Operations Flashcards
(33 cards)
Types of production
Job production,Batch production and flow/line production
Input, Process, Output
Input = Factors of Production (Materials, employees, machines, land)
Process = Job Production, Batch Production, Line Production
Output = Finished Product
Suppliers
Raw materials are the different items need to make somthing
Factor 1:
Cost of raw materials
What does this mean?
The price charged by a supplier to purchase raw materials
Why is this important?
> Costs need to be kept as low as possible to make a profit.
> Low costs will improve the cash flow of a business.
Factor 2:
Quality of raw materials
What does this mean?
How good the raw materials are.
Why is this important?
> Without high quality raw materials, the finished product will not be of a high quality.
Low quality raw materials will probably result in higher wastage.
Factor 3:
Lead time/delivery
What does this mean?
How long it will take to receive the raw materials from when an order is placed
Why is this important?
> Some raw materials need to be used quickly (eg fresh food) or they might go off.
Without raw materials being delivered on time, production might have to go on stop, which is costly.
Factor 4:
Quantity of raw materials
What does this mean?
How much raw materials are required
Why is this important?
> There needs to be enough raw materials to allow production to continue, however, not too much otherwise this can be expensive for storage
Correct quantities of raw materials are required to satisfy customer demand.
Factor 5:
Location of supplier
what does this mean?
Where the supplier is located, eg which town or city and how far away it is.
Why is this important?
> The further away the supplier is, the longer the raw materials will take to be delivered
The cost of transporting products has to be considered.
Factor 6:
Reliability and reputation of supplier
What does this mean?
Reliability - will the supplier deliver when they say they will?
Reputation - what people think of the supplier
Why is this important?
> If the supplier does not deliver on time, this might cause production to stop and customers might not get their order on time
Suppliers with a good reputation are likely to get more business compared to one that has a poor reputation
Factor 7:
Storage space available
What does this mean?
How much space the business has in a warehouse to hold the raw materials until they are needed.
Why is this important?
> Raw materials might be wasted if they cannot be stored in the correct place.
Storage costs (eg insurance) can be expensive.
