Higher Business - Operations Revision

The role of operations in a business is to produce goods and services to a suitable standard as ___________ as possible

One benefit of effective operations management is that there may be _________ costs

When deciding on which supplier to buy from, a production manager will consider...?

• The supplier's quality

• The supplier's quantity

• The supplier's dependability

• The location of the supplier

One impact of overstocking may be that too much stock can result in ____ storage costs

One impact of overstocking may be that _______ is tied up in stock that could be used elsewhere in the business

One impact of understocking may be that the business will have nothing to sell which may lead to __________ having to stop

One impact of understocking may be that the business will receive a poor __________ with customers as they aren't able to fulfil orders

Outline 'maximum stock level'

• This is lowest level that stock should not fall below to ensure there are no shortages

• The highest level of stock that the business will hold in order to minimise costs

• When stock should be ordered in order to avoid it dropping below minimum levels

• The time that passes between ordering stock and receiving it

Outline 'minimum stock level'

• This is lowest level that stock should not fall below to ensure there are no shortages

• The highest level of stock that the business will hold in order to minimise costs

• When stock should be ordered in order to avoid it dropping below minimum levels

• The time that passes between ordering stock and receiving it

Outline 'reorder level'

• This is lowest level that stock should not fall below to ensure there are no shortages

• The highest level of stock that the business will hold in order to minimise costs

• When stock should be ordered in order to avoid it dropping below minimum levels

• The time that passes between ordering stock and receiving it