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A-Level Business > unit 4 > Flashcards

unit 4 Flashcards

1
Q

what is operations management

A

the management of processes, activities and decisions relating to the way goods and services are produced and delivered

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2
Q

whats the transformation process

A

what happens inside the business and where value is added

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3
Q

what are the key types of operational objectives

A

cost and volume
quality
efficiency and flexibility
environmental

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4
Q

how to fund out unit cost

A

total costs divided by total units

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5
Q

examples of cost and volume objectives

A

productivity and efficiency
unit cost perm item
contribution per unit
number of items to produce

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6
Q

possible quality objectives

A

zero/defect rates : a measure of poor quality
reliability
customer satisfaction
number/incidence of customers complaints
customer loyalty
percentage of on time delivery

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7
Q

examples of efficiency and flexibility objectives

A
  • labour productivity
  • output per time period
  • capacity utilisation
  • order lead times
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8
Q

whats the importance of innovation

A

innovation is about putting a new idea or approach into action. innovation is commonly described as ‘the commercially successful exploitation of ideas’

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9
Q

whats an invention

A

formulation of new ideas for products or processes

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10
Q

whats an innovation

A

practacial application of new inventions into marketable products or services

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11
Q

what are the two types of innovation

A

product and process

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12
Q

whats product innovation

A

launching new or improved products(or services) on to the market

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13
Q

whats process innovation

A

finding better or more efficient ways of producing existing products, or delivering existing services

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14
Q

what are the benefits of product innovation

A

first move advantage
higher prices and profit
opportunity to build trust
increased market share

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15
Q

benefits of process innovation

A

reduced costs
improved quality
more responsive customer service
greater flexibility
higher profits

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16
Q

internal influences on operational objectives

A

corporate objectives
finance
HR
marketing issues

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17
Q

what are corporate objectives

A

with all the functional areas, corporate objectives are the most important internal influences and should not conflict.

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18
Q

what does finance mean in operational objectives

A

the financial position of the business

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19
Q

what does HR mean in operational objectives

A

the quality and capacity of the workforce is a key factor in affecting operational objectives.

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20
Q

what does marketing issues mean in operational objectives

A

the nature of the product determines the operational set up. regular changes to the marketing mix - particularly product - may place stains on operations, particularly if production is relatively inflexible.

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21
Q

whats PESTLE

A

Political
Economic
Social
Technological
Legal
Environmental

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22
Q

unit costs formula

A

total output in period (units)

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23
Q

why do economics of scale rise

A

Economics of scale arise when unit costs fall as output increases

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24
Q

what are internal economics of scale

A

purchasing economics
technical
marketing
network
finaical
managerial

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25
Q

purchasing economics (economics of scale)

A

buying in greater quantities usually results in a lower price (bulk buying)

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26
Q

technical (economics of scale)

A

use of specialist equipment or processes to boost productivity

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27
Q

marketing (economics of scale)

A

spreading a fixed marketing spend over a larger range of products, markets and customers

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28
Q

network (economics of scale)

A

adding extra customers or users to a network that is already established

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29
Q

financial (economics of scale)

A

larger firms benefit from access to more and cheaper finance

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30
Q

managerial (economics of scale)

A

can hire specialists workers

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31
Q

why does diseconomies of scale happen

A
  • coordination problems
  • communication problems
  • alienation and demotivation of staff
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32
Q

what does labour intensive mean

A

production relies on using labour resources

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33
Q

what does capital intensive mean

A

production relies on using capital rescues

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34
Q

examples of labour intensive industries

A

food processing
fruit farming
hairdressing

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35
Q

examples of capital intensive industries

A

web hosting
car manufacturing
oil extraction and refining

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36
Q

capacity

A

the capacity of a business is a measure of how much output it can achieve in a given period

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37
Q

examples of capacity

A
  • a fast food outlet may be able to serve 1000 customers per hour
  • a football stadium could seat no more than 45,000 fans at a match
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38
Q

capacity utilisation

A

the proportion (percentage) of a business capacity that is actually being used over a specific period

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39
Q

capacity utilisation formula

A

actual level of output
————————————X100
potential possible output

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40
Q

Why would most business operate below capacity

A

Lower than expected market demand (change in customer taste)

a loss of market share (competitors gain customers)

seasonal variations in capacity (weather changes lead to lower demand)

maintenance and repair program (capacity is temporarily unavailable)

