9072802
Description
Flashcards by Ashleigh-Jade Jones, updated more than 1 year ago
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Created by Ashleigh-Jade Jones
almost 7 years ago
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| Question | Answer |
| Factors Affecting Choice of Supplier: | -costs (low price but be wary of poor quality) -payment terms (cash flow) -quality -capacity -reliability -frequency of supply -flexibility |
| Causes of Sale Level Fluctuations: | -health/product publicity -trends -income levels -reputation/brand -legislation -advertising/marketing -interest rates -pricing -competition -external conditions e.g. weather/environmental issues |
| If Demand is Less Than Supply: | business has spare capacity as they are producing too much and no one is buying -sell assets -change to shorter working weeks or days -lay off workers -transfer resources to another area -increase demand |
| If Demand is More Than Supply: | the business is unable to produce enough to meet customer demand -extend factories -use overtime/longer hours -hire new/more staff -flexible workforce -part time or temporary staff (e.g. Christmas jobs) |
| Other Methods of Matching Supply With Demand: | -subcontracting/outsourcing -producing to order/mass customisation |
| Subcontracting/Outsourcing: | *when a business asks another to make all/part of its product -allows reduction of costs and capacity without reducing supply -allow the other business to increase capacity |
| Subcontracting/Outsourcing: (Advantages/Disadvantages) | Advantages: -businesses can react to change in demand quickly -specialiation could be applicable -easier to achieve non-standard orders as it doesn't disrupt production line Disadvantages: -no direct control over quality -too much of it could damage operations base -profit margins may be affected as producers also have to make a profit -patents may have to be shared with subcontractor |
| Producing to Order & Mass Customisation: | -producing to order: decide whether to take on non-standard orders e.g. Katie Price's pink Land Rover -mass customisation: matching the product to customers needs/wants but on a mass scale e.g. Land Rover Evoque (mass making reduces costs as there are large quantities -> lower unit cost) |
| Producing to Order & Mass Customisation: (Factors affecting choice) | -effect on production -flexibility of organisation -impact on costs -effect on staff |
| Producing to Order & Mass Customisation: (Advantages/Disadvantages) | Advantages: -keeping up with competition -flexible to change -expand customer base -expand product range -USP Disadvantages: -unit cost might increase -customers may go elsewhere if cheaper -productivity might lower if production takes longer -brand value/image issues |
| Influences on Amount of Stock Held: | -demand -type of business -nature of product -price of final product -cash flow -flexibility of supplier -bulk purchasing deals being available -production method |
| Inventory Stock Control Charts: | -lead times: as short as possible -buffer stock: as close to zero to avoid warehousing costs -re-order level: almost at zero to reduce stock costs and only re-order what is needed |
| Inventory Stock Control Charts: | *a chart that shows: -lead times (time taken between order and delivery to factory) -re-order levels (the point at which stock is re-ordered) -buffer level of inventory (minimum stock level as a just in case) -maximum stock level (maximum the firm will hold) -re-order quantities (how much stock is re-ordered) |
| JIT: (Advantages/Disadvantages) | Advantages: -less wastage -minimal storage costs -cash flow advantage (as not buying stock before it is used) -fresher produce (quality) Disadvantages: -supplier dependent -waste of resources if production is idle -bad reputation if cannot supply customer -inflexibility to match demand -lack of ability to bulk buy (cost saving) -frequent deliveries |
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