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Business Studies Unit 3 > Topic 4 > Flashcards

Topic 4 Flashcards

1
Q

Name the 6 main operational objectives

A 
Quality
Cost
Volume
Innovation
Efficiency
Environmental
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2
Q

In what 5 ways is quality perceived?

A 
Performance
Functionality
Predicted life
Standards and requirements
Perceived quality
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3
Q

What are the 4 main costs involved in operations?

A

Manufacturing costs
Provision of service costs
Running costs
Servicing costs

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4
Q

What is meant by volume targets?

A

the number of units produced and flexibility to meet demand
Helps to achieve economies of scale and cost targets
Resource mix influences flexibility possible

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5
Q

How can innovation targets be met?

A

Launching new products/processes by a better/more efficient method of production
May reduce long term costs and increase volume and quality

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6
Q

What are efficiency targets?

A

Sets minimum acceptable standards
Measure efficiency by added value
Being efficient means maximising output and minimising costs
Control machinery usage, stock wastage and labour productivity

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7
Q

What are environmental targets?

A

Must be aware of impact on environment, must try to reduce negative impacts

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8
Q

What is benchmarking?

A

Increase performance by identifying, investigating and adapting aspects of best practice from other firms
Requires time, money, commitment and an open relationship between 2 organisations

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9
Q

Name 6 internal influences on operational objectives

A 
Finance
Corporate objectives
Available resources
Nature of the product
Human resources
Company traditions
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10
Q

Name 6 external influences on operational objectives?

A 
Competitors performance
Demographics
Technology
Market conditions
Competitors
Consumers
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11
Q

What are economies of scale?

A

Benefits of large scale operations by a fall in average costs - creates a competitive advantage and barriers to entry

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12
Q

What are purchasing economies of scale?

A

Buying in bulk and getting better deals with suppliers

Suppliers want larger orders so give better terms and discounts - convenience

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13
Q

What are financial economies of scale?

A

Easier credit/availability of loans

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14
Q

What are technological economies of scale?

A

Ability to buy technically advanced equipment but able to spread the cost over more units
Invest in equipment to operate more efficiently
May reduce staff

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15
Q

What are specialisation economies of scale?

A

Ability to employ specialists/staff which only focus on one area as can invest more - charge more
Cheaper than using external services

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16
Q

What are diseconomies of scale?

A

Disadvantages experienced as a result of operating beyond optimum output - results in rising costs
Occurs when one factor of production has run out: land/labour/capital/enterprise

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17
Q

What are communication diseconomies of scale?

A

Breakdown in effective communication due to expansion of operation
When efficiency falls, costs rise
Essential to invest in sophisticated communication channels
Extra problems if multinational

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18
Q

What are co-ordination diseconomies of scale?

A

Breakdown in co-ordination due to size
Co-ordination is difficult with more staff and resources
Difficult to motivate and make sure everyone is working to same objectives

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19
Q

What is the resource mix of operations?

A

Combination of capital and human resources which allows for greatest efficiency

20
Q

Name 4 advantages of being a capital intensive business

A

Reduction in human error
Greater speed and uniformity in output
Ease of workforce planning
More scope for economies of scale

21
Q

Name 4 disadvantages of being a capital intensive business

A

high initial capital needed
Loans - interest rates
Lack of initiative
Lack flexibility to respond to falling demand

22
Q

Name 5 advantages of being a labour intensive business

A 
Greater flexibility
Creates employment for the economy
Personal response to consumer needs
Tailor to meet individual consumer needs
Opportunity for continuous improvement
23
Q

Name 3 disadvantages of being a labour intensive business

A

Prone to labour relation problems
Possible workforce shortages
High HRM costs

24
Q

What are the 7 steps in the process of R&D?

A 
idea generation
Idea screening
Concept testing
Development of ideas
Business analysis
Product development
Test marketing
25
Q

What 4 things does R&D allow to do?

