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Edexcel GCSE Business > Making operational decisions > Flashcards

Making operational decisions Flashcards

1
Q

production

A

transformation of resources into finished goods or services

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2
Q

goods

A

physical products

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3
Q

services

A

non-physical items

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4
Q

methods of production

A

job production
batch production
flow production

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5
Q

what factors do the method of production used by a business depend on?

A

level of output
nature of product
wether product is standardised or customised
level of automations used in production

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6
Q

job production

A

manufacturers produce one product at a time as ordered by the customer

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7
Q

job production advantages

A

high quality product
motivated and highly skilled workers
customised products can be produced

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8
Q

job production disadvantages

A

production is slow
labour costs are high

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9
Q

flow production

A

continuous manufacturing of standardised products, usually on a production line

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10
Q

flow production advantages

A

low unit cost due to economies of scale
rapid production usually highly automated

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11
Q

flow production disadvantages

A

customisation is difficult
capital equipment can be expensive to purchase

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12
Q

batch production

A

groups of the same product are produced as a batch

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13
Q

batch production advantages

A

workers can specialise
production can take place as the previous batch starts running out

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14
Q

batch production disadvantages

A

requires careful coordination to avoid shortages
money is tied up in stock
completed products need to be stored

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15
Q

flexibility in production

A

how easy it is to install machinery and switch to different machinery which is required to manufacture different products

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16
Q

3D printers

A

digital design is uploaded and the printer produces the product with minimal labour costs

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17
Q

impact of new technology on cost

A

with 3D printing, cost of manufacturing is reduced as there is no need for expensive tooling

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18
Q

impact of new technology on productivity

A

with 3D printing, products can be produced quickly and easily, with minimal lead times
allows business to bring new products to market faster and respond more quickly to changing customer preferences

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19
Q

impact of new technology on quality

A

3D printer allows for precise and accurate production of complex shapes and designs, resulting in higher quality products

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20
Q

impact of new technology on flexibility

A

3D printing products can easily be customised to meet the specific needs of customers

3D printing allows for small production runs which reduces the costs of specific job production

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21
Q

maximum stock level

A

maximum amount of stock a business is able to hold in normal circumstances

22
Q

reorder level

A

level at which a business places a new order with its suppliers

23
Q

minimum stock level/buffer stock

A

lowest level at which a business is willing to allow stock levels to fall

24
Q

lead time

A

length of time from the point of stock being ordered from the supplier to it being delivered

25
Q

factors that can influence the efficiency of raw material procurement

A

quality of raw materials
cost of raw materials
delivery ( costs, speed, reliability )
relationship with suppliers
availability of raw materials

26
Q

factors that influence the process of sourcing raw materials - quality

A

if raw materials are of poor quality, then final product may not meet the desired standards

27
Q

factors that influence the process of sourcing raw materials - delivery

A

companies need to ensure that their raw materials are delivered on time, at a reasonable cost, and in a reliable manner

many companies are now using an order and delivery process called just in time

28
Q

factors that influence the process of sourcing raw materials - availability

A

companies need to ensure that raw materials they need are readily available

29
Q

factors that influence the process of sourcing raw materials - costs

A

companies need to ensure that they are getting the best possible price for their raw materials without sacrificing quality

30
Q

factors that influence the process of sourcing raw materials - trust

A

companies need to ensure that they are working with reliable suppliers who can deliver quality materials on time and at a reasonable cost

31
Q

Just in Time (JIT) stock management

A

process in which raw materials are not stored onsite but ordered as required and delivered by suppliers
‘just in time’ to be used

32
Q

advantages of JIT stock management

A

stockholding costs are minimised

working relationships developed w small number of trusted suppliers

cash flow is improved as money is not tied up in stocks

unused storage space is available for productive use

teamwork is encouraged so employee motivation is likely to be improved

33
Q

disadvantages of JIT stock management

A

ability to respond to unexpected increases in demand is reduced

administrative costs related to frequent ordering are increased

unreliable suppliers can quickly halt production

34
Q

quality control

A

inspecting the quality of output at the end of the production process

35
Q

quality control benefits

A

quality specialists are employed to check standards

inexpensive, simple way to check output is fit for purpose

36
Q

quality control drawbacks

A

rejection of finished good is significant waste of resources

little focus on cause of defects

37
Q

quality assurance benefits

A

issues are identified early so products can be reworked

cause of defects is focus so future quality issues may be prevented

controlling quality throughout the production process can be expensive but reduces costs ultimately because defects don’t have to be dealt with

38
Q

quality assurance

A

inspecting quality throughout the process

39
Q

quality assurance drawbacks

A

staff training and a skilled workforce required so labour costs may be increased

reworking may lengthen the production process

40
Q

competitive advantage from quality management

A

unit costs are likely to be low if business takes a preventative approach - low costs may allow a business to reduce its selling price to better compete w or undercut its rivals

increased finance may be available to fund marketing activity to improve brand recognition and attract new customers

high level of quality can be used in promotional activity and provide a USP - ease expansion into new. markets asa result of the positive reputation it creates

41
Q

steps in sales process

A

gain customer interest
provide speedy and efficient service
engage the customer
provide post-sales service
achieve customer loyalty

42
Q

Gain customer interest - explanation

A

must make customer aware of product through marketing activities

may also be gained through product knowledge

43
Q

provide speedy and efficient service - explanation

A

must be flexible to take orders, produce and deliver to customers promptly

44
Q

product knowledge

A

salesperson needs to be able to talk confidently about product features and be capable of answering questions and making recommendations.

45
Q

how can speed and efficiency be improved ?

A

delivering & installing products for customers

allowing customers to choose a convenient delivery method

making online platforms easy to use

reducing queues at checkouts

providing a range of way for customers to contact the business

46
Q

engage the customer - explanation

A

regular communication with customer
customised items may also need customer approval before they are manufactured

47
Q

provide post-sales service - explanation

A

support given to customers after the purchase of a product
can include - support in using product
- dealing w complaints
- providing servicing or repairs

some elements can be included within the product package

48
Q

achieve customer loyalty - explanation

A

important as it leads to repeat sales and valuable word-of-mouth reviews

49
Q

importance of customer service

A

generates customer loyalty —-> drives repeat purchases —> helps firm reduce marketing costs when launching new products

50
Q

How businesses develop customer loyalty - customer service

A

when they have a positive experience, more likely to return and recommend business to others

51
Q

How businesses develop customer loyalty - loyalty cards

A

popular way for businesses to encourage repeat customers

offer rewards or discounts for frequent purchases

52
Q

How businesses develop customer loyalty - savers schemes

A

offer discounts or special pricing for customers who save money with them

helps customers gradually save up money that can be used at periods when food bills are usually higher e.g. Christmas

Edexcel GCSE Business (9 decks)

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