business operations

• Healthy premises


  • Ventilation, good lighting, indoor temp attest 16°C
  • Health and safety training
• Health and Safety Executive (HSE)


  The body which has the responsibility for enforcing health and safety legislation
• Role of the HSE


  1. Provides support and guidance on health and safety matters

  2. Controls risks to people's health and safety arising from work activities

  3. Regulates health and safety legislation in NI

  4. Promotes and enforces health and safety standards

  5. Improves health and safety standards through inspection
• The Executive shares responsibility with local councils, depending on the issue
• It also conducts research into the working and effectiveness of regulations, advising government after consultation with both employers and employees
• Production


  The creation of either goods or services
• Types of production


  • Primary
  • Secondary
  • Tertiary
• Primary industry


  Sourcing of raw materials from the ground or from the sea, using the earth's resources to grow items such as crops, fruit, flowers and trees
• Secondary industry


  Takes the raw materials produced by the primary industries and works on it to manufacture finished goods
• Tertiary industry


  Provides services to all other industries and members of the public, including commercial services such as banking, marketing and insurance, and professional services such as entertainment, hospitality, education and legal, religious and medical services
• The recent trend in employment is to move away from the primary and secondary sector towards employment in the tertiary sector
• The service sector is the fastest growing sector of production at present
• De-industrialisation


  The trend of moving away from the primary and secondary sector towards the tertiary sector
• Job manufacturing


  One item is produced individually and is often handmade, completed at a time to the customer's specification
• Batch manufacturing


  Several of the same product are made at a time, with all the items in a batch being the same
• Goods made by batch manufacturing

  • Newspapers
  • Bread
  • Clothing
  • Furniture
  • Motor car components
  • Books
  • Building of housing estates
• Flow manufacturing


  One product is made continuously and in large numbers on an assembly line
• Goods made by flow manufacturing

  • Motor vehicles
  • Machinery
  • Televisions
  • Inexpensive clothing
  • Toys
• Process manufacturing


  Involves the combination of ingredients according to a formula or recipe that cannot be broken down into the ingredients.
• Goods made by process manufacturing

  • Chemicals
  • Food and beverages
  • Petrol
  • Paint
  • Pharmaceuticals
  • Cosmetics
• Specialisation


  When an employee concentrates on and does one particular operation all the time, or when a country concentrates on making one particular type of goods
• Types of specialisation


  • Product
  • Process
  • Function
  • Country
• Division of labour


  The manufacture of a product is divided into a number of stages, with each employee given a single task
• Division of labour


  Product is divided into a number of stages and each employee is given a single task eg on a car production line this could mean fitting one component continually, or in Tayto basing potato crisps continually
• Advantages of division of labour

  • Each worker becomes specialised at their task-leads to higher quality
  • Less wastage which reduces costs for the business
• Disadvantages of division of labour

  • The work can be very repetitive-this leads to boredom which may result in accidents which can prove costly for the business
  • Workers have to be trained for only one small task-lengthy training is therefore avoided which reduces costs for the business as employees do not need long periods of time out of work
  • It is difficult for employees to have pride in their work as they do not see the finished product this can lead to low levels of motivation and low morale-labour turnover may increase
  • Delays or strikes in one section can cause stoppages throughout the manufacturing-idle workers cost the business money
• As workers become specialised the work is faster-the costs per unit of manufacturing are reduced - lower costs can be reflected in lower prices customers attracted therefore sales and profits increase
• Inventory control


  Vitally important as organisations will not be able to function without a constant supply of raw materials, goods to sell in a retail shop, or inventory for use in making products
• In most modern businesses, stock control is done by computer. Details of items in stock are held in the system As goods are sold their barcodes are recorded at the cash desk and those items are electronically deducted from the number in stock. When the computer records that the stock levels of particular items are low, those goods are automatically re-ordered.
• Advantages of a computerised inventory control system

  • The business can see at any time how much stock they have
  • The business can check how particular items are selling compared to others
• Effects of good inventory control

  • Improve efficiency because manufacturing will be constant
  • Enable the business to always meet demand
  • Give the business a competitive edge over other businesses
  • Ensure that capital is not lying idle
• Effects of poor inventory control

  • Mean that consumer demands cannot be met
  • Lose business
  • Require extra warehouse space
  • Risk some perishable goods going out of date
  • Use finance inefficiently
• Minimum inventory level method


  A simple method where the business works out the minimum amount of inventory with which it can function inventory is reordered when that minimum level is reached
• Benefits of minimum inventory level method

  • Capital which would otherwise be tied up in stocks can be used elsewhere
  • Wastage reduced
  • No high storage costs
• Drawbacks of minimum inventory level method

  • Delay between ordering the goods and having them delivered. This holds up production
  • Consumers may go to competitors
• Batch inventory control method

  This method is used in industries that make products in vats and tanks and is associated with process manufacturing rather than industries that make products in a continuous flow. It calculates the value of the inventory held and available for manufacturing
• Benefits of batch inventory control method

  • Helps to keep costs down as the firm only needs to purchase the raw materials and components needed to satisfy the demands of an individual batch
• Drawbacks of batch inventory control method

  • If any of the inventory is damaged, there is no surplus. This may impact the production of the next batch
• First in First Out (FIFO) inventory control


  This method is based on selling the oldest inventory first and telling or using inventory in rotation. This method accurately assigns costs to inventory as the oldest goods bought may be less expensive
• Benefits of FIFO


  • Older items generally tend to carry a lower cost than the items purchased more recently, due to potential price increases. This will result in a higher profit if such items are sold
  • FIFO cuts down waste dramatically by ensuring items are moved out before they became obsolete