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Business Studies- flashcards
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- 1Strategic Role of Operations Management Outline some of the roles of operations management- Implement strategies
- Decision making
- Transform inputs into outputs
- Plan > Schedule > Control: achieve goals
- Effectively manage resources to achieve goals
e.g. Kmart- new product lines, training, longer opening hours- cost adv. - 2What syllabus sub points come under "Strategic Role of Operations Management?" Also give some detail on each.- Cost Leadership:
• Having lowest costs, while being price competitive
•Lower costs through: inputs, labour, processes, inventory, quality management
• Economies of scale; cost adv., lower input costs- negotiation with supplier, bulk purchasing
• Reduce costs, price competition, set lower prices (standardised)
• Apple: Lowest cost producer, able to sell at higher, success and sustainability
- Goods/Service Differentiation
• For goods: Features vary (basic option + added- Kelloggs), Varying quality (madza 2 & 6), augmented (add ons- gps, iPod connectivity in a car)
• For a service: Vary time spent, vary expertise, vary qualifications (gp v.s specialised), vary quality of materials/technologies used
Use when: quality=competitiveness, sell expensive products, have comp. adv.
E.g Apple- Ipod extra features, innovative design. Time, expertise, qualifications- customer loyalty, brand loyalty - 3What are the type of products are there? (4 combining types)- give examples•Tangible- things that can be touched e.g. Laptop, phone
• Intangible- can't be touched and provide more of a service e.g. customer service, warranties
• Customisation- suiting products to specific customer needs. e.g. Hairdresser, car colours, nike
• Standardised- mass produced, uniform quality e.g Apple iPod, Lego
• Perishable- spoils, and needs sufficient packaging- may need to be refrigerated e.g food
• Non Perishable- lasts for a long time and doesn't spoil e.g. furniture
•Intermediate- produce a product to then become an input for the FINAL GOOD - 4Goods/Services in different industries What are the 3 types of industries goods/services appear in and give detail• Tertiary- provide more of a service, customer service, speed of service, customisation and training
• Primary- using natural resources e.g. mining, fishing, farming
• Secondary: Retail bus.
- Reduce faults, efficient, decrease waste, increase production quality, increase production speed. - 5Identify all the influences on Operations Management• Globalisation
• Technology
• Cost based competition
• Quality Expectations
•Government Policies
• Legal regulations
• Environmental sustainability
• Corporate social responsibility
- difference between legal compliance and ethical responsibility
- Environmental sustainability and social responsibility - 6How does globalisation impact on a business?- Globalisation= the removal of barriers between nations allowing worldwide trade (due to decline in transportation and communication costs)
- Shipping is cheaper
- Materials/resources overseas cheaper
- Labour cheaper: outsourcing
- Containers cheaper
- Finance: global and easier to borrow
- Deregulations- led to more economies being open to globalisation and trade - 7Outline how technology could impact on a bus.Technology= knowledge of how things are done
- If a bus. responds to changing and leading edge technology- may help to bring competitiveness
- Fail to keep up with technology= loss of competitiveness e.g. nokia
- Makes it more efficient
- Can include hardware and software - 8Describe how you can achieve quality in products (goods and services)- Goods:
• quality of design: how well is it designed, materials used, innovative
• Fitness of purpose: validity, easy to use
• Durability: long lasting, can be fixed easily
Services:
• Professionalism
• Reliability- level of competence
• Customisation- needs met - 9In relation to Quality Expectations, what does lean production and Total quality management refer to? Give examples of Quality expectationsLean production= producing goods at a low cost, but still ensuring product design meets specifications
Total Quality Management= ensuring that there is quality every time, reducing the amount of faults
e.g. kmart- customers expect low prices, value for money, customer service
Qantas- when engine exploded, company expected supplier would supply engine that met specifications- did not - 10Outline cost-based competition and give a relevant exampleCost based competition= lowering costs in order to reduce prices giving competitive edge
- minimise warehouses, bulk purchasing, transport e.g. Woolworths and Coles
