Meeting Customer Needs

Revision for Unit 3 Business Studies: Meeting Customer Needs =]  <3 xxxx :P

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What is the point of 'design'?
Helps a product stand out from its competitors.
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What are the 3 variables that make up the 'Design Mix'?
Function, Cost of Production (Economics) and Appearance (Aesthetics).
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What is the meaning of 'function'?
How a product works and if it does what its supposed to do.
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True or False. The more expensive the cost of producing is the better.
False. The cheaper the cost of producing is the better.
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The cost of producing has decreased. What could this mean for the manufacturer?
There will be more consumers since more of the item is able to be made.
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Why is it not always good to have costs as low as possible?
The product might not be of good quality.
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Why might stylish, elegant and beautiful products be more likely to sell well than products with no style?
People might assume that the product is of low quality if it isn't stylish.
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What is 'stock'?
Materials that the business has bought waiting to be used to make a good; can also be semi-finished or completed goods not yet sold or awaiting sale.
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Why is stock control important for a business?
Helps maintain production and sales.
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True or False. If too much raw material is bought, it leaves the business unable to meet demand.
False. If too much raw material is bought it means tied up capital.
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What happens if too little raw material is bought?
It leaves the business unable to meet demand.
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What's wrong if a firm keeps too much stock?
No where to store it all, company might run out of space, demand for the product could decrease since it might go out of fashion, or it's possible that it could break.
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What's wrong if the firm keeps to little stock?
Could run out of stock whislt the demand for the product is still high causing a loss of sales and therefore, a loss of cusotmers.
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How can the costs of stock become a liability (issue)?
Stock may go off/ deteriorate if kept for too long; changing tastes and fashion may leave the business with stock it can't sell; loss of capital until goods are sold; costs money to store stock- space and insurance
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What are the consequences of a business running out of stock?
Loss of production- may reduce revenue; lost sales
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What is a commercial Economy of Scale?
Buying in large quantities (buying in bulk)
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How can bulk-buying be beneficial?
Firm can negotiate special prices which are lower than buying in small quantities- results in lower costs for business.
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How does a business decide how much to stock?
Works out max. stock it can afford to keep and a min. amount essential for continued production. Firm also needs to know a re-order level that takes account of the time needed for delivery.
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What is 'LEAD TIME'?
The time lag between ordering and delivery.
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What is 'Just In Time'?
Making only what is needed, when it's needed, and in the amount needed.
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True or False. 'Just In Time' overcomes problems of having too much stock.
True. 'Just In Time' does overcome problems of having too much stock.
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What problems does 'Just In Time' create?
Suppliers might not be on time; Company might not have calculated stock level properly causing the suppliers to deliver at the wrong time.
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What are 'stock takes'?
Counting up all the stock available and checking levels against their max. and min. levels.
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How do businesses keep track of their stock?
By doing 'stock takes'. This can be done manually buti f there's a high enough level of sales, the business may invest in computer technology to help them monitor stock levels.
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What sort of technology is used to help keep track of stock levels?
Barcode scanner- measures stock levels for any product scanned; reciepts- records stock levels from any product bought.
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What is the meaning of 'Quality Control'?
Inspecting and testing quality at various points of the production process.
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What is the meaning of 'Quality Assurance'?
An orginisation-wide approach to make quality the responsibility of all workers in the company.
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Who carries out 'inspection'?
Quality Control Workers
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What happens to faulty goods?
They're rejected
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True or False. Inspection is seen as a cheap process.
False. Inspection is seen as an expensive process as faults could have been highlighted earlier and corrected.
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True or False. The whole manufacturing time has been wasted as goods aren't checked till the end.
True. The whole manufacturing time has been wasted as goods aren't checked till the end.
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True or False. Labour costs are lower as specific workers aren't dedicated enough to inspecting goods.
False. Labour costs are higher as specific workers are dedicated to inspecting goods.
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What does 'Total Quality Management' (TQM) identify?
Quality is the responsibilty of all production workers.
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True or False. There should be 50% defects as all the problems aren't identified at the time.
False. There should be 0% defects as all problems are identified at the time.
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What are all the employees empowered to do?
Take action to maintain quality.
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What is encouraged so workers share skills and experience?
Teamwork and training
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What is done to ensure high standards are constant?
Good production procedures are followed and constantly followed to ensure high standards are constant.
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What are 'Quality Circles'?
Small groups of workers (5-20) who meet reguarly to study and solve efficiency problems within the business.
