unit 3.2- Business studies

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Created on: 20-01-18 11:17

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unit 3.2- Business studies
- just-in-case
  - a method of operating a production and distribution system with BUFFER STOCKS in every stage of production
    - buffer stocks- a stock of basic commodity acquired in a period of low or unstable prices
    - in case there is a supply shortage or demand increases
    - ensures continuous production
    - However, firms can be left with big stockpiles of items.
    - Tendsto be replaced by JIT and other stock control methods
- just-in-time
  - Japanese method that aims to keep stock levels to the bare minimum
    - ideally zero!!
    - arrives immediately before it is used.
      - reduces the cost of storing large stocks
      - requires a lot of coordination between the firm and the supplier
        otherwise the firm could run out of stock!
      - extra training may be needed
        staff need to get used to working with very little stock.
        very stressful if they're always on the verge of running out of stock
- types of stock
  - raw materials
    - brought from suppliers - waiting to be made into products
  - finished products
    - finished goods of acceptable products waiting to be sold
  - work in progress
    - incomplete products in the progress of being made
- design mix
  - function
    - what does it do?
  - cost
    - high quality= high cost= high price
  - appearance
    - how it looks?
    - very important stage of design
- research and development
  - 1- idea generation
  - 2-screening of ideas
  - 3- development of ideas
  - 4- prototype and testing
  - 5- launch
  - happens before the introduction phase of the product life cycle
    - increases the profitability
    - gain a reputation as an innovative business
      - attract the best employees
    - find new business partnerships
    - could reduce costs
    - get your product to market more quickly
- quality assurance
  - where quality is built into the production process
    - expensive
      - have to train staff
  - quality is everyones job
  - is part of every process
    - ensure that you can determine where a problem has come from
  - try to ensure zero defects
  - kaizen
    - means 'continuous improvement'
  - role of management- to put in place quality systems
  - quality standard
    - quality control
      - where finished products are checked by inspectors to see if they meet standards
        have to restart the whole thing if it is not up to standards
        
        do not have to train as many staff members as it is only done at the end
      - tangible measures of quality
        appearance, reliability - physical
      - intangible measures of quality
        perception, brands- unphysical
    - many products are made to standards which are laid down by independent organisation
      - British standards institution
      - British electro technical approvals board
      - British toy and hobby association
    - internationally recognised set of quality assurance standards called ISO
      - International Organisation for Standardisation
        ISO 9000
        basic standard
        
        ISO 9001
        covers quality in design, production installation & servicing
- quality control
  - where finished products are checked by inspectors to see if they meet standards
    - have to restart the whole thing if it is not up to standards
    - do not have to train as many staff members as it is only done at the end
  - tangible measures of quality
    - appearance, reliability - physical
  - intangible measures of quality
    - perception, brands- unphysical
- consumer protection laws
  - sale of goods act
    - gives consumers right to compensation if a product they buy is not of merchantable quality, not as described as not fit for purpose
  - trade description act
    - makes businesses liable for prosecution and fines if products are sold in a misleading way
    - lets businesses understand the law, could reduce costs, increase revenue and profits
      - sale of goods act
        gives consumers right to compensation if a product they buy is not of merchantable quality, not as described as not fit for purpose
- cost effective operations and effectiveness
  - productivity= output per worker
    - total output divided by number of workers
    - if productivity increases cost per item falls
    - how to increase productivity
      - training
      - better equipment
      - more effective work practices
  - ways to reduce costs
    - change suppliers
    - relocation
      - move abroad
        cheaper - smaller minimum wage
    - better design
      - easier and cheaper to make
    - cutting overhead costs
      - refers to all on going business expenses
- effective customer service
  - quality
  - ontime service
  - dealing with complaints
  - innovation
  - spotting a problem
  - collaborations
  - listening to customers
  - going above what is expected

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unit 3.2- Business studies

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