Management of Operations Flashcards

Question

List advantages of quality circles.

Answer 1

* Motivates employees by involving them in decision-making * Provides management with informed suggestions

Answer 2

* Can lead to lost production time * Training costs for participation

Answer 3

They prove that a product has met an agreed industry standard.

Answer 4

* Proves product quality * Can be used as a promotional tool * Builds customer confidence

Answer 5

* Time-consuming to achieve * Must be maintained to avoid losing reputation

Answer 6

An approach to ensure quality products, incorporating various methods and ensuring commitment from all staff.

Answer 7

* Aims for zero errors * Motivates staff through involvement * Increases customer confidence and market share

Answer 8

* High training costs * Requires strict staff commitment

Answer 9

Individuals hired to evaluate customer experiences and provide feedback to the business.

Answer 10

* Provides unbiased feedback * Gathers valuable insights on customer experience * Suggests improvements

Answer 11

* Staff may resent being evaluated * Feedback may not represent the whole business * Costs associated with hiring mystery shoppers

Answer 12

The practice of copying the quality and processes of the market leader.

Answer 13

* Potential to match the best product quality * Saves time in developing quality approaches

Answer 14

* Difficulty in obtaining quality method information * Limits the business to the current benchmark standards

Answer 15

1. Inventory - Liaising with suppliers that provide materials for production, partly or completely finished goods 2. Storage and Warehousing - ensuring their appropriate storage of inventory including sending inventory to production departments if required 3. Order processing - dealing with orders from customers to ensure they receive the correct products 4. Distributions - deciding on the best method of distribution to get the product to the customer

Answer 16

Supplies could go out of date if they are stored for too long Supplies could go out of fashion before they are used Too many supplies leaves a risk of theft by staff , customers or thieves The business will have to pay for stockholding cost , such as insurance and security The opportunity cost of money being tied up in inventory which could be better used elsewhere in the business

Answer 17

The business may run out of inventory and be unable to continue production or carry on selling The business will not benefit from bulk buying discount due to making smaller orders There may be no goods to sell resulting in a bad reputation and customers not returning There will be an increase in delivery cost in smaller deliveries will have to be made There will be an increase in administration cost

Answer 18

This is the most amount of inventory that should be held Setting this level avoids consequences of overstocking

Answer 19

This is the least amount of inventory that should be held Setting this level avoids consequences of understocking

Answer 20

This is the level at which inventory should be reordered. Computerised inventory systems link to EPOS and automatically reorder goods This avoids running out of inventory

Answer 21

This is the amount that is ordered This ensures the quantity ordered is not too much or too little

Answer 22

This is the time taken between an order being placed and inventory arriving As short a lead time as possible allows the business to react to rush orders

Answer 23

This is the extra inventory below the agreed minimum to be used in emergencies This ensures that production doesn’t stop and sales continue to be made

Answer 24

The maximum inventory level depends on the storage available, the cost of storing goods and the maximum amount of demand The minimum inventory level depends on the relationship with suppliers, the skill levels of staff so materials are not wasted, the finance available, the minimum amount of demand and likelihood of drastic changes to taste and fashion The re-order level depends on lead time, the amount of inventory already held, if bulk-buying discounts are available, and the maximum inventory levels themselves.

Answer 25

Process of ordering supplies only when they are either required for production or when an order is placed by a customer

Answer 26

Allows production to be lean, there is no wastage as all inventory is used for production No money is tied up in inventory, improving cash flow and working capital No warehouse is required, saving costs The business is more responsive to external factors

Answer 27

If deliveries are late then the business will face the negative consequences of understocking requires excellent relationships with suppliers to work effectively, which can take time to develop Relies on a good infrastructure between the business and suppliers No room for error in production

Answer 28

involves storing inventory in one central location in a large purpose built warehouse

Answer 29

Specialist staff are employed to maintain inventory which improves speed of inventory handling insecurity Centralise warehouses can store a massive amount of inventory benefiting from economies of scale The same procedures for issuing inventory are used across the organisation improving consistency It may be cheaper to store inventory in one large warehouse than the total cost of many smaller on site store rooms Easier for suppliers to deliver inventory as centralised warehouses are often located close to infrastructure

