(2.4) Resource Management Flashcards
What is production?
When resources are changed into products
What is job production with an example?
When a business produces a one off bespoke item for a customer
E.g. weddings
What are the advantages and disadvantages of job production?
+High level of quality
+Meets customers requirements
+Can charge higher prices
- Higher costs
- Lower levels of output
- Skilled labour is expensive
What is flow production with examples?
Producing identical products on a mass scale
E.g. tooth brushes, toothpaste
What are the advantages and disadvantages of flow production?
+Very low unit cost
+Out put can be produced quickly
- Huge start up costs
- low motivation for workers
What is cell production with an example?
Multiple groups of people work on a single project
E.g.
What are the advantages and disadvantages of cell production?
+Workers become multi-skilled
-Potential rivalry between different cells. Conflict may arise if one cell is left to wait
What is batch production with examples?
Producing a group of identical products
E.g. bread, furniture
What are the advantages and disadvantages of batch production?
+can be changed to meet of the demand
+can be mechanised for certain objects
+Employees can become really good at their jobs
- Higher unit costs
- Mistakes can be catastrophic
- Workers may be demotivated with repetitive tasks
What is productivity?
The relationship between input and outputs in the economy.
What factors affect productivity?
Education and training Motivation of workers Labour flexibility Capital productivity Investments in new technology
What is the link between productivity and competitiveness?
If your firm is more productive it can help reduce unit costs. This could lead to competitive pricing
What is the formula for labour productivity?
Output/ No. of employees
What is the formula for capital productivity?
Output/ capital Employed
What is efficiency?
Making the best use of all a business’s recourses
What are some factors that may increase efficiency within a business?
Outsourcing Relocating Downsizing Delayering Investing in new technology Lean production Kaizen JIT Production
What is the difference between labour and capital intensive production?
Labour Intensive - Intensive production relies mainly on labour
Eg ready meals, hairdressing
Capital intensive - Intensive production relies mainly on capital
Eg airports, car manufacturing
What is labour intensive?
A process that requires a large amount of labour to produce its goods or services.
What is capital intensive production?
A process that require large amounts of investment to produce a good or service, therefore, having a high percentage of fixed assets, such as property, plant, and equipment (PP&E).
What is capital utilisation?
The use that a business makes of its resources
What is the formula for capacity utilisation?
(Current output / maximum Possible Output) * 100
What are the advantages and disadvantages of under-utilisation?
+Allows the business to cope with sudden increase in demand
+Workers won’t be over worked
- Fixed costs can be high
- Business won’t be making the most of its resources
- Workers may feel insecure in their jobs
What are the advantages and disadvantages of over-utilisation?
+Lower average costs
+Staff may feel they have a secure job
+Potential opportunities for overtime
- Over worked workforce
- Unable to respond to increased demand
- May not have free time (FST)
What are the ways of improving capacity utilisation?
Increased sales - Promote to encourage sales
Increased usage - Eg train companies are busy during peak hours and less busy during off peak hours
Outsourcing -
Redeployment- employees getting new job roles in the same company
What is mothballing?
Leaving machines, equipment or building space unused but maintained which can be brought back into use if necessary
What is excess or surplus capacity?
When a business has too many resources like labour and capital
What is rationalisation?
Reducing the number of resources (like labour and capital) put into the production process. Usually done because the business has excess capacity.
What is stock?
The materials required to produce the goods or service for a customer
What is buffer stock?
The minimum amount of stock you need so that you have enough if needed to produce the goods or service
What are the implications of having have too much stock?
- Opportunity cost
- Cash flow
- Increased storage costs
- Increased wastage
What are the implications of having have too little stock?
- Lost customers
- Employees may feel unsecure within their jobs
What is just in time (JIT)?
A system where no buffer stock is hold as raw materials are delivered when they are required
What is waste?
The loss of resources within the production or service process
What are the competitive advantages from lean production?
- Raises in productivity
- Reduces costs and cuts lead times
- Reduced defective products
- Improves reliability and speeds up design time
What is quality?
Meeting or exceeding the requirements of customers
What is quality control?
The process of trying to catch defective goods from being sent to customers
What is quality assurance?
Measures the business introduces to try prevent defects from occurring
What is total quality management (TQM)?
A process that aims to eliminate all errors in the production process
What does the kaizen approach involve and the advantages and disadvantages?
Continuous small improvements to the business
+Easier to implement
+People are less likely to resist the changes
What does the Traditional approach (change) involve and the advantages and disadvantages?
Infrequent change that is usually significant change
+
+
What are the advantages and disadvantages of total quality management?
+Improves efficiency
+May improve overall quality
+May enhance the brand as they’ll be more reliable
- High upfront cost (new machinery)
- Training staff can be costly
- Managers may lack confidence
What are the competitive advantages from quality management?
-Having high quality goods or service can allows the business to charge premium prices (however quality is subjective)
