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Unit 3 Business Operations Flashcards

(56 cards)

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1
Q

What is efficiency

A

How well a business uses its recourses to produce a product-Average unit cost
Lower AUC = More efficient

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2
Q

What are the 4 ways of becoming more efficient

A

Economies of scale
Lean production
Just in time
Kaizen

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3
Q

What is lean production

A

Reducing waste whilst ensuring quality

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4
Q

Name some types of waste

A

Over production
Waiting time
Transport
Stock expiring
Motion-Production line
Defects

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5
Q

What is just in time

A

Stock arrives just when it is needed

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6
Q

What is kaizen

A

Small continuous improvements within a business
Employees are encouraged to to suggest improvements as they deal with the processes on a daily basis

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7
Q

What are the benefits of kaizen

A

Improves quality and efficiency
Easier to implement as ideas come from employees
Improves motivation and productivity
Improves staff retention

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8
Q

What is production

A

The process of turning raw materials into good and services that can be sold

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9
Q

What are the 2 types of production

A

Job production Flow production

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10
Q

What is job production

A

A product is produced that meets specific customer requirements
Labour intensive

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11
Q

What is flow production

A

The continuous movement of items through the production process, uses production lines
Capital intensive

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12
Q

What are the benefits of job production

A

Produces high quality products
Made to meet specific requirements of each customer
Higher prices can be charged
Greater job satisfaction for workers
Business may find it easier to differentiate itself from rivals

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13
Q

What are the drawbacks of job production

A

Unit costs are higher
Labour intensive process
Requires high skilled employees who may demand higher wages

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14
Q

What are the benefits of flow production

A

Can produce on a larger scale
Less labour intensive
Workers can specialise and become more efficient
Production lines can run 24/7 - Higher output
Consistent standard quality
Lower unit costs

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15
Q

What are the drawbacks to flow production

A

Inflexible due to use of machinery
Jobs are repetitive-Lower staff motivation
Initial set up costs can be high
Machines breaking down can result in lost time
Lower skilled labourers required-Higher staff turnover
Products may be too similar to rivals

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16
Q

What is procurement

A

Managing the ordering and receit of goods and services in the business

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17
Q

What does procurement involve

A

Deciding what is needed
Selecting suppliers
Terms of payment
Negotiating contracts with suppliers
Managing how goods are ordered and received
Managing logistics

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18
Q

What is logistics

A

A process which plans implements and controls the distribution of goods and services from when they are received from the suppliers to when they are delivered to customers (Transport)

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19
Q

What is Just in time

A

Minimum amount of stocks of raw materials and finished good are held by the business

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20
Q

What is just in case

A

Business holds buffer stock and raw materials in case there is a delivery issue of change in demand

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21
Q

What are the benefits of Just in time

A

Less storage space is required reducing costs
Less money is tied up in stock- Improves cash flow
Products are less likely to perish or become obsolete
Avoids being left with stock that cannot be sold due to decrease in demand

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22
Q

What are the problems of just in time

A

No spare stock if mistakes occur or there is a sudden increase in demand
Reliant of suppliers being on time
No benefits of economies of scale from bulk buying

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23
Q

What are the 4 key evaluation points for Just in case

Study These Flashcards
A

Careful planning is required
Works well when demand is consistent
Good relationships with suppliers is essential
Works if suppliers are nearby

