IB BUSINESS - OPERATIONS MANAGEMENT
What are the certain key features of the SCC Chart
1) Buffer Stocks : - The minimum stocks that should be held to ensure that production could still take place should a delay in delivery occur or production rates increases 2) Maximum Stock Level 3) Re-Order Quantity: - the number of units ordered each time 4) Lead Times: - the normal time taken between ordering new stocks and their delivery 5) Re-Order Stock Level: - the level of stocks that will trigger a new order to be sent to the supplier
What is the MARKETING department link with OPERATION MANAGEMENT?
1) DESIGNING THE CORRECT MARKETING STRATEGY: - A suitable strategy is designed for the 4P's or 7'PS 2) CONDUCTING MARKET RESEARCH: - to ensure that the products or services meet the needs of the target market, effective communication is required between marketing and operations. To guarantee an effective communication between different departments. A certain management style and organizational structure is required.
If you are asked to suggest a location, what are the types of business that you need to think before?
1) MANUFACTURE (unskilled labour): - Transport links - Low labour costs - Low land costs 2) MANUFACTURE (skilled labour) - Transport links - Skilled workers 3) RETAILER (physical store): - Transport links - Close to the target market 4) RETAILER (online) - Transport links - Cheap lands
What is cradle to cradle?
A manufacturing principle that seeks to create production techniques that are not just efficient but are waste-free and truly sustainable.
Method of Lean Production: What is "Andon"
A manufacturing term referring to a system that notifies management, maintenance and other workers of a quality or process problem
What is a copyright? What is a trademark?
Copyright: Legal right to protect and be the sole beneficiary from artistic and literary works Trademark: A distinctive name, symbol, motto, or design that identifies a business or its products - can be legally registered and cannot be copied
What is a CRISIS MANAGEMENT?
Crisis management concerns the steps a company can take to limit the damage caused by an unpredicted event or crisis.
What are the disadvantages of contingency planning?
DISADVANTAGES: 1) COST AND TIME: - For plans to be relevant, they need to be updated and reviewed regularly. This is an opportunity cost in terms of times and resources as firms will need to develop different plans for diverse situations. 2) RISK AND SAFTEY: - People can react in unpredictable ways and events can develop rapidly. If a contingency plan does not take this into account. it is limited. THEREFORE, CONTINGENCY PLAN NEEDS AN INVESTMENT OF TIME AND MONEY. IF THEY ARE NOT UPDATED REGULARLY, THEY MAY BECOME OBSOLETE AND CAN DO MORE HARM THAN GOOD
Explain Ecological Sustainability
Ecological sustainability refers to the use of Earth's natural resources and the effect their current consumption will have on future generations. Businesses should decrease their 'ecological footprint' - Operations management plays a significant role in reducing a products ecological footprint, thus, increasing ecological sustainability.
Explain Economic Sustainability
Economic Sustainability focuses on businesses making the most efficient use of their resources so that the future of the company and its stakeholders is not adversely affected by decisions made today. - Economic sustainability encourages businesses to focus on long-term growth rather than short-term profitability. - Businesses that adopt an ethos of economic sustainability are more likely to use green energy or recycled material in their operations.
What is INSOURCING?
Insourcing means ending contracts with external suppliers to undertake previously outsourced business functions.
Define Quality Control
Inspection of the product or a sample of products.
What is the just-in-time-stock control?
is a stock control method where the business doesn't store any raw materials. Instead, it has regular deliveries that bring only what is needed before its existing raw materials run out, so buffer stock is not needed.
what happens if the cost to make is higher than the cost to buy?
it is better to buy in or outsoruce
What is a: - PRODUCT - GOOD - SERVICE ?
PRODUCT: the output of the operations management department. This could be anything from a haircut (service) or a lump of coal (good) GOOD: These are products that are largely tangible SERVICE: These are products that are largely intangible
What about Land costs?
Prime locations cost a lot of money. If the firm does not need the benefits of an expensive location, it makes little sense paying for one.
Define Sustainability
Sustainability is the ability to continue a behavior indefinitely. A business should organize its operations in such a way to ensure that the actions today do not have an impact on future generations.
Evaluate the cradle to cradle principle?
The cradle-to-cradle design is likely to lead to increased costs for a company. However, if marketed correctly, it can provide a unique selling point. This could not only increase sales but also improve loyalty and command a higher selling price.
What about SPEED?