Kmart- lowers costs by being open 24 hours- most bus. leave lights on at night costing money. Kmart makes money at the same time, so overhead costs are spread - 11Explain how government policies have an effect on a business- effect outputs: "sin products" such as tobacco and alcohol have high tax, restrictions, regulations, tariffs (imports/exports)
- encouragement of environmentally friendly approach - spent $6.2B to assist car manufactures
- effect inputs: subsidies (gov. gives money to bus.), tax breaks (certain products- sustainable energy- more likely to use), grants - 12Describe the four legal regulations that can influence a businesses practices. *In one of them you will need to give specific examples of regulations*• Work Health and Safety: ensures safety, safe training (protective equipment, noise regulations), no pollution
• Environmental Protection: minimise pollution, eliminating waste (dispose safely)- Environmental Protection and Biodiversity Conservation Act 1999
•Fair Work and Discrimination Laws Cth
Employees treated with dignity and respect, racial discrimination act 1975, sex discrimination act 1984, Age discrimination act 2004, Fair work 2009, Anti discrimination act 1977
• Training and development: correct use of technology, appropriate training methods - 13Environmental Sustainability needs to be considered as a business. Identify ways in which it influences on a business and/or the things that need to be considered- operations: impacts air, water, waste
- need to reduce impact
- reduce carbon emissions
- customers consider this when buying a product - 14Describe each dot point under "corporate social responsibility" CSR= doing more than just complying with the law, rather having a respect for the community, environment and customers. Having open, and accountable bus. actions- Difference between legal compliance and ethical responsibility
LEGAL COMPLIANCE: complying the regulations and policies put in place for the business (which are mandatory and forced> high cost to business- labour costs, environmental laws, licensing, taxation, trademark/copyright, human rights
Outsourcing- laws different overseas- prices lower, labour and tax lower, not always ethical though
ETHICAL RESPONSIBILITY: Doing what is morally and ethically correct
How to ensure: consultants, international Labour Standards, international bodies - 15What is social responsibilityActing in a way that benefits the wider community, and helps to provide their needs and wants. You are still acting ethically if you are SR, but may do things to help the community- e.g. sponsoring, donating
- 16How can a bus. ensure they are environmentally sustainable- look at the effect on the environment and minimise activity that causes most damage
- Sustainable resources- less packaging and recyclable - 17Provide some case studies for the influences on operations.Ford- globalisation: plants/assembly lines around the world
Ikea- cost-based competition, globalisation
BMW- technology- robotics, quality expectations, social responsibility
Casella Wines- environmental sustainable/ethical- water saving, energy saving - 18Describe and give examples for transformed inputsTransformed= the inputs that are changed and converted in the production process- "seen" in the final product
EXAMPLES
• Customers= shape inputs due to choices- needs and wants considered
Customer relationship programs- systems (maintain customer contact), customer service, identify trends and changes in taste. NOT PRESENT IN FINAL GOOD- but.... knowledge and choices from them is.
• Information= knowledge gained from research and instruction (how to produce good, training, requirements of goods- manuals)- greater understanding- determines how inputs are used
Internal- KPI's, finance reports
External- market research, reports, Gov states
• Materials (RAW- unprocessed state- come from mines, farms, etc. INTERMEDIATE- manufactured already but are used for further use) - 19Describe transforming inputs and give examplesTransforming= carry out functions and production of a product- not evident in final product though
Human Resources= the labour involved in creating the product. Must be qualified, trained, experienced, reliable and have performance objectives
SKILLS NEEDED TO CREATE PRODUCT
Facilities= the plant or process layout (factory, office, machinery needed)
- efficient design, good location, capacity, energy/water requirements, plant and process layout - 20What is value adding in the operations process?When a product is produced time and money is invested into the product. When the product becomes an output there is value added due to the different variables such as cost of inputs, expertise, time, energy, etc.
