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Management of operations (Quality (Quality Assurance (Based on prevention…

- - - - Storing stock in one place
        
        Advantage
        
        More cost- effective than maintain many small areas. Can take advantage of bulk buying, storage may be cheaper. Increased efficiency in distribution.
        
        Disadvantage
        
        Time wasted going to and from storage area. Expensive to set up and maintain the dedicated storage area, and training specialist.
    - - Storing stock in more than one place
        
        Disadvantage
        
        Stock is in more than one location, meaning several warehouse are requires. This is expensive. Less rigid control- theft and loss are more likely. Takes up space in production areas.
        
        Advantage
        
        Stock is always available. Orders will reflect actual usage. Faster turnover of small amounts of stock reduces likelihood of deterioration/ decay.
  - - - Consequences of overstocking
        
        Increases the costs of storage, security and insurance. Could mean some stock goes to waste as it could go out of fashion or deteriorate. This could mean the business may have to sell it on for less or discard it. Higher risk of stock being stolen
      - Consequences of understocking
        
        Production may stop, meaning employees and machines will sit idle. Customers might not receive there order in time, therefore leading to complaints and a bad reputation. The business may have to pay higher admin and delivery costs as the business will be buying smaller and more frequent orders. Also they won’t be able to take advantage of bulk buying.
  - - - Advantage
        
        Improves cash flow as capital isn't tied up in stock. Waste is also reduced as there is less damaged and unused stock. Reduces storage costs (space, equipment and staff) and means theirs more factory space available for productive use. Less vulnerable to external ( e.g. fashion) changes
      - Disadvantage
        
        No time for quality control when stock arrives. Can't bulk buy (economies of scale), therefore making stock more expensive. A close relationship/ faith is required with supplier. Less environmentally friendly as more journeys with less stock will be made, also increasing the delivery costs which will then have an impact upon the businesses profits.
  - - - Minimum stock level
        
        This is the lowest amount of stock the business can have at any one time. If it falls below this level then production will stop.
      - Re-order level
        
        this is when a repeat order is made. It is set at an exact point by the business so they will still have enough stock for production until the order arrives. Meaning when it does arrive the stock will be at it’s minimum.
      - Maximum stock level
        
        This is the highest amount of stock the business can have at any one time. Costs will be high as the warehouse will be full.
      - Lead time
        
        The time between the stocks ordered and for it to arrive.
      - Re-order quantity
        
        amount of stock ordered so the stock levels will go back to the maximum
- - - - Advantage
        
        Batches can be changed to suit the requirements of the customer, which will lead to higher customer satisfaction. Raw materials can be bought in bulk therefore saving capital. Standardised machinery is used which reduces costs on labour. The need for highly skilled workers is reduced.
      - Disadvantage
        
        Equipment and employees might not have anything to do between batches, which costs money. Any mistakes, in one item can result in the whole batch being wasted , which costs money and waste time. Employees motivation is less than in job production.
  - - - Advantage
        
        large amounts of identical products can be made. Raw materials can be bought in bulk, saving the business capital. Production often uses lots of machinery that, compared to humans can work for longer and don't need a wage. Quality can be easily checked at different stages of production.
      - Disadvantage
        
        The individual customer requirements cannot be met as each product is identical. If a fault occurs during production this can cause the whole production line to stop. Large demand for products is needed because they are made in large quantities. Motivation can be low among employees due to repetitive nature of the work they have to do.
  - - - Advantage
        
        The customer gets exactly what they want which in turn increases their satisfaction. High prices can be charged as it is a unique/ one-off product. Designs can be changed to suit each customers requirements, even when production has begun. Employees are more motivated as they are making a range of different products therefore using a range of different skill sets.
      - Disadvantage
        
        Highly skilled employees are required to make each different product which can be expensive. Specialists tools and equipment might be needed, which can be expensive to buy and maintain (equipment wont be used all the time). Can't always buy raw materials in bulk and might miss out on economies of scale (more expensive). Can take a long time to create a unique product which may lead to employees losing motivation, and customer getting annoyed.
  - - - When businesses use machinery controlled by either computers or people.
        
        Advantage
        
        Machines can work 24/7 without the need for breaks. Machines can produce a consistent and standardised accuracy and quality of work. They do not require motivation or wages.
        
        Disadvantage
        
        Individual customer requirements cannot be met. Breakdowns can occur which can be expensive. Employees become tired and board of repetitive tasks that might need to be carried out.
    - - When businesses use more employees to do the work rather than machines.
        
        Disadvantage
        
        It costs more to recruit, select and train new employees. The accuracy and the quality of the work from person to person can vary. Expensive to pay wages and motivate employees.
        
        Advantage
        
        Employees can use their initiative when required. There is always a supply of labour available (although highly skilled workers may be harder to find). Cheaper than purchasing and maintain equipment.
  - - - Some Labour and Capital intensive involved in production, e.g. people working the machines.
    - - Capital Intensive has replaced the need for humans to carry out the work required because machines, equipment and technology can do it instead.
- - - - Customers are more likely to make a repeat purchases. A good reputation can be gained, which will encourage new customers. Profit and sales can be maximised. Easier to recruit staff too work in a business with a good reputation.