2.3 - Making Operational Decisions

Question 1

State the inputs a business uses to produce products

Answer 1

Labour
Capital
Materials

Question 2

State the three main types of production process

Answer 2

Job
Batch
Flow

Question 3

Describe job production process

Answer 3

• one product at a time
• used for making one-off bespoke products where each item is different
• requires highly skilled workforce and low level automation
• takes longer to produce than other production process
• high profit margin ( customised producers expensive )
• Common in construction industry

Question 4

Advantage of job production process

Answer 4

• highly flexible - more likely to meet customer requirements , good for maintaining positive relationship with customers
• high profit margin

Question 5

Disadvantage of job production process

Answer 5

• requires highly trained employees , hard to find
• high skilled workers may demand for higher wages
• unlikely to achieve economies of scale , cost will be much higher than buying same materials in bulk

Question 6

Describe batch production process

Answer 6

Allows a business to produce products in relatively charge production runs , with some of the work being done using automation

Question 7

Advantage of batch production process

Answer 7

• business flexible as it can adjust ingredients and materials to produce varieties of products
• allows business to get benefits from reduced costs through production on larger scale

Question 8

Disadvantage of batch production process

Answer 8

• downtime between batches where a business rate of production falls
• difficult to anticipate demand , wastage of products from overproducing products or lose sales by failing to produce enough

Question 9

What is a flow production process ?

Answer 9

Standardised product is produced on large scale , involves high degree of automation
- known as mass production

Question 10

Advantage of flow production process

Answer 10

• products made and sold in large quantities , benefit of economies of scale and a low cost production per product
• price more competitively
• involves low skilled workers , paid lower salaries

Question 11

Disadvantage of flow process

Answer 11

• initial cost of machinery and robotics is high

- no flexibility

Question 12

Advantage of just in time stock control

Answer 12

• increase efficiency
• decrease waste ( reduces potential for damaged or misplaced stocks )
• reduces the need for business to hold expensive stock, more cash available for other costs

Question 13

Disadvantage of just in time stock control

Answer 13

• has to able to forecast customer demand accurately , if it fails it could result in unhappy customers = bad reputation
• must have very good relationship with supplier

Question 14

What the two ways quality of a product/ service can be assured ?

Answer 14

• quality control

- quality assurance

Question 15

What is quality control ?

Answer 15

• process of checking the standard of products quality at end of production process