making operational decisions Flashcards
(37 cards)
what’s the purpose of business operations
to produce goods (physical products)
to provide physical services (non physical offerings)
to deliver value to customers and generate revenue
state 3 types of production processes
job
batch
flow
what is job production
when individual products are made one at a time to meet specific customer presences like tailor made suits as an example
what is batch production
making a set quantity of identical products
what is flow production
continuously making identical products,allows production process to be heavily automated
advantage and disadvantage of job production
+ high profit margins for bespoke products
+customers get exactly what they they want
+ employees may be satisfied from using their specialist skills
- highly skilled staff required, increasing costs
- highly skilled staff may not be available, training costs will be v expensive
advantage and disadvantage of batch production
+able to make a variety of sizes and flavours
+ can be partially automated
+can produce more products than job
- not as flexible regarding customers’ tastes as job
not fully automated, costs may be higher than in flow
advantage and disadvantage of flow production
+able to make far larger quantities
+production consistency- identical, customers know exactly what theyre buying
+highly automated process
- in competitive markets for similar mass produced goods, profit margins can be very low
- customers like products that are tailored to their specific preferences
- expensive to buy all the machinery needed for automation
impact of technology on production
increases productivity and consistency
can reduce costs in the long term
improves quality control
increases flexibility
what do bar graph stock graphs do (go on youtube search how to interpret)
help monitor stock levels
what is just in time stock
when stock arrives just as needed - reduces storage costs but increases risk if delivery is late
what is procurement
getting the right supplies from the right supplier
negative consequences of poor stock control
high storage costs
increases waste if products are perishable
reduced income if business needs to sell of excess stock at reduced price
advantages of JITTT (5)
removes buffer stock space-reduces storage costs storage cots
smaller but more frequent deliveries mean that products will be fresher
no longer have large amounts of capital tied up in stock that could go out of date or out of fashion- this capital can now be reinvested elsewhere
reduce waste
jit reduces production costs, so the business can price their products for competitive advantage
disadvantages o JIT
hard for businesses to react to unexpected changes in demand
unable to use bulk buy discounts if they only buy in small qualities
customers could receive poor service if business misjudges amount of stock needed and allows products to go out of stock
what are the key factors to consider when tryna build a relationship with a supplier
cost- keep variable costs low
quality- when marketing
delivery- late delivery interrupts manufacturing time- want quick delivery with minimum lead time (+cost, speed and reliability of it)
availability and capacity
trust - trade credit
what are logistics
making sure the correct products are procured and that they’ll arise when needed
impact of logistics
costs - delays can limit cash flow
reputation
customer satisfaction- meet all customer needs, more likely to get repeat customers
what are the two ways of managing quality
quality control
quality assurance
what is quality control
process of inspecting products and services to ensure that what customers receive is of a high standard
examples that businesses can conduct quality control
feedback
factory inspectors
one hundred percent inspection system
disadvantage of quality control;
only checked at the end of production so more expensive to fix than if found immediately
