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Business > Operations > Flashcards

Operations Flashcards

1
Q

Describe the role of operations in a business

A

Is to produce goods and services to a suitable standard as efficiently as possible

Operations staff will do this by managing the production process for the business

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2
Q

Outline the production process

A

Inputs - raw materials and labour

Process - using different amounts of different resources in order to produce a different end product

Outputs - the actual goods or services for sale

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3
Q

Describe how people are involved in the production process

A

INPUTS
Stock control
Choosing suppliers

PROCESS
Factors of production
Quality issues
Ethical production ready for distribution 
Methods of production

OUTPUTS
Customer service
Finished product

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4
Q

Describe the input issue of choosing a supplier (purchasing mix)

A

Deals with deciding who the business should buy stock from and this is called the purchasing mix

This involves buying the raw materials and other resources used in the production process for example flour, cloth, metal etc

An important part of purchasing is picking a suitable supplier to buy materials from

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5
Q

Identify and describe factors to consider when choosing a supplier

A

Quality
Should be at an acceptable level for the goods being made

Quantity
Supplier must be able to deliver the required quantity

Delivery time
Goods must be delivered when the organisation needs them

Delivery charges
Does the supplier charge for delivery?

Dependability/reliability
Supplier must be likely to stay in business and be reliable to meet the needs of the organisation

Price
Price must reflect the quality of goods received and show value for money

Discount
If bulk purchases made will the organisation be given discount and at what level?

Credit terms
What length of credit will the organisation be given

Location
Supplier should be able to deliver within a reasonable distance so reducing delivery costs and ensuring prompt delivery

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6
Q

Describe stock inventory

A

Stocks of materials must be held - either raw materials, work-in-progress or finished goods waiting to be sent to customers. The control of these stock levels is essential to ensure resources are not wasted

The operations department must ensure that the correct levels of stock are available to ensure that orders are met while making sure that there is not too much stock which could go out of date or perish. Or too little stock meaning that customers do not get their goods on time

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7
Q

Describe the maximum inventory (stock) level

A

This is the highest level of stock that should be held at any one time

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8
Q

Describe the Minimum Stock Level

A

This is the stock level that ensures that there will always be stocks available for production, allowing for ordering and delivery times

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9
Q

Describe the Re-order Level

A

This is the level at which new stock should be ordered. Usually worked out on the amount used per day plus the LEAD TIME (delivery time for new stock)

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10
Q

Describe the are-order quantity

A

This is the amount of stock required to return stock levels to economic stock level on the same day that new stocks arrive. Normally the re-order quantity is automatically ordered as soon as the re-order level is reached

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11
Q

Describe lead time

A

This is the time from placing the order to the goods being delivered

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12
Q

Outline the purpose of a stock inventory control diagram

A

Illustrates the process involved in stock control

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13
Q

Describe computerised stock control

A

Large businesses such as the major retailers use computerised systems such as EPOS (Electronic Point of Sale) to manage stocks of tens of thousands of items, some of which are replenished several times a day. As stocks arrives, and again as it is sold, scanning of bar codes keeps the stock levels up to date

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14
Q

Give advantages of computerised stock control

A

Avoids over-stocking and under-stocking this means that stock levels will be known at all times

Reduces the need for manual stock-taking

Can be linked directly to the supplier meaning goods are ordered automatically

Can identify bestselling products

Stock can be re-ordered automatically when the re-order level is reached. This means production is not affected

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15
Q

Describe problems with overstocking

A

Costs - insurance, heating and lighting, wages of warehousemen (security), space taken in storage meaning less profit for the business as this would result in increased costs

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16
Q

Describe problems with overstocking

A

A great deal of cash is tied up as stock is a very expensive item, meaning less money for other areas of the business which could be making a profit

Stock could perish, deteriorate, be stolen or become obsolete depending on the type of stock and how long it is held for meaning less profit for the business as this would result in increased costs

If social factors change (trends/fashion), the stock might be wasted

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17
Q

Describe problems with understocking

A

The business may not be able to cope with an unexpected order if stocks are low. This may upset customers who may take their business somewhere else

If there are not enough stocks, production may have to be stopped - machinery will be idle and sales may be lost. This means less profit as well as having to pay staff who are doing nothing

The firm may have to place orders more often - this means high administration costs and the firm may lose out on discounts for bulk buying

Customers are being let down this means the reputation of organisations may suffer

Greater chance of theft by employees meaning increased costs as more stocks has to be bought and lost production if parts are missing

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18
Q

What has to be considered when choosing the choice of production method

A

The type of product being produced
The technology available in the business
The size of the business

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19
Q

Describe capital intensive production

A

Relies on mainly machinery in the production process.

