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Business > 3. Business Operations > Flashcards

3. Business Operations Flashcards

1
Q

What are the 2 methods of production?

A
  • Job Production
  • Flow Production
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2
Q

What is job production?

A

A method of creating an individual unique product to meet a customer’s specification

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3
Q

Advantages of Job Production

A
  • Businesses can charge higher prices for the products
  • (As) Products are likely to be high quality
  • Employees are likely to be more motivated as there is a variety of work and highly skilled workers tent to get paid better
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4
Q

Disadvantages of Job Production

A
  • Expensive to produce as each product is different
  • Time-consuming
  • Requires highly skilled labour/employees

Miss out on economies of scale as they cant buy in bulk

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5
Q

Give one example that job production may include

A

Artist drawing a portrait

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6
Q

What is flow production?

A

All products identical and produced as many as possible along an assembly line.

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7
Q

Advantages of Flow Production

A
  • Able to produce large volumes of products
  • Employees can specialise in a smaller and simpler number of tasks
  • Producing in large quantities means they can benefit from economies of scale, which reduces cost per unit
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8
Q

Disadvantages of Flow Production

A
  • High costs to purchase and setup machinery
  • Employees may be demotivated or bored due to repetitive / limited range of tasks and lower salary
  • Risk of machine failure
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9
Q

Give one example that flow production may include

A

Chocolate bars

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10
Q

Name one way a business can become more efficient?

A

One way a business can become more efficient is through lean production

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11
Q

What is lean production?

A

Lean production is a strategy businesses can use to make production more efficient
It does this by aiming to use reduce waste during the production process and using minimum waste as possible

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12
Q

What type of waste does lean production aim to reduce?

A

The waste can be anything that does not add value to the production process such as:

  • Stock that hasn’t been sold
  • Reducing time employees waste not working due to delays in production
  • Stock that has been damaged
  • Holding too much stock that costs money to be stored
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13
Q

Name the two forms of lean production techniques

A
  • Kaizen
  • JIT
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14
Q

Describe what Kaizen is

A
  • Kaizen is a japanese term that means ‘continuous improvement’
  • It is a form of lean production that encourages employees to suggest ways that the the production process can be improved
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15
Q

What is JIT?

A

Just in time (JIT) is a method for managing stock and a method for lean production that aims to keep stock levels to the minimum at all times

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16
Q

What are the two methods a business can use to manage its stock?

A
  • JIT
  • JIC
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17
Q

Advantages of JIT

A
  • Reduced costs - as there is less warehouse space to pay for, less warehouse workers etc.
  • Fresher products as there are frequent deliveries - good for food (and good relationship with supplier)
  • Less likely to go out of fashion
  • Less unsold stock - which reduces waste and saves money
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18
Q

Give 4 disadvantages of JIT

A
  • Hard for businesses to react to unexpected changes in demand - so they cannot maximise their profit or satisfy customer demand
  • Needs lots of coordination between the firm and its supplier, which requires time and transport & logistical costs
  • Risk of stock not arriving on time
  • Cannot benefit from purchasing economies of scale as you cannot use bulk-buy discounts if you buy in small quantities

(Coordination requires time)

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19
Q

What is JIC (Just-in-Case) ?

A

JIC is a method of stock control that involves purchasing or producing buffer stock (stock in excess) just in case there is a supply shortage or spike in demand

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20
Q

Advantages of JIC

A
  • If there is a problem with the supplier, the production process will not have to stop
  • Reduces the chance of running out of stock, which means number of sales lost is reduced
  • Satisfy customer demand, increasing level of customer satisfaction
  • Benefit from bulk-buy discounts- Economies of Scale
21
Q

Disadvantages of JIC

A
  • Buffer stock requires storage space which has can be costly (needs warehouse space, warehouse workers)
  • Increases chances of leftover stock / selling at discount
22
Q

What is a supply chain?

A

A supply chain is the sequence of groups and processes involved in converting raw materials into a final product and then distributing it from supplier to customer

23
Q

Who are the typical members of a supply chain?

A
  1. Suppliers of raw materials
  2. Manufacturers that turn the raw materials into products
  3. Distributors that buy products from the manufacurer and sells them to businesses or consumers
  4. Retailers that sell the product directly to consumers
24
Q

Factors affecting choice of suppliers

A
  • Price
  • Quality
  • Reliability - A business needs to trust that their products will arrive on time
25
Q

What is procurement?

A

Procurement is the process of finding and buying the materials and equipment that a firm needs to provide its product or service from the right supplier at the right price and at the right time

26
Q

What is Logistics?

A

Managing the movement of supplies and products from one part of the supply chain to another, to ensure the timely delivery of supplies to the production process and finished products to customers

27
Q

What effects do logistics and procurement have on a business?

A
  • Increases the efficiency of the business - Less waste & no breaks in production as they were ordered at the right time and in the right quanity
  • Lowers the unit costs if they get it at the best price
28
Q

What are the 3 benefits of managing a supply chain effectively?

