2.3 - Making operational Decisions

Question 1

What does business operations mean

Answer 1

The part of the business that provides customers with the goods or services that they ordered

Question 2

What is operations responsible for

Answer 2

Taking resources such as raw materials, finance and workforce and using them to create finished goods or services

They then ensure that these arrive on time and at the right quality standard

Question 3

How are operations defined in relation to goods

Answer 3

When products are produced in a factory, everything that happens within the factory, from making goods to delivering goods, is classed as operations.

Question 4

How are operations defined in relation to services

Answer 4

When a business provides a service, the processes it uses are known as operations.

Question 5

What are the 3 different production processes

Answer 5

• Job production
• Batch production
• Flow production

Question 6

What is job production

Answer 6

when individual products are made one at a time to meet specific customer preferences

Question 7

What is batch production

Answer 7

making a set quantity of identical products. This quantity is known as a ‘batch’. The batch size could be ten, 10,000 or a million identical products

Question 8

What is Flow production

Answer 8

Flow production involves continuously making identical products. This allows the production process to be heavily automated

Question 9

What are the advantages of Job production (3)

Answer 9

• High profit margin for bespoke products
• Employees gain satisfaction from using their skills
• Customers get exactly what they want

Question 10

What are the disadvantages of Job production (2)

Answer 10

• Highly skilled staff required leading to increased costs

- Training can be costly if highly skilled staff not available

Question 11

What are the advantages of Batch production (3)

Answer 11

• Can make a variety of different sizes flavours ect
• Can be partially automated
• Can produce more products than job production

Question 12

What are the disadvantages of Batch production (2)

Answer 12

• Not as flexible as Job production in regards to customers wants
• Not fully automated so costs can be higher than flow production

Question 13

What are the advantages of flow production (3)

Answer 13

• can make far more products
• Consistency in production due to automation
• can be fully automated

Question 14

What are the disadvantages of flow production (3)

Answer 14

• In a competitive market with similar mass produced products profit margins may be low
• Non tailored products
• Expensive to buy automation machinery

Question 15

What 4 ways can a business increase productivity

Answer 15

Investing in up to date machinery
Providing incentives to workers
Providing training to staff
Encouraging staff to come up with time saving ideas

Question 16

Define procurement

Answer 16

Getting the right supplies from the right supplier. Effective stock control is important to both customers and businesses.

Question 17

What happens if businesses have bad stock control

Answer 17

They can run out of stock which can lose them sales and customers

Question 18

What happens if a business has too much stock (3)

Answer 18

• High storage costs
• Increased waste if products are Perishable
• Reduced income/ profit

Question 19

What is the maximum stock level on a bar gate stock diagram

Answer 19

the largest amount of stock a business can store on site

Question 20

What is the minimum stock level on a bar gate stock diagram

Answer 20

This is also known as buffer stock

It is the lowest amount of stock a business can store on site whilst still being able to operate effectively

Question 21

What is the lead time on a bar gate stock diagram

Answer 21

How long it takes from ordering stock for it to arrive

Question 22

What is the reorder level on a bar gate stock diagram

Answer 22

the point at which a business needs to order new stock in order for it to arrive before its stock falls below the minimum level

Due to new technology such as barcode scanners this can be done automatically

Question 23

What is Just - in - time stock control

Answer 23

a stock control method where the business doesn’t store any raw materials.
Instead, it has regular deliveries that bring only what is needed before its existing raw materials run out, so buffer stock is not needed

Question 24

What are 4 advantages of JIT

Answer 24

• Removing buffer stock space so you have more space for sales
• Smaller but more frequent deliveries mean that the products will be fresher
• Businesses will no longer have large amount of capital tied up in stock that could go out of date/fashion
• Reduces production cost allowing you to have a higher profit margin

Question 25

What are 4 disadvantages of JIT

Answer 25

• It can be hard for businesses to react to unexpected changes in demand
• You cannot utilize bulk - buy discounts
• Customers could receive a poor service due to a misjudgement in stock needed

Question 26

What 5 factors should a business worry about when choosing a supplier

Answer 26

cost
quality
Delivery time 
Availability and capacity 
trust

Question 27

Define logistics

Answer 27

Making sure the correct products are procured and will arrive when needed

Question 28

What is quality control

Answer 28

the process of inspecting products and services to ensure that what customers receive is of a high standard

Question 29

What are 3 methods of quality control

Answer 29

Feedback
Factory inspections usually at the end of production
A 100% inspection system - All items are checked before being sold

Question 30

What is a disadvantage of quality control

Answer 30

it only identifies faults at the end of production so it will be more expensive to fix

Question 31

What is quality assurance

Answer 31

a process of carrying out quality checks at specific stages during the production process.
This ensures that faults and sub-standard products are found sooner rather than at the end of the production process.

Question 32

Quality control VS Quality Assurance

Answer 32

Quality Control:
Focuses on identifying faulty goods

Identifies and fixes problems and faults

Quality is the responsibility of one individual or a specific team of individuals

The product is at the heart of quality control

Quality Assurance:
Focuses on improving the production process

Establishes a good system for quality management

Quality is the responsibility of everyone involved in the manufacturing process

The production process is at the heart of quality assurance

Question 33

Why is quality management important in relation to costs

Answer 33

It helps reduce waste costs
It helps reduce employee costs as if a car light was broken the employer would have to pay additional wages to get it fixed

Question 34

What is the sales process

Answer 34

The process of purchasing a product of service

Question 35

What are the 5 key stages of the sales process

Answer 35

Customer interest 
Speed and efficiency of service
customer engagement 
Post sales service 
customer loyalty 

this is a cyclical process

Question 36

What are the 2 sales approaches

Answer 36

Hard approach - Employees seek customers and advise them about products and services eg cold calling

Soft approach - Employees simply advise customers tat are there (like in the shop)

Question 37

What are the 6 main factors which contribute to a good customer service

Answer 37

• knowledgeable, helpful and friendly staff
• meeting all legal requirements
• quick delivery
• efficient service
• excellent post-sales service and support
• good product availability