The goal of the crisis management is to return to normal business operations as soon as possible. Rapid decision making and effective implementation of those decisions will help achieve this aim.
What is the operations management function?
The operations management function is responsible for the production of a firms goods and services
Methods of Lean Production: Explain Continuous Improvement (KAIZEN)
The philosophy behind Kaizen is that all workers have something to contribute to improving the way their business operates and the way the product is made.
Define Innovation
The practical application of new inventions into marketable products
Define capacity utilization
The proportion of maximum output capacity currently being achieved
Define productivity
The ratio of outputs to inputs during production
What is Research and Development (R&D)?
The scientific research and technical development of new product and processes
What is the HR management link with the operations management?
The specific support that HR requires will depend on the strategy being produced by the operations management. THE HR DEPARTMENT MAY CONSIDER THE FOLLOWING: 1) THE SCALE OF PRODUCTION: - MASS PRODUCTION: it is the manufacture of large quantities of standardized goods. They require large number of labors who do not have to be skilled - NICHE PRODUCTION: it is the small-scale manufacture of a product that is sold to a specific section of the market. They require a small but highly skilled amount of labor. 2) RELOCATION: - Locating companies production facilitates offshore in low wage regions. Due to the access of skilled workforce or to gain better access to larger markets 3) RESEARCH AND DEVELOPMENT: - The development and innovation of new products is a highly skilled task. To have a chance of success, the very best staff are needed
What is the Just-in-case stock control?
The stock management strategy that businesses use when they hold high level of stocks because there is a risk of 'stock-out'
What is the Stock Control Charts
They are charts or graphs that are used for businesses adopting the JIC strategy to monitor the stock levels.
What about TRANSPERANCY?
Transparency and full disclosure of the gravity of the situation may be the best option at times of crisis.
What are unmet needs?
When customers have needs that are unmet from the existing goods and services available on the market. Businesses can discover those unmet needs by market doing research
Exam tip !!
When possible, try to make this link: efficient management of stock can help to reduce waste levels and this can create added value for a business.
EXAM TIP
You may be asked to evaluate whether a company should adopt a just-in-time approach to stock control. Generally, this is a good idea. However, application is important. If a reliable supplier cannot be found, or demand is unpredictable, you may recommend they use just in case until these problems can be overcome. The idea is to analyse the stimulus material and to discuss the pros and cons of just-in-time production. At the end of your discussion, you should make a final judgement, backing it up with information from the case.
What is the ISO 9000/ International Organisation for Standardization:
an internationally recognized certificate that acknowledges the existence of a quality procedure that meets certain conditions. Limitations: Expensive Inspection and bureaucratic form-filling
What are the different methods of quality management?
- Benchmarking - Quality circles - Total quality management (TQM)
What are the benefits of successful R&D spending to business?
- Competitive advantage - It can create intellectual property rights - Customer loyalty - High premium prices - Publicity - Lower costs
What are the benefits to a country of encouraging R&D spending?
- Creation of high-tech jobs with higher income - Creation of high-added value products - Prestige - Attracting investment by multinational corporations
What are the advantages of producing quality products and services?
- Easier to create brand loyalty - Longer life cycles - Less advertising may be necessary as the brand will establish a quality image through the performance of the products
What are the three areas of sustainability that a business should consider?
- Ecological Sustainability - Social Sustainability - Economic Sustainability
What are the conditions that determines success of quality circles?
- Everyone must be committed to improving quality - Full support needed from management - The team should be empowered to implement the recommendations
Ways to increase productivity levels?
- Improve the training of employees to raise skill levels - Improve worker motivation - Purchase more technologically advanced equipment - More efficient managers
What are the limitations of R&D?
- It does not always lead to an invention or discovery - Expensive and has an opportunity cost - money could be spent on marketing instead - Inventions do not always lead to successful innovative products - Competitors R&D spending may result in even more successful products - Ethical issues
What are the weaknesses of inspecting quality?
- It is looking for problems and is therefore negative in its culture - The job of inspections is tedious and so inspectors become demotivated and may not carry out their tasks efficiently. - It is time consuming
What are the factors that affect location?
- Land costs - Labour costs - Government assistance - External economies of scale - Transportation and other infrastructures - International factors - Company history
What are the 4Ps Innovation Model?
- Product Innovation: new, marketable products or improving existing products. - Process Innovation: new methods of manufacturing a product or providing a service that offers benefits to business and customer - Positioning Innovation: This involves the relocation of the customer's perception of a certain product - Paradigm Innovation: A distinctive change in what a business does or in the nature of goods/services available.
