Resource Mangement Flashcards
What is Capacity Utilisation?
the extent to which the maximum capacity for output that is being used
What is the formula for Capacity Utilisation?
Current output
_________________. X 100
Maximum possible
Output
How can Capacity utilisation be improved?
- Increase demand through a price cut
- Special deals
- Making staff redundant
- Sell assets
- lease capacity to other businesses
What is stock control?
The flow of stock I’m a business, it concerns the ordering and management of raw materials, components, work in progress and finished goods
What are the implications of under-utilisation?
- Higher fixed cost per unit
- Unmotivated staff standing around, not busy
- Business may need to rationalise
- Increase flexibility of business
What are the implications of over-utilisation?
- Can damage reputation of the business
- In manufacturing it can put too much strain on resources
- Staff may do too much overtime and so have accidents when tired
- Means there is no time to maintain machinery or train staff
- Quality suffers as mistakes are made in production
What is the buffer stock level?
stocks which are held in case there is unforeseen rise in demand or a problem with supply
What are the advantages of bugger stocks?
• Holding buffer stocks means that a business can easily respond to changes in consumer demands
• Holding buffer stocks means that if the suppliers cannot deliver on time that production will not be affected
What are the implications of poor stock control?
- Loss of customer goodwill
- Loss of sales revenue
- Damage to reputation
- Disruption to production
What is just in time delivery?
A business orders and gets the stock delivered on the same day rather than keeping the stock in a warehouse
What are the advantages of JIT?
• As parts are ordered as they are needed there is no wastage
• Parts are not warehoused which is a massive cost saving in terms of premises and staff
• Stock is less likely to go out of date
• The business will improve their cash flow, as their money is not tied up in stock
What are the disadvantages of JIT?
• The business won’t be able to meet unpredicted surges in demand
• The business won’t be able to quickly replace damaged parts
• If the delivery does not turn up in time this can stop the whole production line, which is costly
What are the 7 deadly wastes?
- Over production
- Waiting time
- Transportation time
- Excess processing
- Excess stock
- Excess motion
- Product quality
What is the competitive advantage?
A feature that gives one business an edge over its rivals
What is competitiveness
The extent to which a firm can stand up to - or beat - its rivals
