Controlling – management activity Flashcards
Define controlling
It measures how well an organisation achieve the objectives. It is set out.
What are some type types of control?
Stock, financial, credit, control
What is stock control?
It is a management activity which aims to keep the optimum level of stock in a business.having the right amount of stock in the right place and at the right time to ensure production levels are met
What os one methods of stock control?
JIT – just in time
It involves ordering warm materials to arrive in time to meet customers orders
It aims to minimise the amount of stock they are holding which reduce storage costs and the risk of it going out of date
JIT relies on steady production and good relationship relationships with suppliers
What is a method of stock control that is not JIT ?
EDI – electronic data interchange
It ensure a company always has the optimum levels of stock so that they can meet demand of customers. It automatically faces orders once a minimal level is met.
What are the implications of having too much stock?
There is increased risk of stock being damaged due to overcrowding
Storage cost are increased as well as insurance costs
The business may have too much capital tied up in stock
Stock become obsolete or go out of fashion
What are the implications of having two little stock?
A business may not be able to fulfil customer orders.this needs to drop in the customer loyalty and sales will fall
What are the benefits of effective stock control?
Reduced costs – by having the optimum levels of stock the business can reduce storage cost and insurance costs. It can reduce the amount of money spent on repairing damage stock.
Increase efficiency – it reduces the risk of human error.order will be more accurate and will help to improve customer satisfaction levels
Feedback – there will be detailed records of stock levels because orders are placed digitally
What is financial control?
It ensures their business is liquid and profitable. It can help attract investors and fund the business for future expansion.
What does liquid mean?
It means a business has enough money to pay short-term liabilities like wages
What are ways of financial control?
Cash flow forecast – shows if there are any likely cash efforts for the business in the future.I can then take action to avoid future issues
Ratio analysis – used to measure financial performance
What is credit control?
It ensures that customers who buy goods on credit pay their bills full on time
What are bad debts define it?
They are when a debtor is unable to repay the money that they owed to a business
How do you minimise bad debts?
Check customers credit score – they should ask for a bank reference to check that they have the required cash flow to repay the Business.they could also check the customers credit rate to assess their ability to repay loans in the past
Set credit limits – the business should set different limits for different customers depending on their financial situation
Penalties – the business could charge extra fees and reduce future credit limits for late payment
Discount – the Business could offer a discount for a customer who are willing to pay on time
Efficient administration – the business could ensure there is clear communication with their directors such as timely reminders
What are quality circles?
It is a group of different staff involved in the production process who meet to discuss and address any issues
What is quality control?
It involves inspecting any completed work to ensure that it meets the required standards
Give me an example of an award for quality
Bord bia approved– it is an award given to Irish food products
Guaranteed Irish – award given to Irish produce products
Michelin star – award given to high-quality food
What are the benefits of quality control?
Marketing – they can spend less on advertising to attract their target market as products are consistently of a high-quality so have a good reputation
Premium pricing – due to quality of their products, they can charge higher product prices
Customer loyalty – one customers can rely on the quality of their product. They developed loyalty which can boost sales and give the business and edge over others.
Exports – having a equality award that is internationally recognised will make it easier to start recording to other countries and remove barriers to entering new markets
