5.6 Flashcards
(29 cards)
What is a supply chain?
all the stages of production involved in creating a finished product, from extraction of raw materials to the delivey of finished products to costumers
What is supply chain management?
the process of working with all of a business’s suppliers to ensure reliable and quality production
What are some factors that supply chain managers consider when selecting suppliers?
impact on multiple stakeholders
cost
reliability
product quality
lead time (how long it takes to make a delivery)
What is procurement?
the process of purchasing goods and services that are used by a business to product its products
What are the advantages and disadvantages of local supply chains?
advantages is that theres greater control, less risk, and lower transport costs
disadvantages are that its higher production costs, and less choices
What are the advantages and disadvantages of global supply chains?
advantages is that its lower cost of production, and greater choices
disadvantages is that its greater risk and lack of control
What is just-in-time production?
the principle of placing smaller, regular orders for resources, which are delivered just in time for them to be used
What are the benefits and limitations of just-in-time production?
benefits are that it reduces storage costs and waste, improves operations, and increases capacity
limitations are that theres reduced economies of scale, hgih risk, and reduced resilience
What is just-in-case production?
holding additional quantity of stocks so that a business can continue to operate when faced with an unforeseen event
What are the benefits and limitations of just-in-case production?
benefits are that theres resilience, economies of scale, and less risk
limitations are that theres less working capital, higher storage costs, and more waste
What is a stock control chart?
an easy way to monitor and analyse stock levels and better control costs
What are the main parts of a stock control chart?
maximum stock level
buffer stock level
lead time
reorder level
reorder quantity
What is maximum stock level?
the total amount of inventory a company wishes to hold
What is buffer stock level?
stock that is held just in case there is an unexpected order or late delivery
What is reorder level?
the point when new stock is ordered from a supplier
What is reorder quantity?
the amount of stock that is orders from a supplier
What is productivity rate?
the average efficiency of production expressed as ratio of out to inputs within production
What is labour productivity?
the output perwork over a defined period of time and is calculated by dividing the total output by the number of employees
What is unit costs?
the cost of producing a single unit of output, and it calculated by dividing the total cost over the output
What is defect rate?
the percentage of output that does not meet the quality standards, and its calculate by defects over the outputs tested x 100
What is the operating leverage?
a measure of a company’s fixed costs relative to total costs, and its calculated by
quantity x (price -variable cost per unit) / quantity x (price - variable cost per unit) - fixed costs
What are the capacity utilisation?
the percentage of the maximum potential output that is currently being produced, and it calculated by
actual output/productivity capacity x 100
What are the quantitative factors that affect make or buy decisions?
total and average costs
defect rates
productivity rates
proftability
capacity utilisation
What are the qualitative factors that affect make or buy decisions?
quality management
supply chain reliability
changing demand
lead times
reputation and public relations
