2.3 Operational decisions

Question 1

What are the benefits of technology in production?

Answer 1

• Consistency in quality
• Reduction in waste, less mistakes
• Increased productivity
• Higher customer satisfaction
• Cost efficient with lower labour cost per unit
• Safer working environment - less people
  -flexibility

Question 2

What are the drawbacks of technology in production?

Answer 2

• Initial costs expensive
• Breakdowns problematic, loss of time
• Machines need downtime to prevent breakdowns
• Waste of capacity if machine output not needed

Question 3

What is CAD?

Answer 3

Computer aided design

Question 4

What is CAM?

Answer 4

Computer aided manufacturing

Question 5

What is mass customisation?

Answer 5

Mass of flow production but outcome tailored to consumer

Question 6

What is job production?

Answer 6

Method of production whereby a product is produced that meets specific customer requirements e.g customised cake

Question 7

What are the advantages of job production?

Answer 7

• Can be tailored to customer wants
• Can charge more
• Higher quality
• Greater job satisfaction

Question 8

What are the disadvantages of job production?

Answer 8

• Higher quality = higher unit costs
• Only make limited amount
• Labour intensive
• Requires skilled employees
• Time consuming

Question 9

What is batch production?

Answer 9

Making groups of identical items together. The products will be similar but slightly different e.g colour, size

Question 10

What are the advantages of batch production?

Answer 10

• A variety of products can be manufactured to satisfy customer needs
• Lower unit costs than job production
• Use of specialist machinery and skills increase output and productivity

Question 11

What are the disadvantages of batch production?

Answer 11

• Could be de-motivating as more repetitive compared to job
• Needs stocks of raw materials, impact cash flow
• Time lost switching batches, machinery may need resetting

Question 12

What is flow production?

Answer 12

The continuous movement of items through flow production process, using production lines to manufacture products

Question 13

What are the advantages of flow production?

Answer 13

• Produced on larger scale
• Less labour intensive
• Workers can specialise, more efficient
• Production lines can operate 24/7
• Consistent, standard quality
• Lower unit costs than job/batch

Question 14

What are the disadvantages of flow production?

Answer 14

• Production can be inflexible due to machinery
• Job repetitive for staff - lower motivation
• Initial purchase/set up costs high
• Breakdowns result in downtimes
• Less skilled workers required
• Products may be similar to rivals, competitive on price

Question 15

What is Just in time stock control?

Answer 15

Minimum amount of stock of raw materials and finished goods held by business

Question 16

What are the advantages of JIT?

Answer 16

• Stock levels kept minimum
• Reduced storage and costs e.g insurance and rent
• Less waste
• Improved cash flow

Question 17

What are the disadvantages of JIT?

Answer 17

• Reliant on good relationship with supplier
• Vulnerable to transport distruptions
• Careful planning required
• Benefits from bulk buying lost
• More paperwork as more orders placed

Question 18

What is Just in case stock control?

Answer 18

When the business holds buffer stocks of raw materials just in case there’s a problem with deliveries or unexpected demand

Question 19

What are the benefits of JIC?

Answer 19

• Stock always available for re-working faulty or sudden demand
• Production less reliant on suppliers so no delay if stock not delivered on time
• Spare products available for unexpected orders - increase customer service
• Economies of scale possible - bulk buy

Question 20

What are the drawbacks of JIC?

Answer 20

• Higher stock holding needs storage which increases rent and insurance
• Money tied up in stock unavailable for other purposes
• Stock might go out of date or become damaged