?

A

The percentage of total capacity that is actually being achieved in a given period

44
Q

What is the formula for capacity utilization?

A

(Actual level of output/maximum possible output)*100

45
Q

How can you increase capacity utilization?

A

Lower maximum possible output
Increase demand (marketing, price)
Differentiate product

46
Q

Why might a company not have 100% capacity utilization?

A

Competition
Stage in product life cycle
Seasonality
Alternative costs

47
Q

What are the benefits of having high capacity utilization?

A 
Fall in average costs
Less wastage
Increased profit
Employee motivation
Increased competitiveness
48
Q

What are the drawbacks of having high capacity utilization?

A

Coping with maintenance and breakdowns
Cannot accommodate additional orders
High-pressure environment
Reduced quality

49
Q

What is stock control?

A

The process used by a business to ensure that it has sufficient stock for its purpose

50
Q

What are the types of stock?

A

Raw materials
Work in progress
Finished goods

51
Q

What is maximum and minimum stock?

A

Maximum stock is the highest amount a company is willing to hold and minimum is the lowest amount

52
Q

What is buffer stock?

A

A reserve of stock which is maintained to allow for changes in demand

53
Q

What is the lead time?

A

The difference between the order time and when the company receives the goods

54
Q

What is the reorder level?

A

Trigger point for when the next order for stock should be placed

55
Q

What is a stock out?

A

When you run out of stock

56
Q

What are the costs of holding too much stock?

A

Can be damaged as hard to monitor
Takes up space (increased costs)
Money tied up (opportunity cost)
Raw materials and work in progress hard to liquidate
Depreciation of stock
Space for storage cannot be used for anything else (opportunity cost)

57
Q

What are the benefits of holding stock?

A

Allows you to meet demand
Buffer stock allows for fluctuations in demand
Economies of scale

58
Q

How do you calculate average stock level?

A

Maximum stock level + minimum stock level / 2

59
Q

What are the problems associated with a stock out?

A

Cannot meet demand
Cannot hold buffer stock
Bad reputation
Cash flow issues

60
Q

What is first in first out (FIFO)? - Stock control

A

The first stock in should be the first out

61
Q

What is last in first out (LIFO)? - Stock control

A

Most recent stock in should be first out (cannot use for perishable goods)

62
Q

What is EPOS (Electronic Point Of Sale)? - Stock control

A

A computerized system including barcodes and scanners which tracks the volume of a stock

63
Q

What is Kanban? - Stock control and Lean production

A

A traffic light system in which stock is only brought forward when the light is green

64
Q

What is JIT (Just In Time)? - Stock control and Lead production

A

When goods are received only when they are needed but relies upon dependable suppliers

65
Q

What is Economic Order Quantity (EOQ)? - Stock control

A

The order quantity in that minimizes total inventory holding cost and ordering cost

66
Q

What is lean production?

A

An approach to management that focuses on cutting out waste, whilst ensuring quality

67
Q

What is time management? - Lean production

A

A method of looking to reduce wasted time allowing for; quicker response time, faster product development and reduced staff costs

68
Q

What is motivation? - Lean production

A

Increasing your workers desire to perform and increasing productivity

69
Q

What is Kaizen? - Lean production

A

Means “continuous improvement” and is employee lead small changes to improve production

70
Q

What is cell production? - Lean production

A

When the production line is spilt into cells responsible for a part allowing the people in the cells to rotate their roles

71
Q

What is Total Quality Managment (TQM)? - Lean production

A

An attitude to quality where there are zero defects and total customer satisfaction. It is achieved through regular checking and removing defects early

72
Q

What is Jidoka? - Lean production

A

Building into production the ability to detect faults

73
Q

What are quality circles? - Lean production

A

Groups of employees and external counsel brought together to identify potential improvements

74
Q

What do you need for successful implementation of lean production?

A

A culture for change
A budget/suitable finances
Customer and employee centered
Good relationship with suppliers

75
Q

What are some examples of waste production?