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What do 'Quality Circles' allow the workforce to do?
Directly improve the nature of the work they do.
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What are 'Quality Circles' intended to do?
Improve efficiency and motivate the workforce through involvement.
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True or False. Quality Circles are becoming more popular in Britain.
True. Quality Circles are becoming more popular in Britain.
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Where are 'Quality Circles' originated from?
America but they gained popularity through Japanese companies.
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What is 'ISO9000'?
A recognised quality control mark which was set by an independent body.
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What does the 'International Standards Orginisation' (ISO) do?
Assess and monitor standards of company's products.
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What do companies do to meet the 'ISO' standards?
They have all their quality control procedures examined; They have to publish a detailed manual of their procedures; They'll show what procedures they have in place to guarantee quality from start to finish.
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What is meant by 'Benchmarking'?
When companies measure their own performance against one of their competitors.
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The following steps for 'Benchmarking' are....
Identify a suitable competitor to 'benchmark' against; Measure performance in a number of key areas such as wastage and production lead-times; Improve areas where the competitor is doing better; Re-measure performance to see if the gap is closed.
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What is meant by 'Customer Service'?
The experience that a customer gets when dealing with a business and the extent to which that experience meets and exceeds customer needs and expectations.
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What is 'Effective Customer Service'?
Providing customers with the service level that they want, when they want it.
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What can good 'Customer Service' lead to?
Repeat purchasing and a good reputation.
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Providing good 'Customer Service' involves....
Meeting the needs of customers; Quality; On time service; Innovation; Collaboration; Spotting problems; Listening to customers; Dealing with complaints; Staff training; Going beyond what is expected.
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In the UK, what are the two types of law that protect the consumer?
Sale of Goods Act and Trade Description Act
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What is the 'Sale of Goods Act'?
Gives consumers rights to compensation if a product bought isn't of merchantable quality, not as described or not fit for purpose; when a business sells a product, a contract is established between the seller and buyer.
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What is meant by 'Match the Description'?
Goods must match the description given to them. E.g2, If the label says leather then the product must be leather
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What is meant by 'Merchantable Quality'?
Goods sold need to be of a certain standard. E.g, clothing should be properly stitched, no holes, seams etc..
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What is meant by 'Fit for Purpose'?
Products must do what they're expected todo. E.g, Shoes should be able to be worn without feet getting wet.
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What is the 'Trade Descriptions Act'?
Makes businesses liable for prosecution and fines if products are sold in a misleading way.
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There are many things that go against the 'Trade Descriptions Act'. What are they?
Giving false info; Failing to give important info; Acting aggresively- telling children to get their parents to buy a product; garage doing work on a car that hasn't been agreed by the customer
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What is the reason behind 'Consumer Protection'?
To stop consumers from being exploited by businesses who are looking to max. profits through unethical/ illegal means
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What do large businesses do because of the law?
Employ their own legal experts.
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What do smaller businesses do because of the law?
Have to geT info. from relevant publications and Government Departments who will provide advice.
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True or False. Having to give refunds is fairly cheap for a business.
False. Having to give refunds is costly for a business.
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Why are 'compliance costs' heavy in the food industry?
There are very strict regulations for the storage, prep. and handling of food.
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How can following the law benefit a business?
It can gain a rep. as looking after their customers and giving value for money.
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How can disobeying the law damage a business?
A lot of neg. publicity could cause a business to end up with a damaged rep.
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What does 'Kaizen' mean?
A Japanese word meaning 'change for the better'/ 'continuous improvement'.
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What does 'Kaizen' aim to do?
Eliminate waste, and reduce both the time and the costs of production
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What is 'productivity'?
Output per worker
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What does 'productivity' measure?
How much each worker produces over a period of time.
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Productivity = .....
Total output/ Number of workers
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How can 'productivity' be increased?
Investing in up-to-date machinery; Training; Coming up with new ways to work more effectively.
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Improving productivity can....
Reduce a business' costs and make them more competitive.
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A business needs to cut costs to....
Maximize profits
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What are other ways a business can cut costs?
Improved purchasing; Relocation; Better design; Cutting overhead costs
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Other cards in this set

Card 2

Front

What are the 3 variables that make up the 'Design Mix'?

Back

Function, Cost of Production (Economics) and Appearance (Aesthetics).

Card 3

Front

What is the meaning of 'function'?

Back

Preview of the front of card 3

Card 4

Front

True or False. The more expensive the cost of producing is the better.

Back

Preview of the front of card 4

Card 5

Front

The cost of producing has decreased. What could this mean for the manufacturer?

Back

Preview of the front of card 5
View more cards

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