A
  • Good relationship with suppliers to ensure that key processes are running efficiently and cost effectively
  • Getting the supplies at the best price and value from the right choice of supplier
  • Reduced waste and unnecessary costs to create a streamlined process and fast production times
29
Q

Give 3 examples of the customer expectations of “high-quality”

A
  • Use of high-quality raw materials
  • Ensuring that products will last a long time and work well
  • Dealing with faults quickly and efficiently
  • Good customer service
30
Q

What are the consequences of issues with quality

A
  • Lost customers (customers not likely to come back)
  • Bad reputation
  • Product recalls (If a product is found to be unsafe, the business may be legally forced to recall all of its products and give refunds)
31
Q

How do businesses measure quality?

A

Businesses measure the quality of their products through:
- Customer surveys to see how satisfied customers are with the quality
- Monitor how many returns and customer complaints they get
- Test a random product to see if it meets the business’ sprecification (e.g. right size)

32
Q

How do businesses identify quality problems?

A

Businesses can identify quality problems through…
* Customer service & complaints
* Quality Control
* Quality Assurance

33
Q

What is Quality Control?

Who

A

Inspecting products and services at the end of production to ensure that what the customer receives is high standard. This can be done by factory inspectors at the end of production.

34
Q

What is Quality Assurance?

A

Quality Assurance is where the business regularly checks the products as they’re being made to help identify quality problems before it gets to the customer

35
Q

What is TQM (Total Quality Management)?

A

Total Quality Management is a strategy that aims to making quality the responsibility of every employee and making sure that every employee does every aspect of their job to the highest possible standard

36
Q

Advantages of TQM

A
  • Reduces waste and errors (which reduces costs)
  • Ensures quality in every stage of production and after-sales customer service
  • Increases customer satisfaction
37
Q

Disadvantages of TQM

A
  • Employees need training to embrace the culture, which can be time-consuming and costly
  • Employees could be demotivated as it may seem like a lot of extra work
38
Q

Costs & Benefits of maintaining quality

A

Benefits:
* Better reputation and image
* Increased sales (if a customer is pleased with the quality, they are likely to buy from the business again)
* The business can charge higher prices
* They can avoid product recalls, which saves money

Costs:
* Inspection costs - The inspection process where the quality of products are checked costs both time and money
* Staff Training - Staff need to be trained to do their job properly, which again costs time and money

39
Q

What are the problems with quallity a businesses could face as it grows or expands?

A
  • When a business is overwhelmed with customers and orders, the business might cut corners to make products quicker
  • When a business chooses to outsource its tasks, it can be expensive to outsource to a firm that delivers high quality, whilst outsourcing to a cheaper firm can lead to a fall in quality
  • When a business becomes a franchisor, ensuring that the high quality standards are maintained across each franchisee can involve a lot of staff training and regular inspections
40
Q

What is a sales process?

A

The sales process is the chain of events where a business sells to a customer

41
Q

What stages might the sales process include?

A
  • Finding potential new customers
  • Approaching potential customers
  • Investigating the customers’ needs
  • Presenting the products on offer to the customer
  • Closing the sale by getting the customer to make a purchase
  • Post-sales service
42
Q

Give 3 ways in which businesses can provide good customer service?

A
  1. Having excellent product knowledge
  2. Good customer engagement by being friendly, polite and responding on time to helps to create a positive experience and good relationship with the customers
  3. Offering Post-Sales Service
43
Q

How does having good product knowledge help provide good cutomer service?

A

Having excellent product knowledge means that:
- The customer’s questions can be answered quickly and accurately
- Staff can recommend the best product that matches for the customer’s needs
- It makes the customer feel confident from buying from the firm as the staff know what they are talking about

44
Q

What types of post-sales service can businesses offer customers?

A
  • User training (teaching customers how to use the product)
  • After-sales helpine
  • Servicing (e.g. bike service)
45
Q

What are the benefits of providing good customer service?

A
  • Increase in customer satisfaction, which can lead to good reviews and also the two points below:
  • Customers are more likely to remain loyal and repeat purchases (buying the same product more than once) from the company again
  • Customers are more likely to spend more (increase of spending) with a company that provides them good customer service
46
Q

What are the disadvantages of providing good customer service?

A
  • Paying the wages of extra staff that are specialised in good customer service
  • Cost of training
  • Cost of providing Post-Sales Service
47
Q

What are the dangers of poor customer service?

A
  • Dissatisfied customers (who are less likely to buy from the business again), which can lead to a loss in potential sales and…
  • Poor reputation via word of mouth, which can lead to a loss in potential sales and…
48
Q

Give the 3 ways in ICT has allowed customer services to develop

A
  • Websites - through FAQs, live chat and chat bots
  • E-commerce
  • Social media - Allows firms to communicate with their customers and build relationships with them and is also easy for customers to contact a business if they have a query or complaint

Business (10 decks)

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