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41
Q

dangers of operating at low capacity utilisation

A

high unit costs - impact on competitiveness

less likely to reach break even output

capital tied up in under utilised assets

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42
Q

problems with working at high capacity

A

negative effect on quality possibly (production is rushed, less time for quality control)

employees suffer (added workloads and stress, demotivating if sustained for to long)

loss of sales (less able to meet sudden or unexpected increases in demand)

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43
Q

what is labour productivity

A

the output per employee

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44
Q

formula of labour productivity

A

number of employees

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45
Q

why is it important

A
  • labour is a significant cost of production
  • improve in labour productivity will help to reduce unit costs
  • may be a crucial source of competitive advantage where products are standardised - allowing lower prices
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46
Q

whats quality

A

a product or service is of a good quality if it meets the needs and expectations of the customer

47
Q

some measures of quality

A

reliability
functions and features
support levels and standards
cost of ownership
brand image
exclusiveness
market reputation

48
Q

business benefits of greater quality

A

customer satisfaction
repeat purchase
customer recommendation
lowering market costs
higher customer loyalty
customer satisfaction

49
Q

why is quality so important in business

A
  • markets are highly competitive
  • if a business can develop a reputation for high quality then it may be able to create an advantage over its competitors
50
Q

examples of poor quality

A
  • product fails
  • product dies not perform as promised
  • product is delivered late
  • poor instructions/directions for use
  • unresponsive customer service
51
Q

what are the costs of poor quality to a business?

A
  • lost of customers
  • cost of reworking or remaking product
  • costs of replacement or refunds
  • wasted materials
52
Q

methods of improving quality

A
  • training and motivating employees
  • understanding customers expectations
  • using technology
  • working closely with suppliers
  • quality control
  • quality assurance
53
Q

advantages off quality control

A
  • quality can be monitored
  • stops faulty products reaching the customers
  • common problems can be identified
  • inspector takes responsibility
54
Q

disadvantages of quality control

A
  • takes responsibility away from operatives
  • requires specialist/additional personal
  • problems only identified at end of process
  • waste levels may be high
55
Q

what is quality control

A

a system of maintaining standards in manufactured products by testing a sample of the output against the specification.

56
Q

whats quality assurance

A

the checking of a product or service at each stage of its production

57
Q

advantages of quality assurance

A
  • spot any faults early saving resources being wasted at the next stage of the production process
  • motivates workers who are responsible for ensuring quality standards are met.
  • aims to achieve an objective of 0 defects
  • enhances the reputation of the business as less chance of faulty goods reaching the end customer
58
Q

disadvantages of quality assurance

A
  • requires staff training and high levels of staff commitment
  • can slow down the production process and labour productivity leading to higher unit costs
  • may determine workers who fell under pressure
59
Q

what is a supplier

A

a business or individual that provides goods and services to another business

60
Q

whats a supply chain

A

a network between a company and its suppliers to produce and distribute a specific product

61
Q

why are suppliers important

A
  • suppliers determine many of the costs of a business
  • suppliers are closely linked to a product quality
  • suppliers can be an important source of finance to a business
  • for business that use lean production techniques, effective relationship with key suppliers are essential
62
Q

what characteristics would make an effective supplier

A
  • good value for money
  • good quality
  • are they reliable
  • good communication
  • are they financially secure
  • can they handle your capacity
63
Q

how can suppliers influence performance

A
  • lower purchase costs, better prices from a supplier lower the costs of a business
  • better quality
  • improved customer quality
  • increased productivity
    more flexible capacity
64
Q

whats trade credit

A

where a business buys goods and services from a supplier and pays for them later (eg 60 days)

65
Q

whats is inventory

A

inventories are the raw materials, work in progress and finished goods held by a firm to enable production and meet customer demand

66
Q

what are the three main types of inventory

A

raw materials and components
work in progress
finished goods

67
Q

what are raw materials and components inventory

A

brought from suppliers
used in production process
eg parts for assembly or ingredients

68
Q

what is work in progress inventory

A

semi or part finished production
eg construction projects

69
Q

what are finished goods

A

completed products ready for sale or distribution
eg products on supermarket shelves

70
Q

key reasons to hold inventory

A
  • enable production to take place
  • satisfy customer demand
  • precaution against delays from suppliers
  • allow efficient production
  • allow for seasonal change
71
Q

main influences on amount of inventory held

A
  • need to satisfy demand
  • need to manage working capital
  • risk of inventory losing value
72
Q

what are the costs of holding inventories

A
  • cost of storage
  • interest costs
  • obsolescence risk
  • stock out costs
73
Q

why use inventory control charts

A

the overall objective of inventory control is to maintain inventory levels to that the total costs of holding inventories is minimised

