Unit 3 Assessment - Operations Flashcards
INVENTORY MANAGEMENT SYSTEM
describe maximum stock level
The maximum stock level is the physical limit of space available for stock at the lowest cost for the company without the risk of running out of stock.
INVENTORY MANAGEMENT SYSTEMS
describe the minimum stock level
The minimum stock level is the stock level which ensures that there will always be enough stock available for production and allows for ordering and delivery times.
To calculate it you must take into account the daily stock usage.
INVENTORY MANAGEMENT SYSTEMS
Describe the re-order level
The reorder level is the level at which new stock should be ordered to ensure that stock does not go below the minimum stock level.
To calculate this the daily stock usage and the suppliers lead time must be taken into account.
INVENTORY MANAGEMENT SYSTEMS
Describe the re-order quantity
The re-order quantity is the amount of stock that is required to return stock levels to the maximum level again.
METHODS OF PRODUCTION
Describe Job Production
Benefits and Disadvantages
Job production is when a single product is completed from start to finish before another ‘job’ can begin.
They are usually made to order on a customers exact specifications.
Benefit - organisation of production is relatively simple, suitable for ‘one off orders’ which can be specifically designed for the customer.
Disadvantage - production costs may be high, wages may be high as workers may require highly developed skills, production can be time consuming.
METHODS OF PRODUCTION
Describe Batch Production
Benefits and disadvantages
Batch production is when a group of products are made simultaneously, they often have a marked degree of similarity however ingredients can be altered and varied.
Benefit - flexible as individual batches can be designed to meet the requirements of individual customers, allows for some specialisation as workers can concentrate on one specific stage in the process.
Disadvantage - small batches can mean higher costs of production per unit, if batches differ from each other then delays may occur in changing machinery.
METHODS OF PRODUCTION
Describe flow production
Benefits and disadvantages
Flow production uses a production line and the product will pass through various stages along the line and component parts are added at each stage.
Benefit - economies of scale can be gained through specialisation of machines/workers which leads to lower costs, costs of stockholding reduced through systems like just-in-time.
Disadvantage- standardised product which may not meet the requirements of all customers, work on production lines tends to be boring and repetitive.
TECHNOLOGY IN PRODUCTION
Describe Computer Aided Manufacturing (CAM)
Computer aided manufacturing is where processes in production are controlled by a computer.
This allows for higher production efficiency levels as greater speed and accuracy can be achieved which increases profitability.
TECHNOLOGY IN PRODUCTION
Describe robotics/automation
Robots are used in many manufacturing plants to replace humans in production.
This reduces labour costs as less physical workers are required which in turn increases profitability.
TECHNOLOGY IN PRODUCTION
Describe Computer Aided Design
Computer aided design is 3D design software that is used design stage of manufacture to model produce prior to manufacture.
This allows the business to modify the design of products and manufacture a range of products to crate variants which will suit customer needs, increasing customer satisfaction.
PURCHASING MIX
What is the purchasing mix?
The purchasing mix is the criteria used in the process of selecting a good quality supplier.
PURCHASING MIX
Describe quality
If the business buys inferior quality goods then this will affect production and could result in poor quality finished products.
This can affect customer satisfaction and could result in product recalls and returns.
PURCHASING MIX
Describe quantity
The business needs a supplier who can consistently supply the appropriate quantities of supplies needed for production.
The supplier must be able to meet the demand or production will be halted.
PURCHASING MIX
Describe delivery
The supplier must have consistent delivery and be able to guarantee delivery on time, if not production will be halted.
PURCHASING MIX
Describe price/terms
If the supplier is able to offer a good price with credit terms/bulk buying discounts then this will increase profit margins for the business and ease cash flow situations.
