AQA business A level, section 4, operational decisions
A summary of key concepts, ranging from capacity utilisation, efficiency and productivity, to managing inventory and supply chains.
OPERATIONS Just In Time Quality control
- Reduce waste as little stock (arrives for order) - Inspector checks finished goods (responsible)
Operational objectives - Efficient stock control = Kanban repeat orders - Detect errors that are unavoidable
Management = use resources to provide right goods/services - Flexible, low pilferage, low inventory costs, cash flow - Unbiased specialists
Objectives = focus for decisions, yardstick, coordination - Reliable suppliers, no EoS - Expensive, demotivating for workers
Operational objectives Time based management Quality assurance
1) Reduce costs – lower prices, higher profit margin - Reduce time wasted, low lead time, efficient - Prevent errors in process, right the first time
2) Quality – satisfy, ↓ returns, punctual, ↑ prices, USP - Short product development with technology, innov - Employees check work (responsible) = motivating
3) Speed of response – satisfaction, loyal, lower labour cost - Need comms, trust, multiskilled, training - Assumes errors avoidable
4) Flexibility – adapt to change, reduce costs, cost - Comp adv – customer needs satisfied faster - Modern approach
5) Dependability – punctual, durable, quality - Speed not quality - Bias, time wasted, retraining costs
6) Environmental – duty of care, stakeholders
7) Added value – ↑ worth by modification (R – mat cost) Improving productivity TQM Total quality management
- Productivity = output per worker - Staff responsible for quality in dept (assurance)
Internal influences – nature, resources, obj, budget, training - Higher productivity ↓ labour costs (labour intensive - Teamwork, satisfy customers + co-workers
External influences – PESTLEC, demands - Improved by motivation, training, tech (speed) - Good rep, fewer faulty, decrease costs + returns
- Quantity not quality, redundancies if more productive - Long time to implement, expensive, retraining
Affect method of production with less, expensive, more waste output
1) Job production – one off items, skilled workers Quality standards
2) Flow production – continuous line, labour divisions Technology in operations - Awards to prove quality system (BS, ISO)
3) Batch production – small amounts of identical Robotic engineering – manufacturing, automation - Benefits: use in marketing, reputation, branding, mo
4) Cell production – groups complete set tasks Computers – product development, comms, marketing - Problems: assess the system not the standard, time,
5) Lean production – minimum waste + time 1) CAD, CAM, 3D printing prototype cheaper need monitoring, regular update, training
2) Stock control, EPOS (electronic), data, JIT
Capacity utilisation 3) Spreadsheets, decision making Benchmarking
- Capacity = max output in time 4) Email comms + internet target audience 24/7 - Set standards based on best
- Depends on employees, machinery, production, invest - Not all ideas transferable
- Capacity utilisation = how much capacity using (90%) Benefits - Analyse comp, compare, implement to close perf gap
CU = output / max capacity x 100 - Lower costs long term (labour) - Strategic/process/funcation/internal benchmarking
- 90% as need to temporarily increase supply for demand, - High quality – standardisation
no margin of error, surplus stock oppo cost working cap - Reduce waste, more efficient (marketing + delivery) Managing inventory
- Flexible in switching production, better comms Stock control chart = register stock over a time
Increase capacity if shortage - Safer, less boring jobs 1) Buffer stock (surges)
1) Longer hours 2) Reorder level
2) More machines, more labour (temporary, part time) Problems 3) Reorder quantity
3) Increase productivity, motivation - Resistance to change, training 4) Lead time (delivery)
4) Outsource – meet unexpected peaks in demand - Cost + time to implement, maintenance
- Job losses – low morale Reorder level – supplier lead
Underutilisation - Low barriers of entry time, demand,
- Spare capacity = output below maximum consequence
- Inefficient, ↑ unit cost (FC less spread), ↑ prices Labour intensive
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller katieg1500. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.48. You're not tied to anything after your purchase.