A

Over-production
Waiting time
Stock
Defects

76
Q

What are the supply factors affecting location?

A 
Labour costs 
Land costs
Energy costs
Transport costs
community factors - local amenities, local government
77
Q

What are the demand factors affecting location?

A 
Customer convenience
Labour skills 
Site suitablity
Image
Expansion potential
78
Q

Logistics are …

A

The general commercial activity of transporting, storing and acquiring goods

79
Q

What are the key factors of logistics?

A

Storage facilities
Customer requirments
Information systems
Transportation

80
Q

What factors affect logistical decisions?

A 
Specific product requirements 
Location of demand and supply
Size and type of product 
Nature of demand
Cost of modes of transport
Cost of storage
Lead time
81
Q

What are the benefits of internal logistics?

A 
Greater control
Cheaper in the long run
Don't rely on third party
Greater flexibility
Increases asset value
82
Q

What are the benefits of external logistics?

A 
Doesn't have a setup cost 
Predictable expenses 
Lower unit cost 
Specialist firm
Easier to adapt to demand
83
Q

Reshoring is …

A

the act of reintroducing domestic manufacturing/processes

84
Q

Offshoring is …

A

the process of relocating a business process from one country to another

85
Q

Outsourcing is …

A

an agreement where one company contracts out part of an internal process to another company

86
Q

What are some reasons for resourcing?

A

Shorter delivery times
Minimise risk in supply chain
Reduce complexity of supply chain
Easier to collaborate with domestic suppliers
Cost advantage of offshoring not as great as it once was

87
Q

What are the reasons for offshoring?

A 
Lowers cost 
Access skilled and higher quality labour
Use additional capacity
Take advantage of different laws
Move closer to target markets
88
Q

What are the disadvantages of offshoring?

A

Longer lead time
Additional management cost
Must consider exchange rates
communication barriers

89
Q

Reasons for outsourcing

A

Reduced cost
Improvement in quality
Meet changes in demand

90
Q

What is subcontracting?

A

When the production of a particular part of production is completed by another firm

91
Q

What are the advantages of subcontracting?

A

Reduction in cost
Increase in quality (specialized firm)
Allows for an increase in production

92
Q

What are the disadvantages of subcontracting?

A

Loss of control - reliant on another business
Risk lower quality
Potentially longer lead times

93
Q

What is quality?

A

It is meeting the needs and expectations of all customers

94
Q

What are the key aspects of quality?

A

Design, functionality, reliability, consistency, durability, after sales and value for money

95
Q

Why is quality important?

A

Increases competitiveness
Modern customers are knowledgeable and demanding
Customers are prepared to complain about poor quality
Customers are able to share information about quality

96
Q

What are the benefits of high quality?

A 
High customer loyalty
Customer satisfaction
Repeat purchases 
Customer recommendations
Lower marketing costs
97
Q

What is quality assurance?

A

The process that ensures production quality meets the requirements of customers

98
Q

What are the international standards for quality?

A

Kitemark
ISO 9000
Wool mark

99
Q

What are the costs of quality assurance implementation?

A

Staff training costs
Downtime between change
Demotivation from change
Recruitment costs

100
Q

What is quality benchmarking?

A

A general approach for a business to improve by looking at the best practice in the industry

101
Q

What is the formula for wastage rates?

A

No. of rejects/total produced * 100

102
Q

What is quality of control?

A

The process of inspecting products to ensure that they meet the required quality standards

103
Q

What is the difference between quality assurance and control?

A

Assurance is based on the processes and looks to make sure no defects occur and quality control is based on inspection and takes defects out

104
Q

What are the costs of poor quality?

A 
Bad reputaion
Loss of customers 
Cost to replace goods
Wasted materials
Less competitive
105
Q

What are serivices?

A

Activities that other people or businesses do for you

1 Business Studies (9 decks)

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