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A level Business > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

What does the term ‘stock’ refer to?

A

Raw materials
Finished goods
Spares

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2
Q

Describe how lean production takes place

A

A techniques that aims to reduce waste in terms of time, space and resources.

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3
Q

Identify different types of waste

A

Over production
Defects
Transport -Moving resources around unnecessarily

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4
Q

How could a business reduce waste?

A

Avoid overproduction
Eliminate waiting time
Avoid errors/defect products
Avoid inefficiency
Avoid unnecessary movements
Reduce transports

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5
Q

Explain what ‘Just in time’ production is

A

Producing only what is required, in the correct quantity and at the correct time. Purchases/orders acts as a signal for when a product should be manufactured.

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6
Q

Identify the advantages of ‘just in time’ production

A

+ Less stock means less storage space is needed which saves rent and insurance costs.
+ Smaller likelihood of stock perishing/becoming out of date
+ Avoids the build-up of unsold product which could occur with changes in demand
+ Greater flexibility in terms of responding to changes in trends

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7
Q

Identify the disadvantage of just in time production

A
  • No room for mistakes due to minimal stock.
  • If suppliers do not deliver stock on time, the whole production schedule can be delayed.
  • Not flexible a there is no spare product available to meet unexpected orders.
  • Economies of scale cannot be achieved
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8
Q

Why would Kaizen empower staff?

A

Staff could make suggestion on how their work could be improved. Employees contribute to efficient changes. Once changes are implemented the employee could feel hear/empowered. Suggest practical solutions.

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9
Q

Explain what is meant by the term Kaizen

A

Continuous improvements. Constantly introducing small changes to improve quality and/or efficiency.

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10
Q

Explain why ‘just in time’ production could be good for offering a USP?

A

JIT production would be good for offering a USP because the business wouldn’t have unsold stock to sell first before producing the new trendy product. This also mean that the new trendy products would be produced faster than mass production for example.

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11
Q

Explain what is meant by the term ‘added value’ and give an examples of how this is implemented.

A

Added value occurs when the value of a product’s final output is greater than all the inputs together.

For example, added value could be implemented through selling pineapple; the final pineapple product sold to the customer could be cut, sold in packaging with a fork inside it. The business can sell the pineapple for more than what they bought it for due to these convenient added features.

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12
Q

Identify potential operational objectives (targets set for production)

A
  • Reduce unit cost
  • Dependability
  • Flexibility
  • Environmental objectives - minimising waste
  • Quality targets - lower returns, complaints
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13
Q

Identify potential external influences on operational objectives

A
  • Competitors: increasing pressure on businesses in terms of price, quality and cost.
  • Political: potential changes in legislation from government
  • Economical: prepared for responsive changes in the economy as demand will fluctuate
  • Technological: consumers way prefer online version of a product
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14
Q

Identify potential Internal influences on operational objectives

A
  • Finance: is capital readily available
  • Human resources: skill of work force determine quality
  • Marketing: determine what has to be produced and the quantities
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15
Q

Identify methods which analyse the operational performance of a business

A

Capacity
Capacity utilisation
Labour productivity
Unit cost

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16
Q

Identify what the optimal level of capacity utilisation fora business would be

A

80-90% cap utilisation

As close to 100% as possible

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17
Q

How is capacity utilisation calculated?

A

Actual output / maximum possible output X100

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18
Q

How is Labour productivity calculated?

A

Output / number of employees

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19
Q

How is Unit cost calculated?

A

total cost / units of output

20
Q

Unit cost ___ as productivity falls

A

Unit cost rises as productivity falls

21
Q

Describe what is meant by increasing operational efficiency and identify what it enables a business to do

A

Getting more output from a given level of resources. Then unit cost falls enabling the business to charge more competitive prices.

22
Q

unit cost ___ as capacity utilisation increases

A

unit cost falls as capacity utilisation increases

23
Q

Explain why a business would not want to work at 100% capacity utilisation?

A
  • Reduced flexibility
  • Pressure on work force = decrease motivation or errors
  • Pressure on machinery if maintenance was not done
24
Q

Identify why operating at a low capacity utilisation would not be beneficial?

A

A lot of spare/excess capacity not being used such as resources or factory space, equipment and labour is not being efficient. Causes for a lot of waste.

