2.3.1 Business Operations

Question 1

Production processes:

Answer 1

methods of businesses providing goods and/or services which are made to meet customer wants/needs and are produced to a high enough standard

Question 1

The purpose of business operations:

Answer 1

• to provide goods
• to provide services

Question 2

Job production:

Answer 2

when individual products are made one at a time to meet specific customer preferences

Question 3

Pro’s of job production:

Answer 3

• Employees may gain enjoyment from using their specialist skills
• High profit margins for bespoke products
• Focus on customer needs and individual service
• Can customise orders
• Workers involved in entire production process from start to finish

Question 4

Con’s of job production:

Answer 4

• Highly skilled staff are required, which increases costs
• Highly skilled staff may not be available, which can make training staff/recruiting staff very expensive
• Longer production process - longer time
• Investment in machinery may be higher as specialist equipment may be needed
• Production costs likely to be high – economies of scale

Question 5

Batch production:

Answer 5

batch production involves making a set quantity of identical products

Question 6

Pro’s of batch production:

Answer 6

• Can produce larger volume of products than job production
• Can be partially automated
• Able to make a variety of sizes or flavours
• Allows some flexibility in production
• Inventories of part-finished goods can be stored and completed later

Question 7

Con’s of batch production

Answer 7

• As batch production is not fully automated, costs may be higher than in flow production
• Not as flexible regarding customers’ tastes as job production
• Making many small batches can be expensive
• If production runs are different there may be additional costs and delays in preparing equipment
• Productivity reduced when switching between batches
• Semi-skilled workers

Question 8

Flow production:

Answer 8

• involves continuously making identical products
• this allows the production process to be heavily automated

Question 9

Pro’s of flow production:

Answer 9

• Able to make far larger quantities
• High volumes and low margins (with high productivity)
• Consistency in production means products are identical, which means customers know exactly what they are buying - standardised production
• Highly automated process – automated assembly lines saves time and can decrease costs
• Economies of scale can be achieved as cost per unit will be low
• Quality systems can be built into the production at each stage
• Lower skilled workforce required - lower costs

Question 10

Con’s of flow production:

Answer 10

• In competitive markets for similar mass-produced goods, profit margins can be very low
• Customers like products that are tailored to their specific preferences - flow production can’t do this
• High initial set-up costs of automated assembly lines – high costs to buy machinery
• Standardised product produced
• Workers may find work repetitive and boring

Question 11

Impact of different types of production:

Answer 11

keeping productivity up and costs down and allowing for competitive prices

Question 12

How can a business improve productivity?

Answer 12

• Investing in up-to-date machinery – this can help workers to produce more products in the same length of time - it can also reduce the need for employees by replacing them withautomatedmachinery
• Providing incentives to encourage workers to work harder and faster – there are several ways this can be achieved, such as throughpromotion opportunities or pay incentives
• Providing training to staff to improve their skills so they can work more efficiently - encouraging staff to come up with time-saving ideas that allow them to work more efficiently – many businesses have suggestion boxes where staff can provide ideas on how the business could operate better

Question 13

Impact of technology on operations:

Answer 13

• speeds up the production processes
• keeps businesses in touch with their customers
• faster production processes
• ensures fewer mistakes and defects
• can involve a costly initial development
• can quickly become obselete
• requires employees to be trained to use new technology

Question 14

Technology used in business operations:

Answer 14

• computer-aided design (CAD)
• supply chain management (SCM)
• geographical positioning systems (GPS)
• electronic point of sale (EPoS)
• 3D printing
• E-commerce

Question 15

Productivity:

Answer 15

• output per worker
• it measures how much each worker produces over a period of time

Question 16

How can productivity be improved?

Answer 16

productivity can be improved by increasing output or by lowering the costs of production (inputs) while maintaining output

Question 17

Economies of scale:

Answer 17

• the situation where average costs of production fall as the volume of production increases
• advantage as businesses grow in size

Question 18

How can technology impacts costs of production?

Answer 18

Technology costs money to purchase, but reduces the cost of producing products

Question 19

How can technology impact productivity in production?

Answer 19

• Using machinery to mechanise or automate parts of the production process leads to an increase in productivity
• This means a business can either reduce its prices to increase its competitiveness in a market or increase its profit margins

Question 20

How can technology impact quality in production?

Answer 20

• Businesses need to be consistent in the quality of the products they produce
• Mechanising or automating parts of production can help with this

Question 21

How can technology impact flexibility in production?

Answer 21

• Businesses often need to balance technology with human flexibility
• Automation is good for mass production but it doesn’t work so well for products that will be personalised to meet individual customers’ preferences