2.3 Making Operational Decisions Flashcards
(43 cards)
1
Q
What is production
A
- production of the transformation of resources into finished goods or services
2
Q
What are the 3 methods of production
A
Flow
Job
Batch
3
Q
What 4 factors effect which type of production a business uses
A
- level of output required to be produced
- nature of the business
- whether the product is standardised or customised
- the level of machinery used
4
Q
What is job production
A
- manufacturers produce one product at a time as ordered by the customer
5
Q
Advantages of job production
A
- High quality product.
- Motivated and highly skilled workers.
- Customise products can be produced.
6
Q
Disadvantages of job production
A
- production is slow.
- Labour costs are high.
7
Q
What is flow production
A
- continuous manufacturing of standardised products, usually on a production line
8
Q
Advantages of flow production
A
- lower unit cost due to economy of sale.
- Rapid production.
- Are usually highly automated.
9
Q
Disadvantages of flow production
A
- customisation is difficult.
- Capital equipment can be expensive to purchase.
10
Q
What is batch production
A
- groups of the same products are produced as a batch
11
Q
Advantages of batch production
A
- workers can specialise.
- Production can take place as previous batch starts running out
12
Q
Disadvantages of batch production
A
- requires careful coordination to avoid shortages.
- Money is tied in stock.
- Completed products need to be stored
13
Q
What are the 4 impacts of technology on production
A
- cost
- productivity
- quality
- flexibility
14
Q
What does a bar stock graph represent
A
- A bar stock graph control diagram illustrates the flow of stock into and out of the business over time
15
Q
What is maximum stock level
A
- The maximum stock level is the maximum amount of stock, a business is able to hold in normal circumstances
16
Q
What is reorder level
A
- The real order level is the level at which businesses place an order with their supplier
17
Q
What is minimum stock level
A
- The minimum stock level is also known as, the buffer stock level and is The lowest level to which a business is willing to allow stock levels to fall
18
Q
What is lead time
A
- The lead time is the length of time from the point of the stock being ordered from the supplier to, it’s being delivered
19
Q
What are the 5 factors that effect the efficiency of raw material procurement (gathering)
A
- Quality of all materials.
- Cost of raw materials.
- Delivery.
- Availability of materials.
- Relationship with suppliers.
20
Q
What are the 5 factors that influence the sourcing of raw materials
A
- quality
- delivery
- availability
- costs
- trust
21
Q
What is Just In Time Stock Management
A
- just in time stock management is a process in which role materials are not sourced outside but ordered as required and delivered by supplies just in time to be used.
- careful coordination is required ensure that all materials and components are delivered by suppliers at the moment they are needed
22
Q
Advantages of Just in time stock management
A
- Stock holding costs are minimised.
- Close working relationship with the developed with a 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 Employees motivation is likely to be improved.
23
Q
Disadvantages of just in time stock management
A
- bulk buying economics of sales are not generally possible.
- The ability to respond to unexpected increases in demand is reduced.
- Administrative costs Relate to frequent ordering are increased.
- Unreliable suppliers can quickly halt production.
- Significant changes to organisational structures and production controls the needed
24
Q
Why is managing quality important
A
- Quality considers the characteristics and features of a product that satisfy the needs of customers.
- Businesses need to maintain a level of quality that continues to attract and retain customers.
25
What are the 2 approaches to managing quality
- quality control
- quality assurance
26
What is quality control
- inspecting the quality of output at **the end** of production process
27
Advantages of quality control
- Quality specialists are employed to check standards.
- An inexpensive and simple way to check the outputs is fit for purpose.
28
Disadvantages of quality control
- The rejection of the finished goods is significant waste of resources.
- There is little focus on the cause of defect.
29
What is quality assurance
- inspecting the quality of production throughout the process
30
Advantages of quality assurance
- Quality issues are identified early so products may be reworked rather than rejected.
- The cause of defects is focused so future quality issues may be prevented.
- Controlling quality throughout the production process can be expensive, but it also could ultimately reduced costs because defects do not have then been dealt with.
31
Disadvantages of quality assurance
- staff, training and skilled workforce is required for labour cost may increase.
- Reworking may lengthen the production process
32
What is the competitive advantage from quality management
- The quality of the business products can provide a competitive advantage.
- Unit costs are likely to be low, if a business takes a preventative approach for the use of quality assurance = low cost may allow a business to reduce its selling price to better compete with or undercut, its rival
- Increased finance may be available to fund marketing activity to improve the brand recognition and attract new customers.
- High levels of quality can be used to promote activity And provide a unique selling point for businesses to compete markets.
- Successfully developing a unique selling point for quality can ease expansion into new markets as a result of positive reputation it creates
33
What are the 5 steps in the sales process
1. Gain customer interest
2. Provide a speedy and efficient service
3. Engage the customer
4. Provide post sales service
5. achieve customer loyalty
34
What is step one of the sales process
1. Gain customer interest
- A business must make a customer aware of its products through marketing activities, such as promotional, tactics, branding sponsorship, sales promotions public relations.
- Customer interest and also be gained through the excellent product knowledge.
- For example, a salesperson needs to be able to talk confidently about the product features and be capable to be answering questions and making recommendations.
35
What is step 2 of the sales process
2. Provide a speedy and efficient service
- A business needs to be flexible enough to be able to take orders produce and deliver to customers promptly.
- Speed and efficiency can be improved by :
delivering and installing products for customers
allowing customers to choose a convenient delivery method
making online platforms. Easy to use
reducing cues at checkouts,
providing a range of ways to for customers to contact the business.
36
What is step 3 of the sales process
3. Engage with the customer
- In some cases, it is important to engage with the customer during the sales transaction.
- When customers order a product and need to wait for some time for it to be delivered a business should ensure that there is regular communication with the customer.
- Customised products and also need customer approval before they are manufactured So meetings maybe arrange
37
What is stage 4 of the sales process
4. Provide post sales service
- post sales services support given to customers after the purchase of a product and can include:
Support in using the product,
dealing with companies and faults,
managing items, and needs to be returned,
providing services, or repairs,
offering warranties or guarantees,
collecting customer feedback on transaction
- some elements of Postal Service can be included with the product packaging
38
What is stage 5 of the sales process
5. Achieve customer loyalty
- achieving customer loyalty is important for a business as it leads to repeat sales and valuable word-of-mouth
- businesses need to carefully manage the relationship with customers after the sale has it taken place through:
communicating with the customer according to their wishes,
providing extended product, support,
maintaining a positive reputation,
continuing to offer what the customer wants,
using promotional tactics to encourage repeat purchases
39
Why is customer service important
- Developing customer loyalty helps businesses to grow and success in a long time.
- Good customer service generates customer loyalty was drives repeat sales and helps the firm to reduce marketing costs when launching new products
40
What are the 3 methods of developing customer loyalty
- customer service
- loyalty cards
- saver schemes
41
How is customer service a way to develop loyalty
- when customers have a positive customer service experience, they are more likely to return and recommend the business to others
42
How are loyalty cards a way to develop loyalty
- A popular way for businesses to encourage repeat customers.
- These cards typically offer rewards or discounts for previous purchases.
43
How are saver schemes a way to develop loyalty
- are you scream is typically offer discounts or special pricing for customers who save money with them.
- This helps customers garden to save up some money I can be used at the girls are usually hire for Christmas.
