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Business > Unit 3 Business Operations > Flashcards

Unit 3 Business Operations Flashcards

1
Q

What is efficiency

A

How well a business uses its recourses to produce a product-Average unit cost
Lower AUC = More efficient

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2
Q

What are the 4 ways of becoming more efficient

A

Economies of scale
Lean production
Just in time
Kaizen

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3
Q

What is lean production

A

Reducing waste whilst ensuring quality

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4
Q

Name some types of waste

A

Over production
Waiting time
Transport
Stock expiring
Motion-Production line
Defects

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5
Q

What is just in time

A

Stock arrives just when it is needed

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6
Q

What is kaizen

A

Small continuous improvements within a business
Employees are encouraged to to suggest improvements as they deal with the processes on a daily basis

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7
Q

What are the benefits of kaizen

A

Improves quality and efficiency
Easier to implement as ideas come from employees
Improves motivation and productivity
Improves staff retention

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8
Q

What is production

A

The process of turning raw materials into good and services that can be sold

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9
Q

What are the 2 types of production

A

Job production Flow production

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10
Q

What is job production

A

A product is produced that meets specific customer requirements
Labour intensive

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11
Q

What is flow production

A

The continuous movement of items through the production process, uses production lines
Capital intensive

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12
Q

What are the benefits of job production

A

Produces high quality products
Made to meet specific requirements of each customer
Higher prices can be charged
Greater job satisfaction for workers
Business may find it easier to differentiate itself from rivals

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13
Q

What are the drawbacks of job production

A

Unit costs are higher
Labour intensive process
Requires high skilled employees who may demand higher wages

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14
Q

What are the benefits of flow production

A

Can produce on a larger scale
Less labour intensive
Workers can specialise and become more efficient
Production lines can run 24/7 - Higher output
Consistent standard quality
Lower unit costs

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15
Q

What are the drawbacks to flow production

A

Inflexible due to use of machinery
Jobs are repetitive-Lower staff motivation
Initial set up costs can be high
Machines breaking down can result in lost time
Lower skilled labourers required-Higher staff turnover
Products may be too similar to rivals

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16
Q

What is procurement

A

Managing the ordering and receit of goods and services in the business

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17
Q

What does procurement involve

A

Deciding what is needed
Selecting suppliers
Terms of payment
Negotiating contracts with suppliers
Managing how goods are ordered and received
Managing logistics

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18
Q

What is logistics

A

A process which plans implements and controls the distribution of goods and services from when they are received from the suppliers to when they are delivered to customers (Transport)

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19
Q

What is Just in time

A

Minimum amount of stocks of raw materials and finished good are held by the business

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20
Q

What is just in case

A

Business holds buffer stock and raw materials in case there is a delivery issue of change in demand

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21
Q

What are the benefits of Just in time

A

Less storage space is required reducing costs
Less money is tied up in stock- Improves cash flow
Products are less likely to perish or become obsolete
Avoids being left with stock that cannot be sold due to decrease in demand

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22
Q

What are the problems of just in time

A

No spare stock if mistakes occur or there is a sudden increase in demand
Reliant of suppliers being on time
No benefits of economies of scale from bulk buying

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23
Q

What are the 4 key evaluation points for Just in case

A

Careful planning is required
Works well when demand is consistent
Good relationships with suppliers is essential
Works if suppliers are nearby

24
Q

When is just in case often used

A

When demand is unpredictable
Suppliers are not nearby
Storage is not expensive

25
Q

What are the benefits of just in case

A

Stock is available for reworking faulty products or meet increase in demand
Production is less reliant on suppliers so if stock is not delivered production will not stop
Spare finished products are available to meet unexpected orders which can increase level of customer service
Economies of scale available from bulk buying

26
Q

What are the problems of just in case

A

Needs more storage space which increases costs
Money is tied up in stock so not available for other purchases
Stock may go out of date or out of demand-Loss of profit
Build up of unsold products leading to higher stockholding costs

27
Q

What are the factors affecting choice of supplier

A

QUALITY
PRICE
RELIABILITY
Customers
Cash flow
Speed
Location
Rivals
Gov policy

28
Q

How does price affect choosing suppliers

A

Cheaper supplier can increase profit margins

Allow business to reduce prices
Important in competitive market
But cheaper supplier may affect quality

29
Q

How does quality affect choosing suppliers

A

Good quality raw materials = Good quality product = Higher customer satisfaction
But higher quality = Higher prices

