Topic 3: Business Operations

What are business operations?

The activities involved in producing goods and providing services to customers.

What is production?

The process of turning resources into goods or services that satisfy customer needs and wants.

What are the three main methods of production?

Job production, batch production and flow production.

What is job production?

Producing one individual product at a time, usually to meet a specific customer's requirements.

Give an example of job production.

A tailor making a made-to-measure suit or a builder constructing a customised house.

What is one advantage of job production?

Products can be customised to meet individual customer needs, allowing a business to charge higher prices.

What is one disadvantage of job production?

It can be expensive and time-consuming because products are made individually and may require skilled workers.

What is batch production?

Producing a group of identical products together before switching to another batch.

Give an example of batch production.

A bakery producing a batch of chocolate cakes before producing a batch of vanilla cakes.

What is one advantage of batch production?

It allows a business to produce several products together, potentially reducing costs compared with making every product individually.

What is one disadvantage of batch production?

Changing between batches may require cleaning or resetting equipment, causing delays and additional costs.

What is flow production?

Producing large quantities of standardised products continuously, with each product moving through a sequence of production stages.

Give an example of flow production.

A car manufacturer producing vehicles on an assembly line.

What is one advantage of flow production?

Large quantities can be produced quickly, reducing the average cost per unit.

What is one disadvantage of flow production?

Production can be expensive to set up, and a breakdown at one stage may stop the entire production line.

What is the difference between job and batch production?

Job production makes individual products, often customised for customers. Batch production makes groups of identical products before switching to another batch.

What is the difference between batch and flow production?

Batch production makes groups of products in separate runs. Flow production continuously moves standardised products through production stages.

Which method of production is most suitable for customised products?

Job production, because each product can be made to meet a customer's specific requirements.

Which method of production is most suitable for producing large quantities of identical products?

Flow production, because products can be made continuously and efficiently.

What is productivity?

The amount of output produced per worker or per unit of input over a given period.

How do you calculate labour productivity?

Labour productivity = total output ÷ number of employees.

A business produces 600 units using 10 employees. What is labour productivity?

600 ÷ 10 = 60 units per employee.

What is efficiency in production?

Using resources such as labour, materials and machinery effectively to produce goods or services with minimal waste.

How can a business improve productivity?

It can train employees, invest in machinery, improve production methods and reduce wasted time.

What is one benefit of increased productivity?

More output can be produced from the same resources, potentially reducing the cost per unit and increasing profit.

What is one disadvantage of investing in machinery to improve productivity?

The machinery may have a high purchase cost, and employees may need training to use it.

What is lean production?

A method of improving efficiency by reducing waste and using resources more effectively.

What is waste in lean production?

Resources, time or materials that do not add value for the customer.

What is just-in-time (JIT) production?

A production method where materials arrive shortly before they are needed, reducing the need to store large amounts of inventory.

What is one advantage of JIT production?

Less money is tied up in inventory, and storage costs may be reduced.

What is one disadvantage of JIT production?

If a supplier delivers late, production may stop because the business has insufficient materials.

What must a business do for JIT production to work effectively?

Maintain reliable supplier relationships, accurate planning and dependable deliveries.

What is kaizen?

A lean production approach based on making continuous, small improvements to business processes.

What is one advantage of kaizen?

Regular improvements can reduce waste, improve quality and increase productivity over time.

What is one disadvantage of kaizen?

It requires employees to participate consistently, and improvements may take time to produce noticeable results.

What is quality?

The extent to which a product or service meets the required standards and customer expectations.

Why is quality important to a business?

Good quality can improve customer satisfaction, encourage repeat purchases and protect the business's reputation.

What is quality control?

Checking products during or after production to identify defects, often by inspecting finished products.

What is one advantage of quality control?

Defective products can be identified before they reach customers, reducing complaints and returns.

What is one disadvantage of quality control?

Inspection takes time and costs money, and defects may only be discovered after resources have already been wasted.

What is quality assurance?

A system that aims to prevent defects by making quality everyone’s responsibility throughout the production process.

What is one advantage of quality assurance?

Preventing mistakes during production can reduce waste, rework and customer complaints.

What is one disadvantage of quality assurance?

Training employees and maintaining quality systems can increase costs and take time.

What is the difference between quality control and quality assurance?

Quality control identifies defects through inspection. Quality assurance aims to prevent defects by maintaining standards throughout production.

What is customer service?

The support and assistance a business provides to customers before, during and after a sale.

Why is good customer service important?

It can improve customer satisfaction, encourage repeat purchases, generate positive recommendations and increase sales.

What is one disadvantage of providing excellent customer service?

It may require additional staff, training and time, increasing operating costs.

What is customer loyalty?

When customers repeatedly choose the same business or brand instead of competitors.

How can a business improve customer loyalty?

It can provide reliable quality, helpful customer service, loyalty schemes and products that meet customer needs.

What is after-sales service?

Support provided after a customer has purchased a product, such as repairs, warranties and help with problems.

What is one advantage of after-sales service?

It can increase customer satisfaction, encourage repeat purchases and help differentiate a business from competitors.

What is one disadvantage of after-sales service?

It can increase costs because the business must provide staff, repairs or replacement products.

What is product knowledge?

Understanding a product's features, benefits, price and how it meets customer needs.

Why is product knowledge important for employees?

It helps employees answer questions accurately, recommend suitable products and increase customer confidence.

How can speed of service affect customer satisfaction?

Faster service can reduce waiting times and improve the customer experience, making