Unit Three: Business Opperations

Question 1

Factors of choosing suppliers

Answer 1

• price
• quality
• reliability

Question 2

Define procurement

Answer 2

Finding and buying things that a firm needs from suppliers outside of the firm

Question 3

Define logistics

Answer 3

Means getting getting goods or services from one part of the supply chain to another

Question 4

Describe the impact procurement and logistics has on a business

Answer 4

• can reduce the overall costs of a business
• reduces unit cost

Question 5

What are the factors of managing a supply chain?

Answer 5

1.) good relationship with suppliers
2.) finding the best price and value
3.) reducing waste and unnecessary costs

Question 6

Define job production

Answer 6

Making one thing at a time

Question 7

What is job production used for? + factors

Answer 7

• job production is used when a firm manufactures individual, unique products
• each product has a unique design based upon the customers specification
• these products require highly skilled labour
• expensive and take a long time to make

Question 8

Define flow production

Answer 8

Making lots of things continuously

Question 9

What is flow production used for/

Answer 9

• to gain from the economies of scale
• have a low average unit cost
• used for mass market production

Question 10

Define lean production? + factors

Answer 10

• a strategy businesses use to make production more efficient
• aims to use as few resources as possible and to have as little waste as possible

Question 11

Describe JIT (just in time)

Answer 11

• keep stock levels to the bare minimum - preferably zero
• raw materials are made into products as fast as possible

Question 12

Why is managing stock important?

Answer 12

• the more stock they have the more it costs to store , but if they have too little they risk running out

Question 13

What are the two methods to manage stock/

Answer 13

• just-in-time
• just- in-case

Question 14

Describe factors of just in time

Answer 14

• A way to manage stock
• reduces the cost of keeping stock
• requires coordination
• buy small quantities at a time
• they take frequent deliveries which can be costly
• if a delivery is missed could lead to the stock running out

Question 15

Describe factors of jus-in-case

Answer 15

• operating a production and distribution system with buffer stocks at every stage of the process
• if there is a problem with deliveries the buffer stock means there is still enough stock to satisfy demand so production can still continue
• the main problem is that firms can be left with big stockpiles of items which can be costly to the store