74
Q

factors affecting when/how much inventory to re order

A
  • lead time from the supplier
  • implications of running out
    demand for the product
75
Q

whats inventory control and just in time production

A
  • concept of just in time(JIT)
76
Q

whats over production (type of waste)

A

making more than is needed - leads to access stocks

77
Q

whats wasting time (type of waste)

A

equipment and people standing idle waiting for a production process to be completed or resources to arrive

78
Q

whats transport (type of waste)

A

moving resources (people, materials) around unnecessary

79
Q

whats stocks (type of waste)

A

often held as an acceptable buffer, but should not be excessive

80
Q

whats motion (type of waste)

A

a worker who appears busy but is not actually adding any value

81
Q

whats defects

A

output that does not reach the required quality standard - often a significant cost to an uncompetitive business

82
Q

types of lean production

A
  • time based management
  • simultaneous engineering
  • just in time production (JIT)
  • cell production
83
Q

whats time based management

A

time based management is a general approach that recognises the importance of time and seeks to reduce the level of wasted time in production processes

84
Q

whats simultaneous engineering

A

simultaneous engineering is a project management approach that helps business develop and launch new products more quickly.

85
Q

whats cell production

A

cell production is a form of team working where production processes are split into cells. each cell is responsible for a complete unit of work which they then pass onto the next stage creating internal customers and suppliers.

86
Q

whats just in time

A

JIT aims to ensure that inputs into production process only arrive when they are needed. implemented successfully, stock levels of raw materials, components, work in progress and finished can be kept to a minimum

87
Q

lean production

A

organising production and operations to minimise waste

88
Q

cell production

A

a form of team working that helps ensure worker commitment, as each cell is responsible for a complete unit of work

89
Q

JIT (just in time)

A

a manufacturing system in which materials or components are delivered immediately before they are required in production

90
Q

rewards for land

A

rent

91
Q

rewards for labour

A

wages

92
Q

rewards for capital

A

interest

93
Q

rewards for enterprise

A

profit

94
Q

what is capital intensive

A

uses a relatively high proportion of capital such as machinery in the production of a good or service

95
Q

whats labour intensive

A

uses a relatively high proportion of labour ie workers in the production of a good or service

96
Q

advantages of capital intensive

A
  • increased productivity
  • improved quality and speed
  • reduced labour costs
  • greater opportunities for economies of scale
97
Q

disadvantages of capital intensive

A
  • high investment outlay
  • lack of human initiative
  • greater resistance to change by workforce
98
Q

advantages of labour intensive

A
  • often cheaper, especially when produced in low wage locations
  • workforce can easily adapt to change, especially if multi skilled
  • continuous improvement through workforce can benefit the firm
99
Q

disadvantages of labour intensive

A
  • industrial relations can be a problem
  • lack of skilled workers in some industries
  • HRM costs can be very high
100
Q

advantages of robotics

A

accuracy
consistency
speed
resilience
hazardous environments

101
Q

disadvantages of robotics

A

initial costs and maintenance costs
loss of human touch
lack of initiative

102
Q

what is automation

A

the use of machines to control a process eg stock control, production line, warehousing and distribution

103
Q

types of internal communication

A
  • interdepartmental
  • order processing
  • quality data
104
Q

types of external communication

A
  • working with suppliers
  • sourcing supplies
  • tracking of supply chain
105
Q

whats design tech

A

the use of computers in the design stage of developing a product

106
Q

whats CAD and why’s it used

A
  • computer aided design
  • used in many pros including architecture
  • as well as new product development
  • car manufacturing
  • tea pots
107
Q

why’s design tech good

A
  • 3d simulations allow for greater degrees of manipulation prior to investment in prototypes
  • designs can easily be altered to provide a range of options
  • designs can be tested in changing conditions eg wind tunnels
108
Q

whats outsourcing

A

the practice of using the services of other organisations to complete all or parts of the manufacturing process

109
Q

value of outsourcing

A
  • provides flexibility in supply
  • can increase capacity without high capital expenditure
  • can buy in expertise
110
Q

benefits 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
111
Q

problems of temporary/part time workers

A
  • may lack commitment
  • 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
112
Q

what will the amount of stock depend on

A
  • the business attitude to risk
  • the importance of speed of response as an operational objective
  • speed of change within the market
  • nature of a product
113
Q

whats is mass customisation

A

is the ability to tailor goods made in bulk to meet requirements of individual consumers

A-Level Business (15 decks)

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