M4 Topic 4: Operation strategies Part 2 - inventory management, uality management, overcoming resistance to change, global factors Flashcards

1
Q

what inventory

A

the amount of raw materials, work-in progress + finished goods that business has on hand at any point in time

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2
Q

advantages of holding stock

A

keep up with demand

decrease lead times

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3
Q

disadvantages of holding stock (2)

A
extra costs (storage, spoilage, theft, and insurance)
stock can become obsolete/spoil
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4
Q

how inventory calculated

A

value of stock sold + value of stock unsold = profit

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5
Q

methods of inventory calculation

A

LIFO

FIFO

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6
Q

what is LIFO

A

Inventory pricing/management method where the last goods purchased are the first sold

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7
Q

why is using LIFO prohibited (3)

A

overstates cost
understates gross profit
lowers tax

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8
Q

what is LIFO Prohibits by

A

the international financial reporting standards

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9
Q

what is FIFO

A

the inventory pricing/management method the first goods purchase are the fist goods sold

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10
Q

what does using FIFO allow

A

Understate costs

Overstate profits

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11
Q

what is just in time

A

inventory management approach that ensures exact amount of material inputs will arrive only as they are needed

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12
Q

advantages of JIT (3)

A

less costs(no storage spoilage, obsolescence costs)
higher liquidity
more access to monetary resources

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13
Q

disadvantages of JIT (2)

A

Cannot respond to changes in demand

Supplier delays cause a disruption in production

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14
Q

what is quality

A

All the features and characteristics of a product that give it the ability to satisfy customer needs

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15
Q

what is quality management

A

the processes business undertakes to ensure consistency, reliability, safety and fitness of purpose of the product

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16
Q

list methods of quality management (3)

A

Quality Control
Quality Assurance
Quality Improvement

17
Q

what is quality control

A

inspections at various points in the production process to check for defects

18
Q

what is quality assurance

A

: taking series measurements + assessing against pre-determined quality standards

19
Q

what is quality Improvement

A

ongoing commitment to improving a business’s products

20
Q

list internal factors that can cause change (3)

A

staff
technology
innovation

21
Q

list external factors that can cause change (4)

A

Legislation/regulation change
Social change
Technological break through
Change in economic condition

22
Q

List financial costs that can cause resistance to change (4)

A

Purchasing new technology
Redundancy of staff
Retraining
Reorganising plant layout

23
Q

what is inertia

A

psychological resistance to change due to uncertainty/fear of unknown

24
Q

what are some strategies to overcome resistance to change

A
Constructive change  (not rapid + employee empowerment )
Proactive to change (anticipate + adjust to changing circumstances)
25
Q

list types of global factors (4)

A

Global sourcing
Economies of scale
Scanning and learning
Research and development

26
Q

what is global sourcing

A

The purchasing of supplies from wherever suppliers are that best meet sourcing requirements, without being constrained by location

27
Q

what are the advantages of global sourcing (2)

A

Access to new technology
Cheaper inputs
higher quality inputs

28
Q

what are the dis advantages of global sourcing (3)

A

Increase in logistics costs
Language barriers
Exchange rate

29
Q

what is economies of scale

A

cost advantages created as result of ↑ scale of business operations

30
Q

how is economies of scale achieved (3)

A

Mass production
Capital investment
Improve technology

31
Q

How is global scanning and learning achieved

A

constant analysis of business practice around the worls

32
Q

What is the purpose of research and development (3)

A

Create leading edge technologies
Innovative products
Products satisfy customer