Answer 30

inventory has to be delivered to each division or department causing delays Specialist staff need to be employed to maintain inventory, increasing wage costs specialist equipment needs to be purchased and maintained Inventory usage levels and needs are unclear as division need to communicate with the warehouse The use of centralised where everything has declined due to more efficient inventory systems such as JIT, sourcing direct from the supplier

Answer 31

Involves storing inventory in many locations in smaller warehouses or store rooms

Answer 32

Inventory is always close at hands when needed for production or to sell to customers Smaller, more locals warehouse are more responsive to local needs Inventory usage reflects production as it is stored in factories or retail outlets Smaller amounts of inventory result in no negative consequences of overstocking

Answer 33

Can lead to wastage or theft of inventory as security isn’t as good as centralised storage Lack of specialists can lead to inventory control being clumsy and inefficient Each division may handle inventory differently, leading to inconsistency and problems being harder to pinpoint Smaller amounts of inventory result in negative consequences of understocking

Answer 34

Databases keep balances of inventory which are automatically updated Can be linked to tills through EPOS, which update inventory levels with each sale Accurate and constant monitoring inventory levels allows for automatic reordering Allows for decisions on slow moving inventory or best sellers to be made by managers from their computers Can highlight regional variations in inventory for head office Can highlight seasonal shifts in demand Is a deterrent to theft by staff as they know inventory levels are monitored closely

Answer 35

Computerised systems will cost a lot of money to install and maintain Money and time need to be invested to train staff to operate the system efficiently Crashes and breakdowns can hold up reorders and production

Answer 36

1. planning inventory required using production and sales budgets 2. organising for the resources needed for logistics, including warehouse equipment and staff 3. commanding warehouse staff to carry out tasks 4. coordinating the supply chain, channels and methods of distribution so deliveries are made on time 5. controlling the quality, quantity, cost and efficiency of the movement and storage of inventory 6. delegating inventory procedures to decentralised warehouses 7. motivating other members of their team

Answer 37

Awards can be granted for being ethical, which can be used for promotional purposes Businesses with an ethical reputation can attract customers and quality staff who agree with their principles

Answer 38

Audits are needed to ensure standards are met and maintained, which may be time consuming Decision making could be more complex and time consuming as many possible solutions may not be appropriate because they are not ethical

Answer 39

the moral considerations of an organisation need not only to refer to how people are treated; increasingly these concerns are also around the treatments and wellbeing of animals. This might include the conditions that animals are kept in, the way they are handled, animal testing and the use of animal derived ingredients

Answer 40

When suppliers of raw materials receive a guaranteed and fair price for their goods. Also ensures that employees in the supply chain are treated fairly

Answer 41

Businesses are awarded the Fairtrade mark on their products which can appeal to customers Stocking fair trade goods demonstrates the retailers ethical commitment to its customers Businesses that are fair trade have a positive impact on the producers of the raw materials with which they work and have a better relationship with the supply chain

Answer 42

Losing a fairtrade mark after gaining one will result in bad publicity Fair trade products are often more expensive The business has a more limited choice of suppliers

Answer 43

The organisation plays a part in looking after the environment that will hopefully sustain their activities for the future Having a positive effect on the environment will ensure the organisation gain a positive reputation ; Awards can be granted for being environmentally friendly which can be used for promotional purposes Renewable energies save costs in the long run as fuels, oils, petrol or gas don’t need to be paid for

Answer 44

investment and environmentally friendly measures will be expensive in the short term New procedures may have to be adapted to be more environmentally friendly, which can take time Most environmentally friendly procedures rely on the natural environment which may not be sufficient

Answer 45

IT for example, laptops tablets and smart phones can be used to purchase supplies quickly The Internet can be used to research supplier prices EPOS can be used with computerised inventory control to automatically re-order depleted inventory Computerised devices can be used by warehouse staff to check and find inventory Automated systems contract deliveries for both the businesses and the customers information Spreadsheets can be used to accurately and quickly produce production budgets CAM such as robotics can be used an automated production Emerging technology, such a solar energy energy and EV can be used to harness renewable energy

Management of Operations Flashcards

(69 cards)