TOPIC 2.3 Making operational decisions Flashcards
The production process
Inputs – transformation – outputs
Job production
when production of a product meets specific customer requirements
Flow production
continuous movement of items through the production process
Productivity
the amount produced (output) for a given number of employees (input)
Improving productivity
replaces workers with capital
- recruit staff correctly initially
- appropriately train staff
- motivate staff eg financially, non financially
- invest in up to date capital
- review working practices
Just in time stock control
minimum amounts of stocks of raw materials and finished goods held by a business
Just in case stock control
holding buffer stock just in case there’s a problem/ unexpected demand
Lead time
the time between placing an order and receiving the delivery
Procurement
the whole process of managing the ordering and receipt of the goods/services in the business
Supplier
a business or individual who provides the raw materials or goods/services to a business
Factors affecting choice of supplier
- quality
- cost
- availability
- delivery
- speed
- customers
Logistics
a process which plans, implements and controls the distribution and storage of goods/services from when they are received from the supplier to customer delivery
Quality control
traditional method of checking a product/ sample of product at the end
Quality assurance
where every member of staff is responsible for quality along production line
Bespoke
A product or service that is designed and made for an individual customer.
Economics of Scale
Where average costs fall as the business produces more eg buying in bulk.
Automation
using machinery or robotics to do jobs instead of using people to do them.
Downtime
The time when a person or machine is not producing anything. Businesses will try to minimise this.
Re-order level
The point at which the business knows to re-order stock. eg 200 bottles of Coke
Buffer stock
The lowest level of stock kept, tends to be just for emergencies.
Quality Marks
Recognition from a professional body eg the Kitemark. Its presence may reassure customers or quality.
E-tailing
Selling products and services to customers through a website.
Post-sales service
The service given after purchase eg warranties and services
