Unit 3 - Operations Flashcards
(40 cards)
Factors to consider when choosing a supplier
-Cost of raw materials
-Quality
-Quantity
-Location
-Delivery time/lead time
-Storage space available
-Reputation
What are risks of overstocking?
-High storage costs
-Products left unsold may be spoiled/stolen
-Money is tied up
What are risks of under stocking?
-Have nothing to sell
-Customers go elsewhere
-Loss in profits
-Poor reputation
-Increased admin costs
What is the maximum stock level?
The level that ensures that there will always be stock available without going over the storage space
What is the minimum stock level?
The level that stock must not fall below as shortages in raw materials may result in reduced output
What is the reorder level?
The level at which new stock should be ordered, usually worked out on the amount used per day plus the lead time
What is the buffer stock?
Extra stock kept on hand in case of manufacturing delays or an unexpected increase in demand
What is job production?
One-off product, custom-made to
a customer’s own specification.
What are advantages and disadvantages of job production?
Advantages - Firms can produce
one-off orders to exact specifications, Workers are likely to be highly skilled and motivated.
Disadvantages -Small contracts and long gaps between work, Staff wages will be higher to reflect skill level.
What is batch production?
Production of groups of similar
products. Changes can be made
between batches (such as
flavours, sizes, colours etc.)
What are advantages and disadvantages of batch production?
Advantages - Batches can suit
individual customer specifications, Reduced need for highly skilled staff.
Disadvantages -Machines and staff may
stand idle between batches, Staff may be less motivated due to repetitive nature of the task.
What is flow production?
Items move continuously from one
operation to the next. Products are
made on assembly lines and are
usually identical.
What are advantages and disadvantages of flow production?
Advantages - Costs are spread over a
large number of goods (economies of scale), Automation reduces human error and increases production rate
Disadvantages -Huge investment costs in technology are required, Equipment may be inflexible and limited to one particular role
What are advantages of using technology in operations?
-Increased output
-Increased productivity
-Competitive edge
Why is producing a quality product important
It reduces waste, creates a good reputation and encourages repeat custom.
How can the production process be high quality?
Quality raw materials, quality manufacturing and equipment and quality staff training and customer service.
What are benefits of using quality raw materials?
-Offers best opportunity of a good quality final product
-Using reputable suppliers can be used as a marketing tool
What are costs of using quality raw materials?
-May be more expensive
-Supplier has to be reliable
What are benefits of quality control?
-Reduces chance of poor quality products reaching end users
-Only some employees need to be trained as inspectors to look for faults
What are costs of quality control?
-Faults are only found at the end of production
-High wastage costs
-Reworking faulty products costs time and money
What are benefits of quality management?
-Aims to get it right the first time
-Zero tolerance on errors and mistakes
What are costs of quality management?
-More expensive to implement than quality control
-Everyone must ‘buy in’ to the process
What is quality management?
Departments work as teams, customers give feedback, quality improvement is shared.
What are benefits of quality training?
-Well trained workers will make less mistakes
-Fewer accidents likely