For JIT to work effectively what conditions must be met?
- Relationships with suppliers have to be excellent - Production staff must be multi-skilled and prepared to change jobs at short notice - Equipment and machinery must be flexible - Having accurate demand forecasts - Quality must be everyone's priority
What about external economies of scale?
- Shared infrastructure - Skilled labour - Access to suppliers - Improved image
What are the limitations of lean production (aka, when is it not suitable for businesses)?
- The costs of new technology and retraining are so substantial that some businesses might have to survive - Businesses depend on customer service as their USP - Production processes are very expensive to start up
What are factors that may influence the R&D strategy and the level of R&D spending of a business?
- The nature of the industry - The R&D and innovation spending plans of competitors - Business expectations - The risk profile or culture of the business - Finance is needed for effective R&D - Ethical considerations
OVERALL: what are the main advantages of lean production?
- Waste of time and resources is substantially reduced or eliminated - Unit costs are reduced, leading to higher profits - There is less risk of damage to stocks and equipment - New products are launched more quickly
EXAM TIP
- When making decisions about how to deal with excess capacity it is important to consider both the length of time that the spare capacity might exists for and the causes of the problem
What are the potential drawback of working at full capacity for a long time?
- staff may feel under pressure due to the workload. This can increase stress levels. - Customers who wish to increase their orders will have to be turned away or kept waiting for long periods - Machinery will be working flat out
define zero defects
the aim of achieving perfect products every time. - this is the aim of TQM
What is better when cost to buy is higher than the cost to make?
the business will benefit from making the product 'in-house'
define productivity
the ratio of outputs to inputs during production. Eg: output per worker per time period (in other words, it is concerned with how efficiently inputs are converted into outputs).
What is cost to make?
total cost of production if manufacturing is kept in-house. Cost to make: Fixed costs + (Variable costs × Quantity) = $______
What is cost to buy?
total cost of subcontracting production to a supplier. Cost to buy: Price × Quantity = $______
What is a quality product?
: a good or service that meets customers' expectations and is therefore 'fit for purpose'.
What is contingency plan?
A contingency plan outlines the immediate actions a company should take in the event of a crisis
What are the three costs associated with stock holding?
1) OPPORTUNITY COST - working capital tied up in stocks could be put to another best alternative use 2) STORAGE COSTS - they have to be held in secured warehouses and might need a refrigerator for example. 3) RISK OF WASTAGE AND OBSOLESCENCE - goods can be damaged in stock - they lower the value of stocks and can make them sell for a lower price
What are international factors that companies should consider when deciding the location?
1) TRADE BARRIERS: - Like tariffs and quotas 2) EXCHANGE RATE: - If a currency becomes stronger, this can make it harder to export goods.
What is the FINANCE link with OPERATION MANAGEMENT?
1) UPDATING PRODUCTION FACILIATIES: - Long term sources of finance need to be secured for investment to take place. 2) PAYMENT SYSTEMS: - Account department must have a system ensuring that workers receive the correct payment at the correct time.
What are the ways to overcome long term capacity shortage problems? and what are their advantages + disadvantages
1) Use subcontractors or outsourcing of supplies components or even finished goods Advantages: - no major capital investment is required - quick to arrange - Offers greater flexibility Disadvantages: - less control over the quality of output - higher administration costs - higher unit costs 2) Capital investment into the expansion of production facilities: Advantages: - long term increase in capacity - Firm is in control of quality and final delivery times - Economies of scale Disadvantages: - high capital costs - problems with raising capital - time consuming to build and equip a new facility
What are the costs of not holding enough socks (aka "Stock-out" costs)?
1) loss sales 2) idle production resources 3) special orders could be expensive 4) small order quantities
What are the four things that crisis management depends on?
1- communication 2- transparency 3- speed 4- control
What are the stages in benchmarking?
1. Identify the aspects of the business that needs to be benchmarked 2. Measure performance in these areas 3. Identify the firms in the industry that are considered to be the best 4. Use comparative data from the best firms to establish the main weaknesses in the business 5. Set standards for improvement 6. Change processes to achieve the standards set 7. Re-measurement
What are the three stages to effective quality control?
1. Prevention 2. Inspection 3. Correction and Improvement
When using a quality assurance system, a business considers quality in every operations decision it makes. What does it include?