24
Q

When is just in case often used

Study These Flashcards
A

When demand is unpredictable
Suppliers are not nearby
Storage is not expensive

25
What are the benefits of just in case
Stock is available for reworking faulty products or meet increase in demand Production is less reliant on suppliers so if stock is not delivered production will not stop Spare finished products are available to meet unexpected orders which can increase level of customer service Economies of scale available from bulk buying
26
What are the problems of just in case
Needs more storage space which increases costs Money is tied up in stock so not available for other purchases Stock may go out of date or out of demand-Loss of profit Build up of unsold products leading to higher stockholding costs
27
What are the factors affecting choice of supplier
QUALITY PRICE RELIABILITY Customers Cash flow Speed Location Rivals Gov policy
28
How does price affect choosing suppliers
Cheaper supplier can increase profit margins Allow business to reduce prices Important in competitive market But cheaper supplier may affect quality
29
How does quality affect choosing suppliers
Good quality raw materials = Good quality product = Higher customer satisfaction But higher quality = Higher prices
30
How does reliability affect choosing suppliers
Knowing supplier will meet deadlines and quality requirements is important Especially when using JIT
31
Why are suppliers important
To meet needs and wants of customers business needs effective supply chain Suppliers determine may costs of the business Suppliers are closely linked to quality Effective relationships with suppliers are essential for lean production
32
What are the effects of procurement and logistics
Efficiency Lower unit costs
33
What is the supply chain
The network of organisation that gets products to customers
34
What is supply chain management
Ensures the right quantity of goods are in the right place at the right time and these are provided at the right quality and at a price that represents value for money
35
What are the benefits of supply chain management
Increased efficiency-Dispatch times can be reduced Lower unit costs- Negotiate prices with suppliers Competitive advantage-Cost saving can be passed on to customers through lower prices or business can have larger profit margins Improved flexibility-Members of supply chain can work together
36
What are the drawbacks of supply chain management
Quality may suffer if prices are driven down too low Sophisticated IT systems to monitor supply chain can be expensive to implement
37
What is quality
A products is good quality if it meets expectations of customer
38
What are the consequences of quality issues
Loss of customers-Dissatisfaction Damaged reputation Costs of recalling, scraping or remaking Costs of replacements or refunds Costs of reducing prices of products no ones buying Legal action may be taken
39
Why is quality important
Markets are highly competitive Customers today are more knowledgeable, demanding, prepared to complain and able to share information quickly through social media
40
How do we judge quality
Design Functionality Reliability Consistency Durability Good after sale service Price/Value for money
41
What are the benefits of good quality products
Customer satisfaction Repeat purchases Customer recommendation Lower marketing costs Higher customer loyalty Price insensitivity
42
What is quality control QC
A traditional method in manufacturing. All or a sample of products are checked at THE END of the production process
43
What are the pros of QC
Protects standard of products Customers in theory will not receive substandard products
44
What are the cons of QC
Wasteful as products which do not need standards are thrown away Workers are less likely to take responsibility for errors Costs of inspectors is high
45
What is quality assurance QA
The process of ensuring products meet specified requirements and standards that satisfy customer expectations
46
What are the pros of QA
Better quality-Makes sure products are good by fixing products Saves money-Helps find and fix issues early preventing expensive mistakes
47
What are the cons of QA
Time consuming process, it slows production down because thorough manuals are created and checks throughout the process are conducted Involves investments in tools training and personnel which can be expensive
48
What is Total quality management TQM
Method of maintaining consistent quality Quality assurance approach where all employees have the target of zero defects and responsible for quality
49
What are the advantages of TQM
Quality is embedded into business therefore few quality issues AUC reduced leading to increased efficiency Improved employee motivation Better relationship between employees and managers resulting in higher productivity Quality improvements can be easier to implement as all staff are part of TQM process
50
What are the costs of TQM
Costs of maintaining consistent levels of quality Costs of training Time used for quality circle meetings Reputation may be damaged if quality standards are not met by outsourcing partners
51
What are the 3 methods of good service
Know your product or service Engage with customer Good post sales service
52
What are the benefits of good customer service
Increased sales Customer retention/Loyalty Word of mouth promotion Enhances public image More effective work force Lower costs Improved profitability
53
What are the consequences of poor customer service
Loss of loyalty Loss of sales Customers may not report problems Unhappy customers spread the word
54
Why are websites good for customer service
Provides accurate product information FAQs, location, opening hours, stock availability Advertise to a wider market Contact us = Customer engagement
55
Why is ecommerce good for customer service
Convenience- Any time any where Can see reviews Access to online support Prices may be lower online as businesses do not pay expensive high-street rent
56
Why is social media good for a business
Provides a quick way to communicate with large numbers of customers Helps raise awareness of business Easy way to monitor satisfaction and collect feedback Promotes customer engagement

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