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Description
Flashcards by Abhishek Niraula, updated more than 1 year ago
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Created by Abhishek Niraula
about 7 years ago
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| Question | Answer |
| Advantages of efficiency and minimize costs | - Access to global marker No need to invest in shop premises, branch managers, staff. - Stock displayed virtually, reducing need for premises and carrying of stock (reducing costs) - Transactions are automated - Invoices and receipts can be sent through email (Reduces printing costs) - Reducing labour costs via website support - Interactive areas for customer feedback (cutting market research costs) |
| Advantages of selling products online | - Increased efficiency - Fewer resources - More profitable due to lower costs - More competitiveness due to lower costs - Staff needed is a lot less - Great convenience for customers |
| Disadvantages of selling products online | - Costs for designing and maintaining an online site - Assuring the company has a prominent position in Google - Additional packaging / delivery costs and transportation - Premises needed for dispatching goods |
| Chinese Supplier - Manufactoring | - Manufacturing; the difference between the selling price and the cost of materials is the price used to make it. - Value added is the increase in worth, for example; BMF do not have to make the T-Shirts themselves |
| Buying from the Chinese Supplier | - Good for globalization - Provides an opportunity for international trade - However there is a change in exchange rate - China is one of the BRIC economies; less industrialization and lower living standards - Provides jobs for locals and raises their standard of living - They have the ability to have a high rate of economic growth and industrialization making them open to foreign investment - The packages will go through imports which will need to be passed through tariffs - Outsourcing production is more difficult to control quality; Management and control production - Travelling over longer distances could cause delays |
| Exchange Rates for the Chinese Supplier | - Change in exchange rate could affect sales and revenue - If the pound strengthens towards the Yuan, then costs would reduce and profits would increase - If the pound becomes weaker, costs increase and the profit is reduced - The greater the change in rate of exchange between the pound and the yuan, the greater number of T-Shirts buys from China having a bigger impact on BMF's profits and costs. |
| Use of flow production | - Flow production is the continuous production of a large quantity of identical items - Involves a large investment in specialist machinery and good for BMF |
| Advantages of flow production | - Lower unit costs and labour costs are low as the process is automated - With large quantities produced, there is maximum opportunity for the business to benefit from economies of scale - The Chinese supplier can offer lower prices than competitors and higher sales and also higher profit margins -Improved quality and increased productivity as there are no delays in processes as it is automated and the process is programmed and specialized to make products at a high quality - Products can be made in a shorter space of time and mass produced which can maximize sales and capacity utilization hence reducing unit costs |
| Disadvantages of flow production | - Can be expensive to set up -Requires careful planning - Requires production line speeds to be considered setting up optimum rates - Can be inflexible - Low job satisfaction and if one part of the line breaks down, the whole line is affected |
| Use of Batch Production | - Where a large or small quantity of the same item is produced at the same time - Workers specialize in a particular process or job |
| Advantages of batch production | - Allows for a range of products meeting different customer requirements - Helps maximize sales and marker share - The workers are specialized and therefore are quicker and make fewer mistakes - Lower labour costs - Unit material costs are lower than job production because there is a scope for economies of sale - Leads to greater competitiveness over price or higher margins |
| Disadvantages of Batch production |
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