1. Product design - designers should focus on ensuring customer requirements are met or even surpassed. 2. Production process - this should be designed to ensure products are not damaged during the manufacturing process. 3. Component delivery - only reliable suppliers are used. Parts are inspected as they arrive at the factory. 4. Regular inspections - production staff are trained to check their work to ensure faulty goods are not passed further down the production line
What is OUTSOURCING/SUBCONTRACTING?
A subcontractor is a an external company that is hired to carry out a task of behalf of another company. The process of hiring the external company is known as outsourcing or subcontracting.
Production planning : Define supply chain
A supply chain refers to all the stages of production through which a product passes, from the extraction of raw materials to the delivery of finished products or services to final customers.
Define Quality Assurance
A system of agreeing and meeting quality standards at each stage of production to ensure consumer satisfaction.
What are the advantages of contingency planning?
ADVANTAGES: 1) COST AND TIME: - At times of crisis, a detailed plan aid swift decision making. If solutions are evaluated in advance, then rapid implementation should be possible. This can minimize making costly mistakes. 2) RISKS ADN SAFTEY: - An effective plan can help to minimize risk of potential accidents or loss of life
What are the advantages and disadvantages of batch production
ADVANTAGES: - A variety of products can be produced in order to meet the requirement of different target markets. - Production is more flexible - can be adjusted to meet changes in customers taste - A range of products can be produced by a single machine, reducing investments and costs. - More capital intensive, meaning, higher productivity and lower average costs. DISADVANTAGES: - High storage costs - Workers job are likely repetitive which leads to lower motivation - Productivity costs and average costs are likely to be higher than for mass/flow production - Less flexible than job production
What are the advantages and disadvantages of both Mass production and Flow production?
ADVANTAGES: - Capital intensive: therefore higher productivity and lower average costs - Labour is likely to be less skilled than in job productions, meaning lower wages and reduce costs. - Products are standardized, meaning that there will be fewer chances of errors during production - Output is massive and can satisfy global markets DISADVANTAGES: - Factories and production lines have massive set-up costs - Labour that is used in the production processes are likely to be unskilled and unmotivated - Companies have to invest resources to maintain motivation levels continuously so that it does not affect the quality of production - Not flexible
What are the advantages and disadvantages of Just-in-time stock control?
ADVANTAGES: - Costs of storage and stock holding are reduced - Space released from storing stocks can be used for productive purposes - Less chance of stock becoming outdated or obsolescent - The multi-skilled and adaptable staff required for JIT to work may gain from improved motivation DISADVANTAGES: - Any failure to receive supplies of materials or components in time, will lead to expensive production delays - Delivery costs will increase due to the frequent deliveries - The reputation of the business relies significantly on outside factors such as the reliability of supplying firms
What are the advantages and disadvantages of Job Production?
ADVANTAGES: - It is built exactly to the customer's requirements so that a higher selling price can be demanded - Workers are often more motivated as they are building a unique product. This should lead to fewer mistake and a higher quality product DISADVANTAGES: - The small scale of output may result in a higher average cost - If it is used in order to build "megaprojects", such as bridges or stadiums, demand is likely to be irregular, leading to potential cash flow problems
What are the advantages and disadvantages of Cell production?
ADVANTAGES: - Potentially lower absenteeism and lower labor turnover - Higher motivation - Empowers teams can solve problems easily, or even stop problems from arising. - Multi-tasked staffs can perform a variety of tasks, so it can cover the staff that are absent DISADVANTAGES: - Continued investment in staff training is required - Factories may need to be redesigned in order to meet the needs of the teams(huge cost). - Productivity can be lower than for mass production
What are the advantages and disadvantages of the Just in case stock management approach?
ADVANTAGES: - Raw material supply hold-ups will not lead to production stopping - Stocks of finished goods can be displayed to customers and increase the chances of sales - Stocks of finished goods can be used to meet sudden, unpredicted increases in demand - Stocks of raw materials can be used to allow the firm to meet increases in demand by increasing the rate of production quickly DISADVANTAGES: - There are high opportunity costs of working capital ties up in stock - High storage costs - Risk of goos being damaged or becoming outdated - Space used to store stock cannot be used for productive purposes
What about transportation and other infrastructure?
Access to an efficient transport network allows customers to visit stores and for suppliers to deliver raw materials. This has a twin advantage of increasing potential sales and reducing costs.
