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Business studies > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

What are the operational objectives?

A
  • Cost
  • Quality
  • Speed of response and flexibility
  • Dependability
  • Environmental objectives
  • Added value
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2
Q

What are the internal influences on operational objectives?

A
  • Finance (budget)
  • People (skills of workforce)
  • Effective marketing ( important in service sector)
  • Capital ( Capital intensive will mean high initial costs)
  • Target market
  • Regulatory environment
  • Geographical
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3
Q

What are the external influences on operational objectives?

A
  • Benchmarking
  • Environmental targets
  • Innovation
  • PED and YED
  • Ethical factors
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4
Q

What is the formula for labour productivity?

A

total output / number of employees

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5
Q

What is labour productivity influence by?

A
  • Training and skills of the workforce
  • Motivation
  • Complexity of the product
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6
Q

What is the formula of unit cost?

A

Total cost / output

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7
Q

What is unit cost influenced by?

A
  • Number of units produced
  • Labour productivity
  • Suppliers
  • Material usage
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8
Q

What is capacity?

A

The maximum amount of output achievable

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9
Q

What is the capacity utilisation formula?

A

Actual output / maximum output x 100

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10
Q

What are the different ways of increasing efficiency

A
  • Increasing capacity utilisation
  • Increasing labour productivity
  • Lean production techniques
  • Choosing the optimal resource mix
  • Using technology
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11
Q

How to utilise capacity effectively?

A

Under utilisation:
- Increase demand.
- Downsize.
- Lease of spare capacity.

Over utilisation:
- Reduce demand (increase price).
- Outsource parts of the business’ operations.
- Increase capacity by investing more resources.

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12
Q

How can labour productivity be increased?

A
  • Training
  • Increasing motivation
  • Implement new technology
  • Better working practises
  • Improved recruitment and selection
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13
Q

What is the problems with increasing labour productivity?

A

May Impact negatively on quality and customer satisfaction:
- Damage to long term reputation
- Increase waste affecting unit cost

Employees may feel exploited:
- Working harder for same pay
- Business benefiting but not employees
- Increased workload.

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14
Q

What is lean production?

A

Techniques that focus on cutting waste

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15
Q

What are the types of lean production?

A
  • Just in time (minimise stock holdings)
  • Kaizen (concentrates on small but frequent improvements)
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16
Q

Pros of Just in time?

A
  • Less costs in holding stock.
  • Less working capital required
  • Less obsolete or ruined inventory
  • Lower associated costs
  • Avoids having unsold stock
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17
Q

Cons of Just in time?

A
  • Little room for error
  • Very reliant on suppliers
  • Unexpected orders harder to meet
  • Any delays in deliveries could cause production to halt
  • high initial set up costs
  • Complex systems have to be put in place and understood
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18
Q

What is a capital intensive workforce?

A

Uses machinery in goods and services.

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19
Q

What is labour intensive workforce?

A

Uses people in goods and services.

20
Q

Pros of capital intensive

A
  • Increased productivity
  • Improved quality and speed
  • Reduced labour costs
  • Greater opportunities for economies of scale.
21
Q

Cons of capital intensive?

A
  • High investment outlay
  • Lack of human initiative.
  • Greater resistance to change by workforce
22
Q

Pros of labour intensive?

A
  • Often cheaper when in low wage locations
  • Workforce can easily adapt to change
  • Continuous improvement in workforce can benefit the firm
  • Government funding available to protect jobs.
23
Q

Cons of labour intensive?

A
  • Industrial relations can be a problem
  • Lack of skilled workers in some industries
  • HRM costs can be high e.g. recruitment, selection and training.
24
Q

How can technology be used in increasing efficiency?

A
  • Robotics
  • Automation
  • Communication
  • Design technology
25
Q

What factors can affect interpretation of quality?

A
  • Price
  • Brand
  • Customer’s personal expectations and experiences
  • Nature of product or service.
26
Q

Why is quality important?

A
  • Less waste
  • PR
  • USP
  • Pricing decisions
  • Improved competitiveness
27
Q

Methods of improving quality?

A
  • Training and motivating employees
  • Understanding customers’ expectations
  • Using tech
  • Working with suppliers
  • Quality systems
28
Q

What is quality control?

A

The checking of a good and service at the end of the process.

29
Q

Pros of quality control?

A
  • Quality can be monitored
  • Stops faulty products reaching the customer
  • Common problems can be identified
  • Inspector takes responsibility
  • Often robust system
30
Q

Cons of quality control?

A
  • Takes responsibility away from operatives
  • Requires specialist to check
  • Problems only identified at end.
  • Waste levels may be high.
31
Q

What is quality assurance?

A

The checking of a product or service at each stage of production.
Total quality management (TQM)

32
Q

Pros of quality assurance?

A
  • Spots faults early saving resources being wasted at next stages
  • Motivates workers
  • Ensures clear systems are in place
  • Enhances the reputation of the business as less chance of faulty goods reaching at the end customers
33
Q

Cons of quality assurance

A
  • Requires staff training and high levels of staff commitment
  • Can slow down the production process and labour
  • May demotivate workers under pressure
  • Opportunity cost of managers time when implementing systems.
34
Q

What is Total Quality Management?

A

Sees quality as the responsibility of all employees.

35
Q

Pros of TQM?

A
  • Achieve operational objectives
  • Gain a competitive advantage
  • Reduce unit costs
  • Better PR
  • Motivated workforce working towards a common goal.
36
Q

Cons of TQM?

A
  • Reluctance of employees to adapt
  • Requires finance to invest in training, test and implement new systems
  • Reliant on good relationship with suppliers
  • Once made must be monitored and reviewed to ensure standards are meet.
37
Q

What is flexibility in supply chain?

A
  • To meet a sudden increase or decrease in demand
  • Change an aspect of the product to meet changing consumer tastes
  • Respond to erratic demand.
38
Q

To be flexible what does a business need suppliers to be?

A
  • Fast
  • Dependable
39
Q

How can demand be met?

A
  • Outsourcing can be used to be able to match a sudden demand in the business.
  • Using temporary and part time employees.
40
Q

Pros of outsourcing?

A
  • Provides flexibility
  • Can increase capacity without high capital expenditure
  • Can buy in expertise
41
Q

Cons of outsourcing?

A
  • Quality must be maintained
  • Sub-contractor will also want to be making a profit
42
Q

Pros of temporary and part time workers

A
  • Flexible workforce
  • Better able to match supply to demand
  • Not tied into paying workers when they are not being used to their full potential
43
Q

Cons of temporary and part time workers

A
  • Recruitment and training costs may be high and not seen as value for money when employees are only with the business for a short period of time
  • May be more transient
  • May lack commitment
44
Q

Influences on the amount of stock held?

A

(Useful on questions where a business may go JIT)
- The business’ attitude to risk
- The importance of speed of response as an operational objective
- Speed of change within the market
- Nature of the product e.g. perishable or long lasting

45
Q

Pros of buffer stock?

A
  • Can meet customer demand
  • Quickly respond to increases in demand
  • Continue with production even if a problem with stock deliveries
46
Q

Cons of buffer stock

A

Money tied up in holding stock
Costs associated with stock holding e.g. storage, staff, insurance
Risk of waste e.g. out of date, damaged or obsolete

Business studies (11 decks)

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