Operations Flashcards
What is 5 cons of overstocking
Supplies go out if date
Supplies go out if fashion before sold
Staff theft
Firm has to pay for stockholding costs
Money can’t be used elsewhere as tied up in stock
4 cons of under stocking
Firm may run out of inventory and therefore production haulted or no sales made
Firm miss out on bulk buying discounts due to making small orders
May be no goods for firms to sell and customers will have to be turned away which gives firm a bad rep
Increased delivery charges since several small ones have to be made
What is JIT
When a firm orders supplies when they are required for production or an order by a customer is placed
4 pros of JIT
No money tied up in stock
No where house saves costs
No wastage
Firm more flexible to changing external factors
4 cons of JIT
if deliveres late firm understocked
Requires excellent relationship with suppliers to work effectively which can take a lot of time to develop
No room for errors in production
Supplier becomes responsible for taking care of stock
What is centralised storage
Involves all inventory being held in one large central located warehouse
4 pros of centralised storage
Specialist staff employed therefore more efficient and secure
Can get bulk buying discounts as can store such large orders
Easier to track stock
May be cheaper to have one larger warehouse than several small
Centralised storage 3 cons
Specialist staff means a higher wage bill
Specialist equipment needs to be bought and maintained
Long delivery times
What is decentralised store age
Involves inventory being stocked in small warehouses or store rooms
4 cons of decentralised
Theft may be higher as security not as good in smaller warehouses
Lack of specialist staff means inventory control can be inefficient
Stock harder to track
Smaller amounts of inventory in each warehouse may lead to undertsockimh
3 pros of decentralised
Short delivery times as warehouse always close
Smaller local warehouses more suited to local needs
Smaller amounts of inventory means no overstocking
What is job production
Production of a single specialised product
What’s batch production
Production of similar products in batches
What’s flow production
Production of products constantly
3 pros n 2 cons of job production
High price can be charged as product unique
High customer satisfaction
Quality often higher
Expensive labour costs
No bulk buying
Batch 2 pro 3 cons
Individual batches can be made to suit customer wants therefore satisfaction higher
Less skilled labour therefore higher wastage
Long time to clean machine and prepare for new batch
Staff demotivated as work is boring
Machinery needs more space and costs a lot more
Flow 3 pros 2 cons
Bulk buying opportunities
High output so firm can charge a low price therefore max their sales
Quality easier to control as product standardised
Expensive machinery required for production
Repetitive working therefore workers demotivated
What is capital intensive
Products mainly produced by machinery and equipment
What is the two types of capital intensive
Automation or mechanised
What is automation production
Fully automatic
Uses robots
4 positives of automation production
High consistency
CAM doesn’t loose focus so fewer mistakes
Robots can do dangerous jobs
Robots don’t need breaks or holidays
4 cons of automation
Huge investment needed to make automatic production line
Breakdowns can be catastrophic loosing hours of production time
Demotivated employees if robots replacing them
Absence of human touch means a lack of creativity
What is medhanastion production
Labour and machines working together in production
3 pros of mechanisation production
Using machinery decreases chance of human error
Use of machinery can speed up production
Creativity still there as human aspect still involved