What are the advantages and disadvantages of ANDON?
Advantages: - Immediate attention to manufacturing problems is raised - Can lead to immediate reaction to quality, down time and safety problems - Improve the ability of supervisors to quickly identify and resolve manufacturing issues Disadvantages: - Complex systems may be expensive to install - Workers will need to be trained in using the system and fixing problems - Workers may demand extra wages for taking on additional responsibility.
What are the advantages and disadvantages of JIT ?
Advantages: - It improves cash flow by reducing stock holding - Costs of storage and stock-holding are reduced. - There is much less chance of stock becoming outdated or obsolescent. - Having fewer goods held in storage also reduces the risk of damage or wastage Disadvantages: - Any failure to receive supplies of materials or components in time will lead to expensive production delays. - Delivery costs will increase as frequent small deliveries are an essential feature of JIT. - Order administration costs may rise because each order is likely to be very small - The reputation of the business relies on the outside factors of the firm (eg. reliability of supplying firms).
What are the advantages and disadvantages of "Kanban"
Advantages: - They help simplify planning and match production to meet changing customer demand. - Kanban cards make the day to day flexibility easier - Lower levels of stock put pressure on staff to avoid waste. Disadvantages: - Mistakes are more likely to stop the entire production line as replacement stock components may not be available. - Delays in deliveries or incorrect orders can lead to production staff running out of materials to work with.
What are the advantages and disadvantages of the " Continuous Improvement (KAIZEN)"
Advatnages: - A range of ideas are suggested, so the company is more likely to make the 'best' decision. - Employees may have a greater knowledge of the problem than managers/directors - The decision to involve staff helps them to feel valued, improving motivation Disadvantages: - Some changes cannot be introduced gradually and may need a radical and expensive solution - senior managers may feel resistant to such a program due to their existing culture. - In the short term, there may be tangible costs; a scheme, staff training to organize meetings, and lost output as a result of meeting time.
Method of Lean Production: What is the "Just-in-time (JIT) - stock control":
Aims to minimize costs by reducing or even eliminating the stock being held by a firm.
What is total quality management?
An approach to quality that aims to involve all employees in the quality-improvement process
What about CONTROL?
Autocratic leaders are effective for this aspect. Autocratic leaders make quick decisions and ensure that actions are carried out, which can lead to an effective response.
What are the benefits and limitations of QUALITY - CONTROL SYSTEMS?
BENEFITS: - It will lead to lower mistakes in the inspection process - Production staff are free from additional responsibilities, allowing productivity to rise. - Job enrichment LIMITATIONS: - Products are only checked at the end of the manufacturing process. This can allow stocks of faulty products to build up - If inspectors are only checking a sample of finished products, faulty goods may be missed.
What is batch production?
Batch production involves producing items in identical groups. Small changes are made in each batch so that a range of customer's needs can be fulfilled. This method can be considered as a mix of job production and mass/flow production.
Why would firms need to reorganize their production and what are the methods of re-organizing?
Because of business growth or external changes and so on. Methods: - Outsourcing/subcontracting - Offshoring - Insourcing
What is Benchmarking
Benchmarking is the process of comparing yourself with the other best firms in terms of quality and seeing what you can learn from their techniques.
What are the benefits of quality circles?
Benefits: - Improves quality due to discussions of ideas and solutions - Increases motivation - Makes full use of the knowledge and experience of the staff
What are the benefits and limitations of Total Quality Management?
Benefits: - It increases staff responsibility and might therefore help staff motivation levels. - Fewer mistakes are made, improving the overall quality of production. - Quality inspectors may no longer be needed, reducing wage costs. Limitations: - Productivity may fall initially as production staff has additional responsibilities. - Introducing TQM requires staff to be suitably trained, potentially increasing costs. - Staff may demand additional wages because of the extra responsibility.
What are the benefits and limitations of benchmarking?
Benefits: - faster and cheaper way of solving problems - Better ideas for improvement and increased motivation - It is a process that can assist the firm to increase international competitiveness Limitations: - The process depends on obtaining relevant and up to date information from other firms in the industry - difficult - copying the ideas and practices of other firms may discourage initiative and original ideas.
What about COMMUNICATION?
Effective communication with both external and internal stakeholder is essential. Initially, a one-way communication with employees ensures that everyone understands the problem, plan and their responsibilities. After this, a two-way communication may also be necessary. External communication is of equal importance. Keeping ongoing dialogue with suppliers, consumers and the public can earn good will.