A standard product can be produced more easily this means fewer flaws and less complaints

Production can use less labour and low skilled labour which costs less money

Production can be operated 24/7 which can help satisfy demand

Machines can break down which means production stops and employees are idle

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20
Q

Describe labour intensive production

A

Where mainly people are used instead of machinery

One off products are easily created which means individual customer needs can be met

Requires use of craftsmanship/a skilled labour force so this can be expensive

Uses job production

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21
Q

Compare capital and labour intensive production

A

Capital-intensive organisations rely heavily on machinery in production WHEREAS labour intensive rely heavily on their workers

A standard product can be produced more easily with capital intensive WHEREAS individual, one off products are easily created with labour-intensive

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22
Q

Give benefits of labour intensive production

A

Employees can be creative and use their own initiative

Labour is usually readily available

No need to purchase expensive equipment

One off and unique products can be easily made

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23
Q

Give costs of labour intensive

A

It is expensive and takes time to recruit, select and train new employees

Employees require specialist skills, which can take time to learn and may have to undertake training

The quality of the work can vary depending on who is making it

24
Q

Give benefits of capital intensive production

A

Machinery doesn’t need breaks -it can work 24/7

The product being made is of a standardised quality

Fewer employees are required to be paid

Employees require fewer skills to work machinery compared to labour intensive production which saves costs

25
Q

Give costs of capital intensive

A

Expensive to buy machines and equipment

Individual customer requirements can not be met

Breakdowns can be expensive and cause production to stop

26
Q

Identify the three methods of production

A

Flow production
Batch production
Job production

27
Q

Describe flow production

A

Continuous process with production flowing from one operation to the next. Each stage adds to the production

This type of production often uses a production line for mass production of goods to the same specification

E.g. cars and paper

28
Q

Give advantages of flow production

A

The large scale production means that the organisation can benefit from economies of scale this means they can buy in bulk and obtain discounts so that cost of production per unit falls as output increases

Bulk discounts can be agreed with suppliers this means more profit as products cost less to produce

Production can use less labour and low skilled labour which costs less money

A standard product can be produced more easily this means fewer flaws and less complaints

29
Q

Give disadvantages of flow production

A

Machines can break down which means production stops and employees are idle

Employees can be less motivated due to boring repetitive tasks this can mean poor quality goods, absences and high staff turnover

Machinery can break down which can mean increased costs and loss of production

30
Q

Describe batch production

A

Products or batches of similar products are made together. They do not move to the next stage of production until all are ready. The products are similar but different ingredients may be used for different varieties of the product.

E.g. chocolate - e.g. dairy milk, fruit and nut
Soup - e.g. tomato, chicken, lentil

31
Q

Give advantages of batch production

A

Different batches will suit different customer tastes. This means more of the market can be targeted with products.

More machinery can be used this means less staff which saves money on salaries

Using machines means less mistakes which means less mistakes and wastage

32
Q

Give disadvantages of batch production

A

Small batches means the cost of the product can be high as production has to be halted and changed frequently

Staff can be less motivated this can mean absences, poor quality of work and so lost profit

33
Q

Describe job production

A

This is where a company produces a single product or small number of products to specific customer requirements. It may be a one off job to suit a customers particular requirements

E.g. designer wedding dress and wedding/birthday cake

34
Q

Give advantages of job production

A

A high price can be charged for goods. This means more profit for the business

Employees will be more motivated this means they will produce high quality products and stay with the organisation

Products are made to the customers specification meaning they should be satisfied with the finished product

35
Q

Give disadvantages of job production

A

Highly skilled staff are needed this means high wages for the organisation

Specialist equipment may be needed this means expensive outlays for the organisation

36
Q

Define the term quality

A

Means ensuring that actual products and services meet customer requirements

37
Q

Describe the importance of quality to a business

A

Today’s highly competitive markets mean that quality products are extremely important to a firm

To ensure that customers keep coming back and to avoid complaints, businesses must deliver products to customers which satisfy their needs and give good value for money

All businesses have to set standards of quality for each product or service they make. They also have to make sure that they meet these standards

38
Q

Identify methods of measuring quality

A 
Quality control 
Quality assurance 
Quality circles 
Benchmarking 
Quality management 
Quality inputs
39
Q

Describe quality control

A

Quality is checked at the beginning (inputs) and end (outputs) of the production process only. Unacceptable products are either scrapped or put back for reworking

40
Q

Describe quality assurance

A

This method is based on prevention of errors. It aims to create a situation in the production process where ‘right first time, every time’ becomes a real possibility. To achieve this quality is checked at every stage of the manufacturing process.

