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Higher business > Operations > Flashcards

Operations Flashcards

1
Q

Purpose of stock/ inventory management

A

To prevent overstocking
To prevent understocking

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2
Q

Purchasing mix (factors to consider for suppliers)

A

Cost of raw materials
Quality of raw materials
Lead time of delivery
Distance from supplier to customer
Reliability /reputation
Credit facilities
Quantity of raw materials

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3
Q

Overstocking consequences

A

Supplies go out of date
Supplies could go out of fashion
Increase risk of theft
Increased storage costs
Money tied up in capital

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4
Q

Consequences of understocking

A

Production may have to stop
Customers may not be able to purchase product
Lose economies of scale, increasing cost of raw materials

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5
Q

Inventory management diagram labels

A

X axis - time
Y axis - stock level
Maximum level - top line
Reorder level - middle line
Minimum level - lowest line
Gap between minimum and zero - buffer stock
Point where stock line meets reorder level - reorder line
Point where stock line meets minimum level - delivery time
Difference between min and max level - reorder quantity .
Lead time - the difference between the reorder time and delivery time .

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6
Q

Maximum inventory level

A

The level of stock in a business which is used to prevent the business form overstocking

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7
Q

Minimum inventory level

A

The level of stock used to prevent the business from understocking and running out of stock

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8
Q

Reorder level

A

The level of inventory where a new order is sent to supplier, to refill inventory before business hits the minimum inventory level.

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9
Q

Reorder time

A

Where a business sends a new order to a supplier.

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10
Q

Lead time

A

The time it takes for a supplier to deliver an order, after the order has been sent to them.

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11
Q

Computerised stock control

A

Where a business uses an electronic system, such as epos to ensure that the business doesn’t over or under stock.

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12
Q

Manual stock control

A

Where a business keeps track of their stock level using human labour, and someone has to count stock.

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13
Q

Advantages of computerised stock control

A

Inventory is always up to date
Automatic reordering
Managers can gather sales statistics to see how well products are performing, and make management decisions
More secure, deterring theft

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14
Q

Just in time

A

An alternative inventory management system where a business orders the raw materials for the business exactly when the raw materials are required.

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15
Q

Advantages of Just in time

A

No waste of raw materials
No money tied up in capital
Cuts out need for storage
Business is more responsive to external factors changing
Relationship with supplier is dependable (could be bad)

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16
Q

Disadvantages of JIT

A

Late deliveries stop production
Admin and order costs increase
If there is a surge in product demand the business won’t be able to respond
Economies of scales can’t be taken advantage of
Can be time consuming to constantly check quality of raw materials entering the business production chain.

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17
Q

Disadvantages of computerised stock control

A

If power is down stock system breaks down
High startup cost

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18
Q

Centralised storage definition

A

Where a business uses one large storage location to store stock, which delivers to all retail locations, and us typically purpose built.

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19
Q

Decentralised storage definition

A

Where a business uses multiple small storage locations to store stock, and each location will only deliver to one retailer or department.

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20
Q

Advantages of centralised storage

A

Suppliers deliver to one location -reduce admin costs
Store more stock - Economies of scale
Often located close to infrastructure -easily accessible
Greater uniformity over whole business, meaning business may be more efficient
Better security since security
is in one location.

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21
Q

Disadvantages of centralised storage

A

Increased waste for products which go out of date
It may take longer to get stock from storage to some retailers
Staff is specialised meaning they will need higher wages
Increased storage costs and cost of specialised equipment

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22
Q

Advantages of decentralised storage

A

No delays since stock is close at hand
Will respond better to local external pressures
Decrease waste - since less stock may go out of date.
Decreased cost of specialised equipment

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23
Q

Disadvantages of decentralised storage

A

Less security distributed amongst storage
Less specialised staff, meaning lower expertise
Less uniformity, decreasing business efficiency.

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24
Q

What do logistical managers do

A

They ensure there are the right materials, at the right location at the right time, for the lowest cost.