What is cell production?
Employees work in teams and take joint responsibility for a large section of the manufacturing process. It is considered as a part of lean production
What are the 7 main sources of waste in industry?
Excessive transportation of components and products Excessive stock-holding Too much movement by working people Waiting time Overproduction Over-processing Defects
Define Excess Capacity
Exists when the current levels of demand are less than the full capacity output of a business - also known as spare capacity
How can the business efficiency and productivity increase?
Improving employee's skill level Improving worker's motivation Purchasing more technologically advanced equipment More effective management of labour and other resources
What are the impacts of Lean production on Business Functions: - Finance - HRM
Finance: - Purchasing new and advanced equipment will be expensive HRM: - workforce and management team will need to be prepared to accept the necessary changes in working conditions and levels of empowerment.
Changing from one design of product to another requires flexibility in 3 main areas:
Flexible employment: contracts that allow non-core workers to be called in. Or, not employed as demand conditions changes Flexible and adaptable machinery: computer controlled that can be quickly switched from one design to another Flexible and multi-skilled workers: they can perform different jobs on different product ranges.
What is flow production?
Flow production is also known as process production which involves continuous production of a single product. Used for homogenous products. For example; steel production, oil extraction, and natural gas
What are quality circles?
Groups of employees who meet regularly to discuss ways of resolving problems and improving production and quality in their department/organization.
What about company history?
If a company has been in an area for a long time, it may make sense to just stay there. Because, relationships with suppliers will already be established, the company's workforce will be experienced and local customers may have developed brand loyalty
What about labour costs?
If production is labour intensive, it may make sense to move operations to a country that has a low minimum wage.
What is Job Production?
Job production is producing unique items that are tailored to meet the needs of individual customers. Businesses using the job production method provide highly specialized, unique products that fulfill exact customer requirements
Method of Lean Production: What is "Kanban"
Kanban regulates the supply of components in a factory through the use of a card system. It is a system of achieving just in time (JIT) production - The system requires planned monthly and weekly production schedules
What are the Factors Of Production and what are they spesifically
LAND: the actual piece of land (forest or sea or even natural resources like oil) LABOUR: Human effort (managers, employees and workers) CAPITAL: Money needed to open a business OR tools, machinery and equipment used by a business. ENTREPRENUERSHIP: a person who organizes the FOP and creates the G&S
How to calculate labour productivity and capital productivity
Labour Productivity: total output in a given time period --------------------------------------- Total workers employed Capital Productivity: output -------------------- capital employed
What are intellectual property rights?
Legal property rights over the possession and use of intellectual property
What conditions are necessary for continuous improvement and kaizen groups to operate?
Management culture must be directed towards involving staff and giving their views and ideas importance Team working - suggesting and discussing new ideas to improve quality or productivity is best done in groups. Empowerment - giving each kaizen group the power to take decisions regarding workplace improvements allows the speedier introduction of new ideas and motivates employees to come up with even more ideas (Job enrichment) - can be linked with Herzberg on job enrichment. All employees should be involved
What is Mass Production?
Mass production is highly capital intensive as it uses machinery relative to workers. It involves production lines where workers remain at a single station. performing the same task over and over again. For example, consumer electronics, children's toys. or car components.
Exam Tips
Question to ask when making for or make or buy decisions: - Is the supplier reliable? - Will the quality be as good? - will the supplier increase prices once the firm has closed down on its own production capabillity?
Define intellectual property
Refers to the creation of the mind such as inventions, literary and artistic works and symbols, names, images and designs used in business
What is OFFSHORING?
Relocation of a business function to another country
Explain Social Sustainability
Social Sustainability is the ability of a business to not only meet the needs of its current stakeholders, but also to support the needs of future generations of stakeholders. - A business can meet the needs of its internal stakeholder such as workers, employees and managers by adopting Maslow's pyramid of needs.
What about government assistance?
Sometimes, governments will offer grants to companies to relocate to an area of high unemployment. This support can be in the form of free land, favorable tax, or subsidies
Define Lean Production
producing goods and services efficiently with the minimum of waste resources while maintaining high quality. - Lean means cutting out anything in the production process that adds complexity, cost and time, and does not add value to the customer.
EXAM TIP
quality must be explained in reference to the expectations of the target market consumers. The level of quality selected by any business must be based on the resources available to it, the needs of the target market and the quality standards of competitors.