Operations Flashcards
Factors impacting Inventory levels
Storage facilities
Security to prevent theft
Shelf life of product
What are the 5 inventory levels
Maximum inventory level
Minimum inventory level
Re-order level
Re-order quantity
Lead time
What is Just in time (JIT) inventory control
This is a method of inventory control where inventories arrive just before they are needed in the production process.
What are some advantages of JIT
Money is not tied up in inventory and this improves cash flow.
Warehousing costs are reduced.
Less waste
What are some disadvantages to JIT
Late deliveries can hold up the production process.
It is possible that the organisation will find it hard to cope with unexpected increases in demand.
What are some advantages of Job production
It allows for customer to ask for products which meets their exact requirements.
Allows for higher prices to be charged
What are some disadvantages to Job Production
Production can be time consuming.
Specialist equipment is required which could be costly.
Highly skilled workers may demand high wages.
What are some advantages of Batch production
This method reduces the need for highly skilled, costly staff.
This method allows for cheaper production than through job production as some bulk buying can occur and through the use of some standardised equipment.
What are some disadvantages of batch production
However, time can be lost through the cleaning and resetting of machinery between batches.
Any mistake within a batch results in the entire batch being wasted.
Also, as workers complete more repetitive tasks, motivation can be lower than in job production.
What are some advantages of Flow production
Costs are spread over a large number of goods and therefore the unit cost falls.
As large quantities of goods are produced discounts are obtained for purchasing raw materials in bulk.
The process is heavily mechanised or automated and saves labour costs. This means that the quality of output is very consistent.
What are some disadvantages to flow production
However, the employees who process or carry out low or unskilled tasks meaning that their motivation is poor.
The machinery and robots required is extremely expensive to install
if the machinery/robots break down, production will completely halt, meaning productivity is lowered.
What are some factors that determent what method of production is used.
The actual product being made
The size of the market
The size of the business
The finance available
The technology available
The workforce available
What are some advantages to capital intensive production
Machines can work in conditions that humans can’t
Machines can work 24/7
Machines consistency and accuracy is higher than a humans
What are some disadvantages to capital intensive production
Installation costs are high
If repairs are needed production is haulted
employees involved are likely to be low skilled and poorly motivated.
What are some advantages of labour intensive production
Highly skilled staff are likely to be highly motivated leading to greater output
Employees are more flexible than machines and can make last minute adjustments to products to suit customer demand.