e.g. Apple pie is priced higher than what it cost to make, due to having value added. - 21What are the 4 V's in the transformation process?• Variation in demand
• Variety
• Volume
• Visibility (customer contact) - 22Define volume refers to in the transformation process and explain how lead time can be affected.Volume= the amount of products produced
Lead time= the length of time it takes for an ordered product to reach the customer
If there is a lack of production, and back orders cannot be fulfilled quickly there is a loss of sales
Slow production > overproduce > wastage and storage costs - 23Outline variety in the transformation process and give an exampleVariety+ mix of products and services available through the transformation process
greater variety= customisation- operations needs to allow for more variation
e.g. Apple-- ipod, iphone, macbook pro/air, itunes, iTunes you, app store, apple tv - 24Explain variations in demandVariation in demand= when there is a change in demand, there is a change in volume
Increase in demand:
• increased supply needed
• more HR needed
• increased energy use
• increase technology
• need to predict changes
Types of changes in demand:
• Seasonal: may need to contract staff (christmas, easter, winter, summer- pool gear, aircon)
• Constant: stays the same- bulk orders, full time staff e.g. food, entertainment
• Unpredictable: casual staff, material orders frequent e.g. wet summer - 25Describe visibility (customer contact)Visibility= customers influence what bus. produces
Direct contact- surveys, interviews, verbal feedback, warrantee claims, emails
Indirect- sale data, reviews, market share data, observing customer decision making processes - 26Discuss Mass, Batch and Cellular productionMass= there is high volume production- low variety. i.e. standardisation e.g. Mcdonalds, Toyota corolla
positives: materials are bulk purchased (cheaper), no need to keep switching machines
negatives: not as much variety and customisation
Batch= there is some customisation of products e.g. Sushi train, corolla with spoilers and GPS
positives: can satisfy customer needs more readily, some bulk materials
negatives: switching machines takes time
Cellular= complete customisation of a product, little volume e.g. level 41 restaurant, corolla with leather seats, different design, paint job
positives- meet customer needs and wants
negatives- time consuming, expensive - 27Define sequencing and scheduling and what is included in it.Sequencing= the order in which tasks will be completed
Scheduling= the length of time it takes
Included in sequencing and scheduling:
• What needs to occur
• How long
• What production activities ?
• Activities that can occur at the same time
• Resources used - 28Discuss the purpose of a Gnatt chart• Bar chart
• Number of tasks involved/what tasks need to be performed
• Order
• How long it will take
Positives; set dates for completion, compare actual completion with planned, roster staff
Negatives; doesn't show what tasks can be completed together or the relationship between tasks (may need one to complete the other) - 29Explain the purpose of a critical path analysisCPA= the shortest length of time needed to complete ALL tasks
Includes;
• What needs to be done
• Time it takes to complete
• Order
Allows the manager to see the path critical to complete tasks
• see what tasks are completed together- organisation - 30Explain the features of TECHNOLOGY in the operations processTechnology- efficiency, lowered costs, machinery/information systems, increases competitiveness e.g. printers, wifi, software, email
• Can buy or lease- cheaper, tax deductible, competitive
Robotics- engineering, assembly line, several tasks- programable
CAM- control manufacturing (computer controlled)
CAD- product possibilities before actually produced- 3D diagrams from input data, visualisation of what is to be produced, see material usage
e.g. Treated Timber Store- design and plan dining table. Able to meet exact needs of customers- CAD > Show customers > changes > pricing > CAM > output
Limitations- expensive as changes constantly made, upgrade of technology needed, training of staff - 31Describe task design in the operations process....Task design= the tasks that need to be completed
Employers must classify tasks in a way that is easy for employees to complete tasks
Task design > job description > recruitment - skill specification > selection - 32Describe the types of process layoutProcess Layout= machines or equipment are arranged in groups of their function e.g. hospital- maternity, burns, emergency
Process production= high variety, low volume e.g. accounting
Product Production= high volume/mass production e.g. assembly lines
Product Layout= equipment arranged in order of tasks e.g. tacos- each ingredient
Fixed position layout- located at site- bulky activities e.g. building of ship
Work stations- arrangement of desk areas e.g. doctors clinic
Plant Layout= arrangement of staff, and equipment e.g. office/factory - 33Describe monitoring, controlling and improvement in the transformation process.Monitoring= looking at planned performance vs. actual performance- KPI's indicate this. Determine how each area is going e.g. defect rates, turnover rates, warrantee claims
Controlling= comparing intended vs. actual BUT implementing strategies to rectify issues- must control T.P - reasonable targets, regular perf. review, corrective action taken
Improvement= systematic reduction in inefficiencies, elimate bottlenecks (slowed down production due to so many tasks needing to be done)
Kaizen-- continuous improvement
Improvement areas:
• Time spent on production
• Quality
• Costs
• Efficiency
• Flexibility - 34Describe the two main elements of outputs (according to the syllabus)- CUSTOMER SERVICE: must meet and exceed expectations- right good/service provided at the right place at the right time
• Handle returns
• Answering q's.
