Management of operations Flashcards
(18 cards)
What is a supplier?
A supplier is a company that provides the materials and resources that are needed by a business to manufacture its product.
What is the purchasing mix?
The factors that a business should consider when deciding which suppliers to buy from.
What are the factors businesses should take into account when deciding what supplier to buy from.
-Cost of materials
-Discounts available, e.g. when bulk buying you may receive a discount.
-Quality of the materials
-Location of supplier, e.g. the greater the distance the greater the carbon footprint.
-Lead time
-Reliability and reputation.
What are consequences of under-stocking?
-Production slowing down or stopping due to lack of materials.
-Orders not being fulfilled on time, leading to dissatisfied customers.
-Not being able to accept unexpected orders.
-Having to make frequent orders for small amount of materials results in a higher cost of delivery.
What are consequences of overstocking?
-Money being tied up on inventory when it could be spent elsewhere in the business.
-Inventory deterioration or becoming obsolete before sold or used.
-Increased insurance and storage costs.
-It becomes easier for staff to steal inventory undetected.
What are systems and strategies used by a business to manage inventory levels and limit over and under stocking
-An inventory control diagram.
-Computerised inventory management.
What headings are in an inventory control diagram
-Maximum inventory level
-Minimum inventory level
-Re-order level
-Lead time
What is computerised inventory management and what an example?
Technology that used to improve the efficiency of inventory control. E.g. Electronic Point of Sale (EPOS), each time a bar code is scanned at the shop till the item is then instantly deducted from the inventory level. Advanced EPOS systems can also be linked to a businesses supplier and place orders when inventory reaches the ‘re-order level’.
What are some benefits of using computerised inventory management?
-Provides up to date inventory levels instantly.
-Reduces the need for time consuming stock taking.
-Can be programmed to re-order inventory automatically.
-Keeping a better track of inventory rotation dates.
What are the methods of production?
Job, batch and flow
What is job production used to do and what are some examples of job-production?
Job production is made to create one off, unique products. Product can be completely customised and made entirely to each customers requirements. Using this process one product will have to be made from start to finish before another is started. Job production products are usually made by highly skilled workers.
Examples of ethical operation?
-Paying employees a living wage that exceeds minimum wage.
-Not using child labour or sweat shops in the production of goods.
-Ensuring high farming standards.
-Avoid testing products on animals.
-Support initiatives, e.g. fairtrade or choosing appropriate suppliers.
Benefits of ethical operations?
-Improves reputation or image.
-Higher prices can often be charged for products seen as ethical.
-Helps in gaining a competitive edge over rivals.
What are costs of ethical operations?
-Often more costly, meaning increased production costs.
-Less profits will be made due to increased production costs.
What environmentally friendly practices should businesses consider?
-Reducing the amount of packaging used for their products.
-minimising the amount of waste created and disposing it in a safe, responsible manner.
-Recycling as much as possible.
-Using renewable energy sources.
-Reducing their carbon footprint and levels of pollution.
Benefits of environmental operations?
-Recycling and cutting down on packaging reduces production cost.
-Winning awards for being environmentally friendly can be used as a marketing tool.
-Higher sales and profits because companies that are environmentally friendly attract more customers.
-Improve businesses image and reputation.
What are some costs of environmental operations?
-Recycling materials can be time consuming.
-Consumers might see a product as inferior if it is made from recycled materials.
-Acting in an environmentally friendly way can be more expensive, meaning an increased production cost.
What are the uses of technology in operations?
-Electronic point of sale (EPOS): tracks levels of inventory, systems can be programmed to re-order inventory.
-Computer aided manufacturing (CAM): computer controlled machinery and robots used in the production of goods. Once programmed the machinery will work independently with little human input.
-Computer aided design (CAD): Software that allows businesses to design a digital model of a product.
-The operations department can use the internet to find and compare possible suppliers to purchase materials from.
-Global positioning system (GPS): Used to track deliveries.
