Operations

Question 1

Inventory Management System

Answer 1

Maximum - Most amount of inventory held
Avoids overstocking

Minimum - Least amount of inventory that should be held
Avoids understocking

Re-order Level - Level which inventory is re-ordered
Avoids running out of inventory

Re-order Quantity - Amount ordered
Ensures quantity ordered isn’t too much or too little

Lead Time - Time taken between order placed & inventory arriving
Allows business to react to rush orders

Buffer Inventory - Extra inventory to be used in emergencies
Ensures production doesn’t stop & sales are continued to be made

Question 2

Centralised Storage

Answer 2

Storing inventory in one central location in a large, purpose-built warehouse

Question 3

Centralised Storage - Advantages

Answer 3

Staff employed to maintain inventory
- Improves speed of inventory handling

Can store massive amounts of inventory
- Benefits from economies of scale

Same procedures for issuing inventory used across organisation
- Improves consistency

Located close to infrastructure
- Easier for suppliers to deliver inventory

Question 4

Centralised Storage - Disadvantages

Answer 4

Inventory delivered to each department
- Causes delays

Specialist staff employed to maintain inventory
- Increases wage costs

Specialist equipment needed
- Expensive to purchase & maintain

Question 5

JIT

Answer 5

Ordering supplies only when required for production

Question 6

JIT - Advantages

Answer 6

No money tied up in inventory
- Improves cash flow

No warehouse required
- Saves costs

Lean production
- No waste

Question 7

JIT - Disadvantages

Answer 7

Late deliveries mean understocking
- Delays in production

Requires good relationship with suppliers
- Takes time to develop & maintain

No room for error in production

Question 8

IT

Answer 8

Used to purchase supplies quickly

Question 9

EPOS

Answer 9

Can automatically re-order depleted inventory

Question 10

Computerised Systems

Answer 10

Can check & find inventory

Question 11

Automated Systems

Answer 11

Can track deliveries

Question 12

Spreadsheets

Answer 12

Accurately & quickly produce production budgets

Question 13

CAM

Answer 13

Used in automated production

Question 14

CAD

Answer 14

Used to design item before manufactured

Question 15

CAD - Advantages

Answer 15

Reduces space needed
- Hard copies of drawings not needed to be stored

Accuracy
- Less human error in drawing measurements

Layouts can be saved to use again
- Saves time

Question 16

CAD - Disadvantages

Answer 16

Less people required to create CAD drawings
- Impact on unemployment

High expenses

Staff need trained in how to use software
- Takes time & money

Question 17

Automation

Answer 17

Production is fully automatic

Question 18

Automation - Advantages

Answer 18

Robots can do jobs dangerous for humans

Robots can work 24/7

Human control not needed, less employees, reducing wage costs

Concentration not lost, fewer mistakes made which limits waste

Consistent

Question 19

Automation - Disadvantages

Answer 19

Expensive to invest in

Breakdowns can lead to hours of production being lost

Will demotivate employees due to replacement

Lack of creativity

Question 20

Ethical Issues

Answer 20

Philanthropy
Animal welfare
Fair trade

Question 21

Ethical Issues - Advantages

Answer 21

Awards granted for being ethical

Can attract customers that agree with their principals

Question 22

Ethical Issues - Disadvantages

Answer 22

Audits needed
- Time consuming

Complex decision-making

Question 23

Fair Trade

Answer 23

Suppliers of raw materials receive a guaranteed & fair price for their goods

Question 24

Fair Trade - Advantages

Answer 24

Awarded Fairtrade mark
- Appealing to customers

Demonstrates ethical commitment to customers

Question 25

Fair Trade - Disadvantages

Answer 25

Losing Fairtrade mark can result in bad publicity More expensive Limited choice of suppliers

Question 26

Environmental Issues

Answer 26

Carbon footprint Sustainable raw materials Waste

Question 27

Environmental Issues - Advantages

Answer 27

Gains a positive reputation Awards granted for being environmentally friendly

Question 28

Environmental Issues - Disadvantages

Answer 28

Investment in measures is expensive Environmentally friendly procedures rely on natural environment

Question 29

Quality Standards

Answer 29

Proves a product has met agreed industry standard

Question 30

Quality Standards - Advantages

Answer 30

Awards prove to customers that product has met agreed standard of quality Symbols used as promo tool to gain competitive edge Customers have confidence in purchasing product Higher prices charged as quality is high

Question 31

Quality Standards - Disadvantages

Answer 31

Time-consuming processes endured to receive awards Agreed standards need maintained at all times If award is removed, business would gain a bad rep Annual checks by awarding bodies can disrupt production

Question 32

Automation

Answer 32

Fully automatic production A - Can do jobs dangerous for humans - Don't take breaks, can work 24/7 - Reduced wages as less staff needed - Consistent D - Expensive to set up & maintain - Breakdowns lead to hours of production lost - Demotivates employees - Lack of creativity

Question 33

Mechanisation

Answer 33

A - Improves accuracy - Speeds up production D - Humans require breaks - If machinery breaks, business has to repair it

Question 34

Labour-Intensive Production

Answer 34

A - Less expensive than capital intensive - Creative D - Risk of human error - Humans require breaks - Have to be paid overtime

Question 35

Quality Control

Answer 35

Inspecting raw materials or finished goods to see if they're acceptable A - Ensures faulty goods not sent to customers - Limits potential for bad rep D - Creates waste if goods not checked till made - Products have to be reworked, expensive

Question 36

Quality Assurance

Answer 36

Products checked at different stages A - Less waste - Easy to identify where problems lie D - Slows down production - Increases cost of production

Question 37

Continual Improvement

Answer 37

Always attempting to improve quality A - Stays ahead of competition - Business can react to external factors D - High staff-development costs - Employees feel under pressure to keep improving

Question 38

Quality Circles

Answer 38

Employees meeting with managers to discuss problems A - Employees motivated as they have a say in decision-making - Management get well-informed suggestions from workers D - Meet during company time, production time lost

Question 39

Benchmarking

Answer 39

Copying quality of finished product A - Product will be best on market - Saves time developing own approach to ensuring quality D - Difficult to gain info on other businesses' methods - Only ever as good as benchmark

Question 40

E-mail

Answer 40

Used to purchase supplies quickly

Question 41

Internet

Answer 41

Used to research supplier prices