• Communication
• Anticipate needs
• Follow up complaints
• Technology service
e.g. Apple- information, warrantees, anticipate needs
e.g. Mcdonalds- the customer is always right
✓ C.S = more sales, customers keep returning
STATS: 1 dissatisfied customer tells 11 people, who then tell another 5.
- WARRANTIES: Promise made by a bus. to correct any defects
If there are many claims- problem in operations process, decrease customer loyalty BUT... if there is easy return- higher customer loyalty.
Australian law: must have level of quality same as product description, does what is supposed to do, match ad descriptions, no defects
Rectifying costs money though (fix/replace, find issues, change/improve factory, retraining) - 35List all the operations strategies...(9)✓ Performance Objectives
✓ New product/service design and development
✓ Supply chain management
✓ Outsourcing
✓ Technology
✓ Inventory management
✓ Quality Management
✓ Overcoming resistance to change
✓ Global Factors - 36Identify the performance objectives in operations management.✓ Dependability
✓ Flexibility
✓ Speed
✓ Cost
✓ Quality
✓ Customisation - 37Describe quality as a performance objective✓ Customers expect good quality- Word of Mouth e.g. Suburu cars- ensures zero defects
Externally- enhances good/service in the market, avoid customer complaints
Internally- benefit to operations- prevents errors, dependability, increases speed, reduce waste, value adding
QUALITY OF DESIGN
- Have to understand needs/wants
- Quality of inputs and transformation arrangement
- Better quality= higher price e.g. Apple
QUALITY OF CONFORMANCE= does it match what it is designed to do? Does it live up to marketing claims?
QUALITY OF SERVICE= reliable, responsive, meet needs - 38Describe speed as a performance objective= time required by business to deliver to customer e.g. McDonalds- quick: drive thru
- Streamline process: reduce time at each stage
- shorter lead times, reduced wait times, faster processing (use technology!!!!)
Externally- enhances value
Internally- maintains dependability, cost saving - 39Describe dependability as a performance objective= customers expect to be served on time as promised
- don't deliver: bad rep
e.g. Limo- must turn up earlier to take guests to location and for photos
- consistant and reliable
GOODS: how long they are useful for
SERVICE: consistency and reliability - 40Describe flexibility as a performance objective= able to adjust/modify order if necessary
= able to vary the volume if there is a demand
= delivery time
Can better use plant, technology and change product design- add variety - 41Describe customisation in relation to performance objectives= able to satisfy customer needs individually
GOODS- full customisation rare, mass common e.g. car- colour mass produced but variety
- can be hard to customise; extra costs, training, equipment capabilities, skills - 42Describe costs in terms of performance objectives= aim to minimise expenses e.g. technology use, inputs used, waste reduction
- low cost per unit sold
- influenced by 4V's and internal performance - 43In relation to "new product/service design and development", what are some ways a business can be first to the market and be a market share leader?- research
- technical knowledge
- innovative skills
- create innovative, new products - 44Outline the two approaches a business owner can take when designing new products and services✓ Customer Approach- market research, design to preferences
✓ Innovation/new technology approach- creating new and appealing products through technology e.g. Apple- sold $9M iPhones without market research! - 45Outline the steps in designing and developing a new good.Market research > concept development > cost/benefit assessment > product design > product testing > product launch
CONCEPT DEVELOPMENT= market research, specifications, evaluate resources and skills, risks
PRODUCT DESIGN AND PROTOTYPE DEVELOPMENT= costs involved, analysis, sales estimated
PROTOTYPE TESTING AND ASSESSING= market testing, market needs met?
