Business Operations

• Buffer stock


  A stock of raw materials held in reserve to protect the production process from unforeseen shortages.
• Customer loyalty


  The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmes.
• Customer satisfaction


  Whether customers are pleased with the goods/services they receive; whether they would purchase again.
• Flow production


  Using a production line to make goods continuously and in large numbers.
• Inspection


  Testing/examining items to check that materials or items conform to the specified requirements/standards.
• Job production


  A method of creating a single product to meet an individual order.
• Just in case (JIC)


  Organising procurement to ensure that the production process never runs out of stock, reducing the number of sales lost due to insufficient raw materials.
• Just in time (JIT)


  Organising the ordering of raw materials and components to be delivered just before they will be used, reducing the need for storage.
• Lean production


  Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.
• Logistics


  Managing the movement of supplies and products to ensure the timely delivery of supplies to the production process and finished products to customers.
• Management


  Organising and coordinating business activities in order to fulfill production and meet the business' objectives.
• Procurement


  The process of buying goods and services including dealing with, demand, selection of suppliers, analysing and negotiating prices, making the purchase & managing payments.
• Product knowledge


  An in-depth understanding of the features, use and application of the good/service that will enable the person selling it to provide any information that

  the purchaser wants before committing to buy.
• Product recalls


  The withdrawal from sale by the manufacturer of a defective or contaminated item.
• Productivity


  The amount produced by a worker/machine/factory in a given time; the ability to

  produce more output with fewer resources.
• Purchasing


  The business buys the goods and services that it needs for producing the goods

  it sells or for delivering the services it sells.
• Raw materials


  Businesses that use raw materials that are heavy and/or bulky choose to locate

  close to their suppliers to reduce the cost of transport or storage.
• Supplier


  A business that provides goods/services.
• Supply chain


  The network of organisations, people, activities, information and resources that

  take the product/service from supplier to customer.
• Total quality management (TQM)


  A philosophy that involves everyone in the business in the quest for continual

  improvement in the attitudes, practices, structures and systems that combine to

  create a top-quality product.
• Unit cost


  The average cost of each unit. Unit cost = total cost ÷ quantity
• Specialisation


  Occurs when individuals focus on a limited number of tasks.
• Kaizen


  An approach to production that aims to achieve change from a series of small steps.
• Purchasing Economies of Scale


  Occurs when the cost per unit falls if large orders are placed with suppliers due to a bulk discount.
• Customer Service


  Part of a business's activities that are concerned with meeting customers' needs as fully as possible.
• After-Sales Service


  Meeting of customers needs after they have purchased the product. For example by repairing or servicing the product.
• M-Commerce


  The buying and selling of products through wireless handheld devices such as smartphones.
• Total Quality Management (TQM)


  A strategy that aims to make quality the responsibility of every employee in a firm, to make sure the quality remains consistent