25
Q

Explain how labour productivity and efficiency could be increased

A
  • Investment in technology: improve quality and reliability of a product
  • Provide training to increase motivation and skills
  • Job redesign: changing the content of a job in terms of duties and responsibilities.
  • Reduce size of labour force: productivity will improve if the same level of output is achieved.
26
Q

Identify potential disadvantages of increasing labour productivity

A
  • Cost: of training, new technology
  • Resistance of employees: they could be resistant to the change and concerned about job security as new technology is being introduced.
  • Quality: improve labour productivity should not be achieved at the expense of quality
27
Q

What resources are required for production?

A

Land
Labour
Capital
Enterprise - skill of combining these factors

28
Q

Identify the difference between a capital and labour intensive industry and give an example.

A

Capital intensive approach to production: greater emphasis on capital equipment used than labour. Require a larger amount of capital than labour.

Labour intensive approach to production: placing a greater emphasis on labour than capital equipment. Require a larger proportion of labour than capital.

29
Q

How may a business overcome a lack capacity utilisation

A

Outsourcing: transferring portions of work to an outside suppliers so they could do the job.
Reducing demand: could be achieved by increasing price

Reducing demand by increasing price

30
Q

Identify reasons explaining why a good quality product is important

A
  • Acts as a USP
  • Allows the business to charge higher prices
  • Increase sales
  • Brand loyalty/reputation
31
Q

Explain methods that implemented to improve quality

A

Quality assurance: ensuring that the entire operations process meets the required quality standards.

Quality management: the culture of quality throughout the organisation. Involved random quality checks and aims for zero defect products.

32
Q

Describe the difference between a supply chain and a distribution channel.

A

A supply chain involves everything from the delivery of materials (from the supplier) to the manufacturer and finally to the consumer.

A distribution channel is only concerned with delivering the finished product from the manufacturer to the consumer.

33
Q

Explain the term ‘flexibility’

A

The ability to meet customers needs quickly

34
Q

Explain the term ‘mass customisation’

A

Tailoring products to the specific customer requirements.

35
Q

Identify why a business’s speed of response and dependability is important

A

Competitive advantage.
Customer satisfaction causing them to remain loyalty

36
Q

How could demand be managed?

A
  • Increasing or decreasing prices
  • Increasing or reducing advertising
  • Sales promotion
37
Q

How can supply be managed?

A

By having a flexible workforce such as part time/zero hour employees. Increasing capacity in a growing market will be beneficial in the future. Outsourcing to produce the extra demand aids in managing supply.

38
Q

What aspects may influence a business’s choice of suppliers?

A

Dependability
Flexibility
Quality
Price
Ethics

39
Q

Identify potential advantages of outsourcing

A

+ Quicker response to increase demand
+ Greater dependability for customers during periods of increased demand
+ Temporary increase in demand/seasonal demand
= by outsourcing it could lower costs

40
Q

Identify potential disadvantages of outsourcing

A
  • Quality may suffer
  • Reliability of suppliers are not guaranteed
  • More costly than producing in house
41
Q

Explain what is meant by ‘dynamic pricing’

A

A strategy where businesses changes their prices when there is a change of demand.

42
Q

Identify the types of technology that could be useful in improving operational efficiency

A
  • Computer systems: for accurate and efficient stock control
  • Internet: to communicate with customers
  • Computer aided manufacture (CAM): robots used in the making of a product
  • Computer aided design (CAD): use of computer to aid in the creation/design of a product
43
Q

Explain what is meany by the term ‘inventory’

A

The stock a business hold - raw materials, components, work in progress and finished goods

44
Q

Identify what factors may influence the amount of inventory held

A

Nature of the good: is it perishable
Nature of production: JIT means lower stock levels
Nature of demand: seasonal or regular demand
Opportunity cost: any money in stick could be better used else where

45
Q

Describe and explain the features mentions on an inventory control chart

A

Y axis: amount of stock in units.
X axis: time.
Buffer level: minimum amount of stock.
Reorder level: indicates when a new order of inventory should be placed.
Lead time: the time from placing an order of inventory to receiving it.
Maximum stock level: the maximum amount of inventory a business can hold.
Reorder quantity: the amount of inventory ordered.

A level Business (10 decks)

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