30
Q

How does reliability affect choosing suppliers

A

Knowing supplier will meet deadlines and quality requirements is important
Especially when using JIT

31
Q

Why are suppliers important

A

To meet needs and wants of customers business needs effective supply chain
Suppliers determine may costs of the business
Suppliers are closely linked to quality
Effective relationships with suppliers are essential for lean production

32
Q

What are the effects of procurement and logistics

A

Efficiency
Lower unit costs

33
Q

What is the supply chain

A

The network of organisation that gets products to customers

34
Q

What is supply chain management

A

Ensures the right quantity of goods are in the right place at the right time and these are provided at the right quality and at a price that represents value for money

35
Q

What are the benefits of supply chain management

A

Increased efficiency-Dispatch times can be reduced
Lower unit costs- Negotiate prices with suppliers
Competitive advantage-Cost saving can be passed on to customers through lower prices or business can have larger profit margins
Improved flexibility-Members of supply chain can work together

36
Q

What are the drawbacks of supply chain management

A

Quality may suffer if prices are driven down too low
Sophisticated IT systems to monitor supply chain can be expensive to implement

37
Q

What is quality

A

A products is good quality if it meets expectations of customer

38
Q

What are the consequences of quality issues

A

Loss of customers-Dissatisfaction
Damaged reputation
Costs of recalling, scraping or remaking
Costs of replacements or refunds
Costs of reducing prices of products no ones buying
Legal action may be taken

39
Q

Why is quality important

A

Markets are highly competitive
Customers today are more knowledgeable, demanding, prepared to complain and able to share information quickly through social media

40
Q

How do we judge quality

A

Design
Functionality
Reliability
Consistency
Durability
Good after sale service
Price/Value for money

41
Q

What are the benefits of good quality products

A

Customer satisfaction
Repeat purchases
Customer recommendation
Lower marketing costs
Higher customer loyalty
Price insensitivity

42
Q

What is quality control QC

A

A traditional method in manufacturing.
All or a sample of products are checked at THE END of the production process

43
Q

What are the pros of QC

A

Protects standard of products
Customers in theory will not receive substandard products

44
Q

What are the cons of QC

A

Wasteful as products which do not need standards are thrown away
Workers are less likely to take responsibility for errors
Costs of inspectors is high

45
Q

What is quality assurance QA

A

The process of ensuring products meet specified requirements and standards that satisfy customer expectations

46
Q

What are the pros of QA

A

Better quality-Makes sure products are good by fixing products
Saves money-Helps find and fix issues early preventing expensive mistakes

47
Q

What are the cons of QA

A

Time consuming process, it slows production down because thorough manuals are created and checks throughout the process are conducted
Involves investments in tools training and personnel which can be expensive

48
Q

What is Total quality management TQM

A

Method of maintaining consistent quality
Quality assurance approach where all employees have the target of zero defects and responsible for quality

49
Q

What are the advantages of TQM

A

Quality is embedded into business therefore few quality issues
AUC reduced leading to increased efficiency
Improved employee motivation
Better relationship between employees and managers resulting in higher productivity
Quality improvements can be easier to implement as all staff are part of TQM process

50
Q

What are the costs of TQM

A

Costs of maintaining consistent levels of quality
Costs of training
Time used for quality circle meetings
Reputation may be damaged if quality standards are not met by outsourcing partners

51
Q

What are the 3 methods of good service

A

Know your product or service
Engage with customer
Good post sales service

52
Q

What are the benefits of good customer service

A

Increased sales
Customer retention/Loyalty
Word of mouth promotion
Enhances public image
More effective work force
Lower costs
Improved profitability

53
Q

What are the consequences of poor customer service

A

Loss of loyalty
Loss of sales
Customers may not report problems
Unhappy customers spread the word

54
Q

Why are websites good for customer service

A

Provides accurate product information
FAQs, location, opening hours, stock availability
Advertise to a wider market
Contact us = Customer engagement

55
Q

Why is ecommerce good for customer service

A

Convenience- Any time any where
Can see reviews
Access to online support
Prices may be lower online as businesses do not pay expensive high-street rent

56
Q

Why is social media good for a business

A

Provides a quick way to communicate with large numbers of customers
Helps raise awareness of business
Easy way to monitor satisfaction and collect feedback
Promotes customer engagement

Business (2 decks)

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