Y12 Models 4/4 Flashcards
(47 cards)
What is a functional organisational structure and what are its advantages?
Groups employees by specialised departments (e.g. marketing, HR, finance). Promotes expertise and efficiency within each function. Clear career paths and focused training.
What are drawbacks of a functional structure?
Communication between departments may be poor (“silo effect”). Decisions are often centralised, slowing responsiveness and innovation across the organisation.
What is a product-based organisational structure and when is it used?
Groups staff around specific product lines. Each unit operates like a mini-business, often decentralised. Improves customer responsiveness and product focus.
Evaluate the product-based structure.
✅ Responsive, product accountability
❌ Duplication of roles (e.g., multiple marketing teams), and potential resource inefficiencies
What is a regional organisational structure and what are its benefits?
Divides operations by geographic areas. Enhances understanding of local markets, customs, and consumer behaviour — improving responsiveness and customer relationships.
What is a matrix organisational structure and how does it work?
Employees report to multiple managers (e.g., functional + project lead). Encourages collaboration, resource sharing, and flexible problem-solving across departments.
Evaluate the matrix structure in practice.
✅ Promotes innovation and cross-functional teamwork
❌ Dual reporting lines can cause confusion, conflict, and stress — requires strong coordination and leadership.
Q: What is meant by labour-intensive and capital-intensive production?
Labour-intensive: Production relies heavily on human labour (e.g. hotels, restaurants, luxury goods), typically where tasks require skill, flexibility, or personal service.
Capital-intensive: Relies more on machinery, equipment, and tech (e.g. car manufacturing, oil refining), used where automation can reduce unit cost and increase efficiency.
What are the key features and cost structures of labour- vs capital-intensive operations?
Labour-intensive:
Variable costs dominate → lower breakeven output
Flexible workforce enables customisation
Often used in service sectors or where differentiation is key
Capital-intensive:
High fixed costs → higher breakeven
Low unit costs via economies of scale
Common in standardised mass production
When is labour-intensive vs capital-intensive production more appropriate?
Depends on:
Nature of the product: handmade/luxury = labour; standardised/high volume = capital
Cost strategy: differentiation = labour; cost leadership = capital
Financial resources: capital-intensive requires upfront investment
Market flexibility: labour offers adaptability; capital offers efficiency
What is quality assurance and how does it operate in production?
QA is a proactive, process-focused approach where workers or systems self-check quality at each stage. It aims to prevent faults (“zero defects”) and embed quality into the culture — promoting accountability and consistency.
What are the advantages and limitations of quality assurance?
✅ Improves motivation (Herzberg — recognition/autonomy)
✅ Reduces waste and rework
✅ Promotes consistent brand reputation
❌ Requires extensive training and staff buy-in
❌ Poor implementation = consistent but low standards
What is quality control and how does it work?
QC is a reactive method that inspects products (sample or all) at the end of production. It isolates defects before goods reach customers but doesn’t prevent errors earlier in the process.
What are strengths and weaknesses of quality control?
✅ Doesn’t rely on all staff being trained
✅ Can ensure no poor-quality goods reach consumers
❌ High wastage and rework costs
❌ Other staff may be disengaged from quality responsibility
When is QA better than QC, and when is QC more effective?
QA = best in complex, multi-stage production (e.g. car manufacturing)
QC = better when products are uniform/simple (e.g. refining oil)
Best systems combine both — e.g. BMW use QA for prevention + QC for final safety checks
What is lean production and what are its aims?
Lean production is a management philosophy aiming to eliminate waste, maximise efficiency, and ensure consistent quality. It cuts unnecessary activities (e.g. excess inventory, delays) to reduce cost and improve responsiveness.
What are 8 types of waste identifiable in lean production?
Defects
Overproduction
Waiting
Non-utilised talent
Transportation
Inventory
Motion
Extra-processing
What is Just-In-Time (JIT) and how does it reflect lean principles?
JIT means inventory is only ordered/produced when needed.
✅ Low stockholding reduces storage cost and waste
✅ Improves cash flow
❌ Highly dependent on supplier reliability
❌ No buffer if demand surges or deliveries are late
What are Right First Time and Kaizen in lean production?
Right First Time: Aims to prevent defects through ownership and quality culture (linked to QA)
Kaizen: Continuous, incremental improvement by employees — improves quality, cuts costs, and increases engagement
What is mass customisation and why is it considered lean?
Mass customisation combines the cost-efficiency of mass production with individual customisation.
✅ Prevents overproduction, improves satisfaction
❌ Requires advanced systems and flexible operations to implement
What do inventory control charts show and what are key terms?
They track stock over time to manage replenishment.
Key terms:
Reorder level = trigger point for restocking
Order quantity = amount restocked
Lead time = delay between order and delivery
Buffer stock = safety margin
How do you calculate reorder level and what affects it?
Reorder level = (Lead time × average daily usage) + buffer stock
If lead time or usage rates change, businesses must adjust to avoid stockouts or overstocking — especially in JIT systems with near-zero buffer.
Evaluate inventory control systems using control charts.
✅ Optimise stock, reduce storage costs, and automate reordering
❌ Require accurate, real-time data (barcodes, software)
❌ Human error or delayed data input can cause understocking or overstocking
