Operations Flashcards
What’s operations
To produce goods and services to a suitable standard
Minimum amount of money in maximum out
What is the production process
Input -raw materials
Process-raw materials are combined
Output-finished good ready for consumption
What interactions does the operations department have with marketing
• Product appeals to customer
• Where to distribute product
• Research and development of products
What interactions does the operations department have with finance
• Department budget
• Payment methods
• Suppliers to use
What interactions does the operations department have with Human Resources
• Recruitment and selection of staff
• Staff training
• Disputes or fights involving staff
What are some factors to consider before choosing a supplier
Purchasing
Price cost of raw materials
Discounts available
Quality of raw materials
Lead time
Location of supplier
What is lead time
How long it takes for the product to come after the order is placed
Why is reliability important
If the supplier is not reliable you may not revive products in time
What is stock control
Deals with keeping the correct amount of goods stock in a business
What is a consequence of having too much stock
Lots of space taken up (high storage costs)
What is the consequence of having too little stock
Business can’t cope with high amount of orders
Under stocking consequences
• Production slows down or stopping altogether due to lack of materials
• Orders not being fulfilled in time, leading to dissatisfied customers • Not being able to accept more orders, resulting in a loss of sales • Having to make frequent orders for small quantities of inventory resulting in hire admin costs
Overstocking consequences
• The consequences
• Money being tied up in inventory that could have been spent more effectively else where • Inventory deteriorating or becoming obsolete before it is used leading to high amounts of waste • Increased storage and insurance cost, meaning a reduction in profit • It becomes easier for staff to steal inventory undetected
What is under stocking
when a business holds to little stock or inventory to operate efficiently
Overstocking
is when a business is holding more inventory than required
