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AS Business Studies Theme 2 > Stock control and quality management > Flashcards

Stock control and quality management Flashcards

1
Q

Define STOCK

A

Stock represents the raw materials, works in progress and finished products that a business holds in order to enable production and meet customer needs.

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2
Q

What are the main reasons that businesses hold stock?

A
  • To enable production
  • To meet customer needs
  • To protect against issues with suppliers
  • To prepare for seasonal changes in demand
  • Provides a buffer between production processes.
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3
Q

What are the main influences on the amount of stock held?

A
  • Need to satsify demand
  • Need to manage working capital
  • Risk of stock losing value
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4
Q

What are the costs of holding stock?

A
  • Storage costs
  • Interest costs
  • Risk of obsolescence
  • Stock out costs
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5
Q

What are the components of a stock control diagram?

A
  • Maximum stock level
  • Minimum sotck level
  • Buffer stock
  • Lead time
  • Reorder level
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6
Q

What are the advantages of buffer stock?

A
  • Can meet unexpected demand

- Can continue with production even if there is an issue with suppliers/delivery

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7
Q

What are the disadvantages of buffer stock?

A
  • Money is held in stock
  • Costs associated in sotck holding
  • Risk of waste
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8
Q

What are the implications of poor stock control?

A
  • Waste of resources
  • Unable to meet customer needs
  • Damaged reputation
  • Under utilisation of other resources (e.g. labour or machinery)
  • Lower levels of competitiveness
  • Difficulty in valuing stock
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9
Q

Define LEAN PRODUCTION

A

Lean production is a production method in which the main focus is on waste minimisation whilst retaining or improving quality.

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10
Q

Define JUST IN TIME

A

Just in time is a technique used to minimise stock holdings at each stage of the production process, helping to minimise costs.

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11
Q

Define KAIZEN

A

Kaizen is the technique of continuous improvement. Small, frequent improvements are made in every aspect of the production process, involving all employees.

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12
Q

What are the advantages of JIT?

A
  • Lower costs associated with holding inventory
  • Less working capital required
  • Less obsolete/ruined inventory
  • Lower associated costs (security/insurance)
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13
Q

What are the disadvantages of JIT?

A
  • Little room for error
  • Very reliant on suppliers –> delays in deliveries can cause production to stop
  • Unexpected orders are harder to meet
  • High initial set up costs
  • Complex systems must be implemented and understood
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14
Q

Define QUALITY

A

Quality is the extent to which a product meets the needs and expectations of a customer.

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15
Q

How can quality be measured?

A
  • Customer service ratings
  • Product return levels
  • Number of warranty claims
  • Level of rejected output from production
  • Levels of repeat business
  • Market surveys
  • Profit margins
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16
Q

How can quality be improved?

A
  • Understanding customer expectations
  • Training employees and improving motivation as a consequence
  • Using technology
  • Working more closely with suppliers to get higher quality raw materials
  • Changing quality systems (quality assurance/control/circles/TQM)
17
Q

Define QUALITY CONTROL

A

Quality control is a system based on inspection at the end of the production process, where defective products are removed.

18
Q

Define QUALITY ASSURANCE

A

Quality assurance is a system based on process during production, ensuring that quality is built in at every stage. It is customer led, and aims to meets their needs effectively.

19
Q

What are the advantages of quality control?

A
  • Quality can be monitored
  • Stops faulty products reaching the customer
  • Common problems can be identified
  • Inspector takes responsibility
20
Q

What are the disadvantages of quality control?

A
  • Takes responsibility away from operatives
  • Requires specialist/additional staff at the end of the process
  • Problems are only identified at the end of the process and so waste levels may be high.
21
Q

What are the advantages of quality assurance?

A
  • Spots any faults early, reducing waste
  • Motivates workers who are responsible for the quality standards
  • Aims to achieve 0 defects
  • Enhances the reputation of the company
22
Q

What are the disadvantages of quality assurance?

A
  • Requires high levels staff training
  • High levels of staff commitment are needed for them to self-check their work
  • Can slow down the production process, leading to lower output and higher unit costs
  • May demotivate workers who feel under pressure
  • Can be expensive/time consuming to implement
23
Q

Define QUALITY CIRCLES

A

Quality circles are informal groups of workers who volunteer to meet on a regular basis to discuss issues relating to the workplace and how to improve quality. Recommendations are fed back to managers.

24
Q

Define TOTAL QUALITY MANAGEMENT

A

TQM is a management philosophy committed to a focus on continuous improvements of products and services with the involvement of the whole workforce. TQM is an attitude and so every worker is concerned with quality at each stage of the production process.

25
Q

What are the advantages of TQM?

A
  • Puts customers at the heart of the production process
  • Motivational for workers who have responsibility
  • Reduces waste
  • Eliminates the costs involved in inspectors
26
Q

What are the disadvantages of TQM?

A
  • Requires stong leadership
  • Substantial investment required for training and support
  • Disruption and costs may outweigh the benefits
  • May become bureaucratic
27
Q

Why is quality so important?

A
  • Markets are highly competitive
  • Customers are now more knowledgeable and demanding
  • May become a competitive advantage
28
Q

What are the benefits of higher quality?

A
  • Customer satisfaction
  • Repeat purchasers are more likely
  • Customer recommendations will increase
  • Lower marketing costs
  • Higher customer loyalty

AS Business Studies Theme 2 (16 decks)

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