Making operational decisions

Question 1

What is operations?

Answer 1

the business function that organises, produces and delivers goods and services

Question 2

What does the production process involve?

Answer 2

using its resources to produce goods and provide services that customers can buy

Question 3

What are some examples of resources?

Answer 3

• raw materials
• finance
• skills
• knowledge

Question 4

What are the six stages of an operation?

Answer 4

• design
• manufacturing
• assembly
• test
• control
• delivery

Question 5

What are the three production methods?

Answer 5

• job production
• batch production
• flow production

Question 6

What does the choice of production method depend on?

Answer 6

the nature of the product and the level of production

Question 7

Job production

Answer 7

• one-off/bespoke products
• focuses on customer needs and individual service
• specialist skilled workforce ( ^ prices )
• high profit margins
• longer production process

Question 8

Batch production

Answer 8

• larger volume of products than job production
• some flexibility
• semi-skilled workforce
• some levels of automation
• productivity reduced when switching batches

Question 9

Flow production

Answer 9

• high volumes and low margins (with high productivity)
• standardised production
• low skilled workforce
• highly automated process
• setting up is expensive
• machine costs

Question 10

What are some examples of technology used in business’s production process?

Answer 10

• computer aided design (CAD)
• supply chain management (SCM)
• geographical positioning systems (GPS)
• electronic point of sales (EPoS)
• 3d printing
• e-commerce

Question 11

What are the positive impacts of technology on operations?

Answer 11

• speeds up the production process
• keeps businesses in touch with their customers
• lowered production costs
• fewer mistakes and defects

Question 12

What are the negative impacts of technology on operations?

Answer 12

• costly initial investment
• can quickly become obsolete
• requires specific training in tech for employees

Question 13

What is economies of scale?

Answer 13

where the average costs of production fall as the volume of production increases

Question 14

What is productivity?

Answer 14

output per worker

Question 15

Increasing productivity leads to . .

Answer 15

greater competitiveness in a market

Question 16

How can productivity be improved?

Answer 16

• increasing output
• lowering costs of production (inputs) while maintaining output

Question 17

What are four factors affecting choice of technology?

Answer 17

• productivity
• cost
• flexibility
• quality

Question 18

What is the maximum stock level?

Answer 18

the most stock a business can hold

Question 19

What is the re-order level?

Answer 19

the level of stock at which new stock will be ordered by the business

Question 20

What is buffer stock (minimum stock level)?

Answer 20

lowest amount of stock the business will hold
safety net in case of a surge in demand

Question 21

What is just in time stock control?

Answer 21

where stock is delivered only when needed by the production system

Question 22

In order for JIT to work, a business must have . . .

Answer 22

• good relationships with suppliers
• a well organised production system
• regular demand for their products

Question 23

What are the benefits of holding stock?

Answer 23

• unpredicted surges in demand can be met
• damaged goods can be replaced
• discounts on bulk buying
• economies of scale
• limited risk of problems supplying customer demand

Question 24

What are the benefits of holding little to no stock?

Answer 24

• warehouse cost saving
• less chance of damaged or stolen stock
• target employee focus on other tasks
• reduce costs of production (competitive product pricing)

Question 25

What impacts do suppliers have on a business?

Answer 25

- costs - flexibility - reliability - customer relations

Question 26

What makes a good supplier?

Answer 26

- value for money on products and delivery - flexibility - reliability - discounts on large orders - high-quality supplies - short lead times (availability)

Question 27

What are the two ways of achieving good quality in a business?

Answer 27

- quality control - quality assurance

Question 28

Quality control is seen as . . .

Answer 28

one part of the chain of production

Question 29

Quality assurance involves . . .

Answer 29

focusing on quality at every stage of the production process

Question 30

What are the benefits of good quality?

Answer 30

- premium charge prices - strong brand image - meeting customer needs - provide a competitive advantage - differentiating a product - less waste and defects

Question 31

A quality control system requires a business to:

Answer 31

- quality as the focus and responsibility - involve stakeholders at the design stage - aim for zero defects - meet quality standards - quality as the business’s culture

Question 32

Good customer service leads to:

Answer 32

- satisfied and loyal customers - positive brand image and reputation - differentiated products with a competitive advantage - increased sales and repeat purchases

Question 33

Poor customer service leads to:

Answer 33

- poor customer satisfaction - low customer loyalty - poor brand image - inability to differentiate products - falling sales and repeat purchases

Question 34

What are the stages of the sales process?

Answer 34

- customer interest - speed and efficiency of service - customer engagement - post-sales service - customer loyalty

Question 35

Depending on the product or service being sold the business may need to consider:

Answer 35

- the product knowledge of sales and staff - speed and efficiency of service - customer engagement with products - response to customer feedback - post-sales service provided