2.4 - Resource Management Flashcards
What are the 4 methods of production?
- Job production
- Batch production
- Flow production
- Cell production
What are the key features of job production ?
- One product made from start to finish
- Usually made to customers specification
- Often made by small specialist businesses
Advantages of job production?
- Higher quality (premium prices)
- Customer changes and requirements can be handled
- Motivated employees
- Flexible production method
Disadvantages of job production?
- Individual cost of single unit costly
- High labour costs
- Needs close consultation with clients
- Reliant on high skills
Key features of batch production?
- Similar items produced together
- Different batches
Advantages of batch production?
- Cost saving (bulk buy)
- Allows customers some choice
- Allows to work on unexpected orders
Disadvantages of batch production?
- Takes time to switch production to new batch
- Need to maintain high stock levels
- Reduced motivation (boring tasks)
- Size of batch is dependent on capacity
Key features of flow production?
- High volumes of same product
- Product moves continuously through production process
Advantages of flow production?
- Cost per unit reduces (bulk buy)
- Suitable for large quantities
- Capital intensive (24/7 work)
- Requires less training
Disadvantages of flow production?
- Long set up time & needs high quality machinery
- Less differentiation for customer
- Production stopped if flow stops
Key features of cell production?
- Work organised into teams who work in a cell
Advantages of cell production?
- Productivity
- Increased motivation
- Specialist staff
Disadvantages of cell production?
- Long set up time
- Training takes time
- Needs good organisation
Factors that businesses use to decide on production methods.
- Target market
- Technology
- Resources
- Standards
What does productivity measure?
Measure the relationship between inputs into the production process and the resultant outputs.
E.g Output per machine
What is capacity utilisation?
What proportion of the maximum output that they are actually producing.
Why is capacity utilisation an important concept?
- Used as a measure of productive efficiency
- Average production costs tend to fall as output rises
Benefits of working at 100% capacity utilisation.
- More revenue
- Lower unit costs
Drawbacks of working at 100% capacity utilisation.
- Demotivated staff
- Can’t maintain machinery so could break down
- May be hard to meet new and unexpected orders
- Mistakes-pressure & labour turnover
- Less efficient if overcrowded
- Have to pay overtime
What is labour intensive?
A process that involves a large workforce or a large amount of work in relation to output.
What is capital intensive?
A process that involves large investments of money on things like automation.
Pros of labour intensive?
- Flexible resource (training & multi-skilled)
- Mainly variable costs
- Unit costs may be low in low-wage locations
Cons of labour intensive?
- Risk of problems with staff/employer
- Possible of high costs of labour turnover
- Costs of training
Pros of capital intensive?
- Economies of scale
- Better productivity
- Better quality and speed
- Lower labour costs