PRODUCT REFINEMENT
PRODUCT LAUNCH, DISTRIBUTION AND EXPANSION
✓ will it meet expectations ✓ will there be sufficient inputs available ✓ will there be technical issues ✓ is there enough capacity for production ✓ - 46Outline the features of designing and developing a new service.- customisation e.g. hairdressers
- some no customer contact e.g. chief in restaurant
Explicit service- the tangible aspect e.g. time, knowledge, skills, expertise - "the haircut"
Implicit service- "implied aspect"- the intangible aspect e.g. psychological wellbeing, feeling of satisfaction - 47Explain what is meant by supply chain managementSCM= the integration and coordination of flows between the bus. and the supplier (also includes delivery)
Want fewer suppliers- less costs (bulk), reliability, improved trade credit terms, quality
✓ oversea raw materials, info, energy, labour, production process, distribution and finance as they move through levels of distribution - 48Explain logistics management= the management to ensure that there are enough resources at the right time and place. The right quantities of resources and in the right condition. Set at the right price and for the right people
TRANSPORTATION= depends on type of product and distance to be travelled and cost. e.g. containers between major cities- ship; small parcel sydney to london- van and plane
MATERIALS= handling, packaging- depends on product (e.g. fragile, bulky, chemicals, gov. regulations for food)
STORAGE= secure spot to hold stock (can be short and long term e.g. JIT)
WAREHOUSING= storage and protection for later distribution- costs money (rent/purchase, insurance, losses)
DISTRIBUTION CENTRES= short term and strategically located to save time e.g. COLES off F3
DISTRIBUTION= ways of getting it to the customer- includes all other elements as above
One channel- producer ➵ consumer
Two channel- producer ➵ retailer ➵ consumer
Three channel- producer ➵ wholesaler ➵ retailer ➵ consumer
Four channel- producer ➵ agent ➵ wholesaler ➵ retailer ➵ consumer - 49Explain e-commerce in relation to supply chain managementE-procurement= the supplier is able to access supply levels of the bus. and so they can send any supplies before they run out e.g. printer toner levels
Business to Business (B2B)= direct communication between supplier and bus. using online systems. Supplier can manage needs of bus. and meet them
Business to Consumer (B2C)= online shopping, online payments - 50Explain global sourcing in relation to supply chain management, in reference to key termsSupplier rationalism= minimising amount of suppliers ➵ less wastage, cost and duplication
Forward Vertical integration= supplier takes over the business it supplies to ➵ decreased costs, greater control, increased reliability
Backward Vertical Integration= merging with the business it supplies to
Flexible/Responsive supply chain processes= become "leaner" and have less wastage, have improved processes and carry less inventory
Cost minimisation= using low cost off shore suppliers
Global sourcing influenced by;
➵ consumer demand
➵ cost of supplier
➵ Quality of inputs needed
➵ Flexibility of supply - 51What are some of the goals of supply chain management? Give an e.g of supply chain managementStrategic:
➵ warehousing- size, location
➵ manufacturing plant location
➵ partnerships
➵ technology
Tactical:
➵ inventory decisions
➵ patterns in demand
➵ competitor comparison
➵ identify bottlenecks
Operational:
➵ taking orders
➵ delivery
➵ storage of inputs
➵ manage damaged goods
ALDI: carefully chosen products, only products people need, close partnership with suppliers (produced only for them), strong quality control - 52Discuss outsourcing with reference to a case studyPositives; specialised, may have better quality, increased knowledge and skills, can be cheaper, can focus on core competencies, efficiency
Negatives; don't always know whether tasks are completed, language barriers overseas, unethical in some cases, loss of customers e.g. loss of jobs when IT was outsourced to India "sweat shops"
Apple makes a margin of about 40% of the products cost- they make products in china for about 4%- HIGH PROFIT - 53Give a case study for outsourcingApple- iPad 2 produced in China
Broadcom Corp- microcontroller for touchscreen
Samsung- Display and RAM memory chip
LG display Co- 9.7 inch screen
Foxconn- assemble parts - 54Describe leading edge and established technologyLeading edge= the newest, most advanced technology of the time
➵ leaders in the industry
➵ innovation
➵ more efficient, higher standard
Established= already been used and accepted due to reliability
➵ use of robotics
➵e.g. Electronic data interchange- barcoding, EFTPOS - 55Discuss the benefits and limitations of holding stockPositives:
➵ satisfy customers quickly
➵ discounted stock when bulk purchasing
➵ competitive adv- customer service, efficient
➵ revenue boosted- stock available on demand
➵ Increased customer loyalty
Negatives:
➵ Storage- large space needed- expensive; insurance, rent, theift
➵ spoilage
➵ theft
➵ obsolete goods (no longer used)
➵ overstock
Most control stock through electronic systems e.g. barcoding - 56Describe the inventory management approaches that a business owner could possibly useLIFO= used when there is no use by date e.g. machinery, tools, canned foods
➵ Stock bought most recently are sold first
➵ Tax advantage; recent stock is more expensive than old stock- therefore there is higher COGS on revenue statement= lower net profit= reduced tax
FIFO= perishable items, earlier stock placed ahead of new stock on shelf
JIT= minimum amount of stock held, delivered when needed e.g. Coca Cola- brings in bottles and cans when needed
➵ reduction in storage/warehousing costs
➵ No spoilage
➵ working capital increase - 57Describe the various types of quality management in the operations functionQuality Control= inspection, measurement and intervention
➵ inputs checked
➵ evaluation
➵ standards established to measure perf.
