2.3 Making Operational Decisions Flashcards
All 28 cards in this deck
What is the purpose of business operations?
To produce goods and/or to provide services for customers.
What is the difference between a good and a service?
A good is a physical, tangible product; a service is an intangible activity carried out for the customer.
e.g. a burger is a good, delivering it is a service.What is job production?
Producing one unique item at a time, made to the customer's individual requirements.
e.g. a wedding cake.What is batch production?
Producing a group of identical items together, with each batch finished before the next one starts.
e.g. a batch of white loaves, then a batch of brown.What is flow production?
Producing large quantities of identical, standardised products continuously on a production line.
e.g. cars or bottled drinks.What is the impact of using flow production on a business's productivity, costs and prices?
The line can be automated, so productivity rises and the unit cost of each item falls, allowing the business to charge competitive prices.
True or false? Flow production makes it easy for a business to produce different versions of its product for different customers.
False. Flow production is less flexible — a standardised product must be made, so it is hard to meet individual customer needs.
What four things must a business balance when introducing new technology into production?
Cost, productivity, quality and flexibility.
What is procurement?
The process of finding suppliers and buying the stock, raw materials and services a business needs.
What is the reorder level on a bar gate stock graph?
The stock level at which a new order for stock must be placed with the supplier.
What is lead time in stock control?
The time between placing an order with a supplier and the stock being delivered.
What are the steps to find the total stock delivered in a month from a bar gate stock graph?
e.g. deliveries of 500, 1,000 and 800 units are shown- Read the size of each delivery (each upward jump): 500, 1,000, 800
- Add the deliveries:
- State the total with units: 2,300 units
What is just in time (JIT) stock control?
Stock is delivered only as it is needed for production or sale, so little or no stock is held.
Which factors should a business consider in its relationships with suppliers?
Quality, delivery (cost, speed and reliability), availability, cost and trust.
What three things are affected by a business's logistics and supply decisions?
Costs, reputation and customer satisfaction.
Give one benefit to a business of having a good relationship with its suppliers.
It can negotiate cheaper prices, which reduces its variable costs.
(Also accepted: faster delivery, so it does not run out of stock.)What is meant by quality in business?
A product or service meeting customers' expectations and being fit for purpose.
What is quality control?
Inspecting and checking products at the end of the production process to find faults before they reach the customer.
What is quality assurance?
Checking quality at every stage of the process, with every worker responsible for ensuring the product is made correctly.
How does managing quality help a business control its costs?
Fewer faulty products means less waste, less reworking and fewer refunds, replacements or repairs.
How can good quality give a business a competitive advantage?
It builds a strong reputation and brand loyalty, so the business attracts more customers and may be able to charge a higher price.
What is meant by product knowledge in the sales process?
Staff knowing the products well enough to answer customers' questions and recommend the right product.
Why is speed and efficiency of service important in the sales process?
Customers are not kept waiting, so more can be served and they are more likely to return rather than go to a rival.
What is customer engagement in the sales process?
Interacting with customers and listening to their needs so they feel valued and build a relationship with the business.
Why should a business respond to customer feedback?
It shows customers they are valued and lets the business correct problems and improve its products or service.
What is post-sales service?
Support given to the customer after the purchase.
e.g. warranties, help lines, repairs, refunds and exchanges.Give two benefits to a business of providing good customer service.
Repeat purchases and customer loyalty, and a better reputation that brings in new customers and higher sales.
True or false? Customer service only matters up to the moment the customer pays.
False. Post-sales service, such as warranties and dealing with complaints, is also part of good customer service.