2.3 Flashcards
Labour productivity =
Total output ÷ Number of Workers
What is productivity
Productivity assesses how efficient a business is by measuring how much output each worker produces over a period of time.
Unit cost =
total costs / total output
Impact of technology on production - lower costs
Initial costs of buying new machinery or robots will be expensive
However the business will soon make these costs back with the improvement in quality and reduction of wastage
Robots don’t need to be paid so the savings on wages will soon build-up
This is the process of using more capital intensive (machinery) work instead of labour (human) intensive work
Impact of technology on production – improvement in quality
Design used to be on paper, now with CAD (computer-aided design) designs can be completed on the computer and seen in 3D
Machinery and robots ensure there is no human error in production
Impact of technology on production – improvement in productivity
Robots and machines can work 24/7
They do not need breaks, lunch hours, time off or holidays
This will increase the productivity of a business producing products
Productivity is a measure of output per hour
Impact of technology on production – improvement in flexibility
Using CAM computer-aided manufacture means that a business can use computers to very precisely control, monitor and adjust tools in manufacturing
It also means that a business producing products can be more flexible and produce a wide variety of products
What is job production
Job production is where a single product is made at a time
Advantages of job production
Products made are high quality, which means higher prices can be charged
Bespoke, unique, one-off, to customers measurements or specifications e.g. a kitchen
Very motivated workers who can see one item made from start to finish
Motivated workers are normally more productive and have lower rates of absenteeism
Disadvantages of job production
Labour intensive - Skilled labour and craftsmen are expensive
Wide range of tools may be required
Production process can be slow - Time taken to produce product/service
What is batch production
Batch production is where small quantities of identical products are made
This is the production method used when a business wants to make more than one item at a time
Advantages of batch production
More flexibility because production/machines can be changed to meet customer needs or fluctuations in demand
Standard production of items means it can be mechanised with less labour involved than job production
Employees specialise so become good at their job
Disadvantages of batch production
Workers may be less motivated with repetitive work
Idle (waiting) time between batches needs to be managed as this is wastage because work stops while the machines are changed to make the next product
If one batch takes too long the other batches will all be held up too – slower process
What is flow production
Flow production uses production lines with continuous movements of items through the process.
Advantages of flow production
A business can make larger quantities which means they can bulk buy raw materials and save money (economies of scale)
Automated and computerised production means improved quality and more complex designs can be made in shorter times
As production is continuous, stocks of parts and raw materials don’t need to be held this means a business can use the JIT system – order when needed and not keeping a supply all the time
Disadvantages of flow production
High costs to buy the factory and machinery
This is a very capital intensive process (lots of machines)
Low motivation of staff due to repetitive tasks
Break downs and lost production can be costly
Very inflexible, hard to change the factory machinery to make different products, the production process will be set up to make just one item e.g. bottled cola