➵ can compare to other businesses-- industry standard benchmarks
Quality Assurance= application of international quality standards- prevent defects and delivery errors e.g. "a quality endorsed company"
Improvement= TQM, considers customer needs, all employees committed to excellence, KIP's
E.g. Toyota had problems with the brakes so they recalled all the products, so that they didn't risk reputation. - 58Why may a bus. be resistant to change?- FINANCIAL COSTS; high costs in relation to change- may have to retrain, purchase new equipment, pay out employees, etc.
➵ Purchasing new equipment= consider all costs- weigh up short term and long term impacts
Can be cost saving in long term- better communication, consistency, quality
➵ Redundancy Payments= staff may not be needed anymore (restructuring)- covered with Award of Enterprise Agreement- must pay out full time employee who has worked for over 12 mths.
➵ Retraining= change in hierarchy, new equipment and technology, new systems- must embrace change e.g. Kmart
➵ Reorganising Plant Layout= new equipment means new layout, may go from process to product layout, costs in transportation, electricity, labour, testing e.g. Car manufacturers- constantly change- get grants to ensure jobs retained
➵ INERTIA= fears of change- deskilling, competition, job loss, higher workloads, loss of familiarity - 59How can a business effectively overcome resistance to change?➵ identify the need to change
➵ SMART goals
➵ create positive culture (change agents, team work, change models)
CHANGE AGENTS= person acts as driver for change, manages change- encouraging, positive, good communicators
TEAM WORK= motivate staff, encourage decision making, training, negotiate
CHANGE MODELS=
➵ Force-Field Analysis Model- driving forces (pressures requiring change e.g. new ideas to increase sales), Restraining forces (don't allow and accept change e.g. older workers may fear technology- redundancy) - identify these forces and then develop strategies
➵Unfreeze/Change/Refreeze Model= workplaces have traditions and cultures. May need to "unfreeze" perceptions through assuring its for the better, then introduce change, and make sure changes are in for several years and stable period follows change
Management Consultants= specialists with high industry experience (instate of Management Consultants)- help with: industrial relations, marketing and promotion, recruitments/redundancy, business establishment - 60In relation to global factors in the operations function, describe global sourcing= purchasing supplies globally- cost advantage
Global Web= sourcing inputs, finance and manufacturing globally - if subsidiaries don't fulfil role= failures
Positives; cost advantage, new technology, specialisation, extend hours of operation
Negatives; relocation of operations- logistics and storage issues, different regulations, complex management - 61Explain economies of scale in relation to operations strategies➵ cheaper if higher volume production
➵ for a global market- increase in scale of production
➵ improved technology, capital investments, global marketing, hr training
➵ joint ventures, strategic alliances
Diseconomies of Scale- average cost of production rises- complex operations, loss of control - 62What is meant by scanning and learning in the global market?Scanning= search for opportunities where there is high demand for goods/services, lower cost inputs, changes in labour, new manufacturing processes, nations with low cost energy and infrastructure, technology
Learning= learn from industrial successes, staff members who have worked internationally, overseas experiences - 63Discuss research and development and the importance of it in a business➵ helps with innovation
➵ create new products and improve existing (time and money)
➵ gov. encourages; grants, tax incentives
➵New ideas= intellectual property
Positives; extend product life cycle, better reputation, increased quality, greater profit, new products
Negatives; diverted from prime function, costly in the short term, finances can be reinvested elsewhere, may be wasteful, possible ethical issues
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- Year 12 Business Studies (Operations) Flashcards on Business Studies- flashcards , created by natashaaliceee on 27/09/2014.
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