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25
Methods of production
Job Batch Flow
26
Job production
Where a business manufactures a one off product one at a time, each product is unique and specifically customised to the order of the customer.
27
Advantages of job production
Customisable May be seen as higher quality Can charge a higher price More motivated employees No high startup cost
28
Disadvantages of job production
Higher cost of wages Requires skilled staff, which may make training necessary Human error Less productive than other methods of production due to employee breaks Slower
29
Batch production def
Where a business manufactures many different groups of products, products within all groups are identical, however groups have small variations.
30
Batch production advantage
Small customisability since batches can be adapted for customer requirements Can be capital or labour intensive May not need skilled workers
31
Batch production disadvantages
Employee mistakes can have a huge impact on whole groups of products Employees can be idle in between batches Equipment may need to be cleaned in between batches.
31
Flow production
Where a business manufactures the product on a capital intensive assembly line, which manufactures identical standardised products.
32
Advantages of flow production
Can take advantage of economies of scales Products standardised/identical ensures quality Products can be manufactured 24/7 Decrease wage costs.
32
Disadvantages of flow
Standardised so no customisation High startup cost Low employee motivation Breakdown in equipment can stop production/ be costly
33
Capital intensive production
Producing products that primarily use machinery and equipment, which is typically flow production.
34
Automation definition
Where machinery completely replaces employees manufacturing the product.
35
Mechanisation
Where machines and labour work together to manufacture a product.
36
Capital intensive production advantages
Lower employee wage cost 24/7 productivity Quality is standardised Can carry out dangerous tasks Can carry out repetitive/ boring tasks
37
Labour intensive production advantages
Can customise product Have skilled workers, and will be more motivated Decrease cost of machinery
38
Labour intensive production dsv
Quality of the product isn’t standardised Increase wage costs due to skilled work Workers require breaks so continuous production isn’t available Increases human error
39
Capital intensive production dsv
Can’t customise product High start up cost Demotivated employees A break in equipment could stop production.
40
Labour intensive production
Where a business manufactures a product using workers and employees.
41
Factors affecting the method of production
Finance Quality Technology Skill of workforce Cost of labour Size of market/ demand
42
Methods of quality
Quality control Quality assurance Quality circles Benchmarking Mystery shoppers Quality standards Total quality management
43
Quality control def
Where a business checks the standard of a product at the end of production.
44
Advantages of quality control
Ensures faulty goods aren’t sent to customer Limits the potential for bad reputation
45
Disadvantages of quality control
Creates high waste Products may have to be recycled or reworked if not up to standard, decreasing productivity.
46
Quality assurance
Where a business checks the standard of their product at the end of every stage of production.
47
Quality assurance advantages
Less wastage Easy to identify where there are faults in production
47
Quality assurance disadvantages
Can slow down production Can increase the cost of production
47
Benchmarking
Where a business sets their quality standards to the same as a competitor to steal away their customer base.
48
Advantages of benchmarking
Can steal away customer base of competitor increasing market share Can identify opportunities to save money on production
49
Disadvantages of benchmarking
May not be easy to gather information on competitor production line May need a better marketing mix for the business to succeed
50
Quality circle s def
Where a business gathers a group of workers to come together to suggest improvements and resolve problems in production .
51
Advantages of quality circles
May motivate employees Different backgrounds may gather more p/ better ideas on how to improve production
52
Disadvantages of quality circles
Decreases employees productivity Training may be needed for employees in the focus group to do their job well.
53
Mystery shopper
Where a business employs customers to anonymously buy the product and report back on their experience of the product.
54
Advantages of mystery shopper
Procedures can be improved by feedback May fix bad habits of workers and teach them how to manufacture the product to a higher standard.
55
Disadvantages of mystery shopper
Expensive Staff may feel pressure or threatened by a mystery shopper
56
Total quality management def
Where a business uses multiple different quality methods at once, to ensure that a higher quality level is achieved.
57
Advantages of Total Quality Management
Should result in zero errors in production , increasing business efficiency Motivated staff may be consulted on improving quality standards Customers can be confident in the highest quality of product, establishing brand loyalty.
58
Dsv of total quality management
The increase in quality monitoring will slow down production and cost more money Substantial staff training may need to be undergone
59
Quality standard’s definition
Where an industry have their own set of requirements and guidelines that businesses must adhere to, to receive a mark/award.
60
Adv of quality standards
Proves a specific approved standard is met Can be used as a promotional tool if seen as ethical or environmental
61
Quality standards dsv
Standards of the product cannot be dropped or the business will lose the mark and customer satisfaction It’s time consuming to get an award.
62
Advantages of ethical operations
Awards can be granted which can be used for promotion Can gain a brand loyal customer base concerned about the issue Can gain a motivated staff base
63
Disadvantages of being ethical in operations
May limit choice of supplier Audits are needed to ensure standards are met Increase cost of production
63
Philanthropy
Where a business gives back to those in need.
64
Animal welfare examples
Leaping bunny - cruelty free Free range class eggs Use of synthetic materials instead of animal materials.
65
Fair trade definition
Where suppliers receive a guaranteed fair price for their raw materials
66
Advantages of fair trade
Could be used to promote the product as ethical Better supplier -business relationship Can increase supplier productivity if they are more motivated,
67
Fair trade disadvantages
Losing a fair trade mark may be bad publicity so standards have to be kept Fair trade products are more expensive due to higher cost of production Business has a limited choice of suppliers,
68
Environmental advantages
Their business is sustainable in the future Gains a positive/ ethical reputation Awards can be granted which can be used for promotion Renewable energy can save costs in the long run, due to oil, petrol and gas not needing to be paid for.
69
Methods of being environmentally friendly
Carbon footprint Sustainable raw materials Waste Packaging
70
Methods of being environmentally friendly
Carbon footprint Sustainable raw materials Waste Packaging
71
Ways of improving carbon footprint
Using renewable energy Low emission vehicles More environmentally friendly methods of distribution.
72
Carbon footprint definition
The impact of using fossil fuels on the environment
73
Sustainable raw materials def
Where a business raw materials are not being depleted significantly, and can be used in the long run.
74
Ways of being sustainable
Replanting Reusing or recycling Only use up a certain amount of the raw materials in an area Renewable energy
75
Waste definition
Where a business has a legal responsibility to properly dispose of any production byproducts without harming the environment
76
Methods of environmental waste
Segregate waste appropriately Store waste appropriately Transport waste appropriately and securely
77
Methods of environmentally friendly packaging
Reusable bi products Recyclable Biodegradable
78
Environmental packaging definition
Where a business uses packaging which helps the environment.
79
Use of technology in operations
Epos CAM Email Spreadsheets CAD
80
Epos
Electronic point of sale is used to manage inventory level, and reorder stock
81
CAD
Computer aided design is used to help in developing prototypes of the product and improve operation efficiency.
82
CAM
Can be used to program machines to produce product 24/7, and prevent human error.
83
Spreadsheets
Can be used to plan out production budgets for operations.
84
Email
Email can be used to send out new orders to suppliers.

Higher business (20 decks)

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