41
Q

Describe quality circles

A

Groups of workers meet at regular intervals to discuss quality and how to improve the production process.

42
Q

Describe benchmarking

A

Identifying the best performers in an industry and trying to match them. This best method then becomes the quality standard which the organisation can follow

43
Q

Describe quality management

A

Continuous process where each employee takes responsibility to ensure quality is consistent with every product

44
Q

Describe quality inputs

A

Raw materials
Need to be of quality in order to obtain a quality final product

Staff
Must be well trained, so they are competent and are all working to the same quality standards

Machinery
Machines need to be maintained so that they do not make mistakes affecting quality.

45
Q

Describe a business being socially responsible

A

This means they will be seen in a positive way by not harming the local environment or the community

46
Q

Identify and describe ways that businesses can be environmentally friendly

A

Try to minimise wastage: by making sure employees are trained, machinery is kept in good condition and by not overstocking this will help reduce costs for the business

Try to minimise packaging: by only using the necessary amount of packaging to maintain the products quality. This will mean costs go down and it is also good for the environment

Prevent pollution: by watching the materials it uses in production (eg fuel and chemicals) and by disposing of any potentially harmful chemicals or products in the most environmentally friendly way. Businesses who don’t dispose of waste carefully could be prosecuted this would mean a poor image for the business

47
Q

Describe ethical production

A

Social responsibility can also include using ethical production in terms of sourcing raw materials, producing and distributing goods

48
Q

Give costs of ethical production

A

More expensive to purchase environmentally friendly/Hybrid vehicles

Costs of using ethical suppliers may be higher

Efficiency may fall, ethical distribution may reduce amount of deliveries

49
Q

Give benefits of ethical production

A

Gives a competitive edge over rivals

Creates a positive image for the business

Customer loyalty could increase/attract new customers

Reduces environmental damage/pollution

50
Q

Describe how businesses can recycle

A

By encouraging employees to put rubbish in appropriately coloured bins and by re-using materials in the production process as much as possible

51
Q

Give advantages of recycling

A

Items can be reused to make new products

Takes less energy to recycle than to extract new materials

Limits the items ending up in landfills

Improves the image of an organisation as being environmentally friendly

May be cheaper to produce using recycled materials

52
Q

Give disadvantages of recycling

A

Need to be sorted into different categories which can take time to do

Some items can only be recycled a limited amount of times ie. paper

Products may be seen as inferior

May reduce quality

53
Q

Describe how ICT is used in operations

A

Processing products in batches
Allows many similar standardised products to be made using pre-programmed machinery

Online ordering system
Streamlined ordering system with quicker timescales between online ordering and delivery, meaning higher levels of customer satisfaction

54
Q

Describe CAD

A

CAD is the name given to software programs that allow the user to create drawings, plans and blueprints using computers

Previously these drawings would have been done by hand. Architects, graphic designers, engineers and designers can now produce drawings in both 2D and 3D that will allow the client to see images of what the final product will look like. This could be a new kitchen, car, electrical product.

55
Q

Describe CAM

A

Computer-aided manufacture (CAM) is the name given to manufacturing systems that are automated.

The machinery and robots used in the production process are controlled by a computer.

The computer gives instructions that can be changed at short notice if necessary, or to facilitate small changes in the design.

The use of CAM allows precision in the manufacturing process and it also reduces the number of employees required

56
Q

Describe Electronic Point of Sale (EPOS)

A

This is when customers hand over their money to buy goods and services and a printed receipt is given with details of the purchased item.

The EPOS system scans the barcode of each item which looks up the price of the product and deducts the item from the total stock balance

This allows the business to keep track of stock sold. It is also a helpful system to track which products are selling well

Business (5 decks)

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