A

Develop new products
New material
Improve existing products
Improve production processes

26
Q

What is the purpose of R&D?

A

keep products at a competitive advantage and charge premium price - helps gain market share

27
Q

Practical implementation of the results of R&D creates an innovation, what are 4 risks of innovation?

A

Heavy time and resource commitment but no guaranteed success
Potential loss of focus on core function of business
Competitors reaction
Company image and reputation if product fails

28
Q

What are 4 potential rewards of innovation?

A

develop USP - competitive advantage
Charge high prices
Improve efficiency of production
Improve reputation

29
Q

What is the impact of innovation on the marketing function?

A

inform R&D of potential niche/consumer opinions
HAs major role in getting product to consumers and designing an effective marketing mix in order to achieve sales targets

30
Q

What is the impact of innovation on the finance function?

A

Budgets
During business analysis stage - involved in costing products and looking at pricing structures and potential profit levels

31
Q

Impact of innovation on HR function?

A

Workforce planning issues

May need new skilled workers/reduced force

32
Q

What are the 3 key characteristics of location decisions?

A

Strategic nature
Difficult to reverse due to cost
Decision made at highest level

33
Q

Name 5 drawbacks of poor location decisions

A

High fixed costs affect profits
High variable costs reduce competitiveness
Low unemployment means higher staff turnover
High unemployment means low demand
Poor transport means no access

34
Q

Name 5 quantitative factors concerned in making location decisions

A 
Site and capital costs
Labour costs
Transport costs
Potential revenue
Government grants
35
Q

Name 5 qualitative factors concerned in making location decisions

A 
Safety
Room for expansion
Preferences
Ethical considerations
IT infrastructure
36
Q

Give 4 advantages of multisite locations

A

Greater convenience to customers
Lower transport costs
Reduce risk of supply disruption
Opportunity to delegate authority

37
Q

Give 3 disadvantages of multisite locations

A

Co-ordination and communication problems
Potential lack of control and direction
Different cultural legal systems

38
Q

Give 5 reasons in support of offshoring

A 
Cost reduction
Access to global markets
Avoidance of protectionist trade barriers
Government financial support
Better skilled labour
39
Q

Give 5 issues with offshoring

A 
Language and communication barriers
Cultural differences
Level of service concerns
Supply chain concerns
Ethical considerations
40
Q

What are the 3 main lean techniques to reduce waste?

A

Just in Time production
Time based management
Kaizen system

41
Q

What is Just in Time production?

A

limits stock holding at each stage of production
Reduces costs - less physical need to hold and handle stock - less waste obsolete stock
Risky if long supply chain

42
Q

What is Kaizen?

A

Improving efficiency and performance by continual improvement
Requires all staff to feel empowered by ability to spot opportunities and recommend improvements
Creates motivation and improves efficiency
Easier to implement smaller changes

43
Q

What is time based management?

A

Managing resources effectively to ensure products are fit for market in the shortest time possible
To be effective staff must be trained and flexible to perform many tasks

44
Q

Give 3 benefits of time based management

A

Quicker time to market for new products
Shorter lead times
Improved ability to respond to changes in market conditions and consumer tastes

45
Q

What is Critical Path Analysis?

A

A network to plan complex projects in shortest time by finding tasks that can be completed simultaneously
Critical path identifies the activities dependent on completion of earlier activities
Non-critical activities have float times

46
Q

Give 8 benefits of Critical Path Analysis

A 
Reduces risk and costs
Allows to fully consider whole project
Used to plan, monitor and make decisions
Helps find earliest times for JIT production
Allocate resources effectively 
Tasks can be allocated to staff appropriately
Clear targets are motivational
Helps financial planning
47
Q

Give 5 drawbacks of Critical Path Analysis

A

Based on estimates - limited reliability
Must be monitored closely and corrective actions taken
Ongoing process
Resources may not be flexible
Too many activities make it too complicated

Business Studies Unit 3 (5 decks)

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