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Business Theme 2 Managing business activities > 2.4 Resource management > Flashcards

2.4 Resource management Flashcards

1
Q

Describe Job production

A

-One off individual item
-Normally made to customers personal specifications
-Often undertaken by small specialist businesses
-E.g Wedding cake designers

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2
Q

Advantages of job production

A

-Skilled staff
-High quality
-Can usually charge a higher price

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3
Q

Disadvantages of job production

A

-Individual cots of one unit may be high
-High labour costs
-Productivity tends to be low
-Slow production

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4
Q

Describe batch production

A

-Similar items produced together
-Firms can start investing in specialist machinery
-E.g Bakery, Clothing maurfactur

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5
Q

Advantages of batch production

A

-Cost saving through buying in bulk
-Products worked on by specialist staff/equipment at each stage
-Productivity increases
-More products can be made

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6
Q

Disadvantages of batch production

A

-Tasks may become boring reducing motivation
-Firm may need to invest in specialist equipment
-Money tied up in stock

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7
Q

Describe flow production

A

-Standardises, identical products are produced on an assembly line
-E.g Coke cans

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8
Q

Advantages of flow production

A

-Economies of scale
-Rapid production
-Capital intensive, automated, constant
-Low unit costs

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9
Q

Disadvantages of flow production

A

-Reliant on machinery
-Less differentiation for customers
-Production is shut down if flow is stopped

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10
Q

Describe cell production

A

-Where work is organised into teams
-Teams given part of a production process

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11
Q

Define efficiency

A

Ability of a business to use its production resources as cost-effectively as possible

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12
Q

Average cost per unit formula

A

Total production costs/ Total number of units

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13
Q

Way to improve productivity

A

-Train staff
-Improved motivation
-More/better equipment
-Improved organisation

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14
Q

Define labour intensive

A

Production relies on using physical labour

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15
Q

Define capital intensive

A

Production relies on using machinery & technology

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16
Q

Implication for Labour intensive work

A

-Delivery of services usually more labour intensive
-In countries with low labour costs labour intensive production is common
-Small scale production likely labour intensive

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17
Q

Implications for capital intensive work

A

-Large scale production of standardised products
-Manufacturing in countries with high labour costs likely to use capital intensive

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18
Q

Benefits of labour intensity

A

-Low cost production
-Labour is a flexible
-Opportunities to be creative

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19
Q

Drawbacks of labour intensity

A

-Costs of labour turnover
-Need for training
-Incentives needed to motivate staff
-Staff can be unreliable

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20
Q

Benefits of Capital intensity

A

-Economies of scale
-Machines can run without breaks
-Better quality & speed
-Machines consistent and precise

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21
Q

Drawbacks of Capital intensity

A

-Significant investment & maintenance costs
-May generate resistance to change from labour force
-Breakdowns delay production
-May not provide flexibility

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22
Q

Define capacity

A

A measure of how much output it can achieve in a given period if all resources are used to their full potential

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23
Q

Define capacity utilisation

A

the proportion of a business’ capacity that is actually being used over a specific period

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24
Q

Capacity utilisation formula

A

Actual level of output / maximum possible output x100

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25
Why does capacity utilisation matter
-Useful measure of productive efficiency, measures whether there are unused resources in the business
26
What percentage CU do most businesses aim for?
85-95%
27
What does having a CU of 85-95% allow
-Allows them to have some spare capacity to meet sudden increases in demand -Ability to maintain and service machinery
28
What is under-utilisation?
Where a firm is nit using all of their existing recourses to full potential so likely to have increased unit costs
29
what is over utilisation
Working to an excessive level
30
Problems working at high capacity?
-Business may not have flexibility to respond to new orders -Staff under pressure to produce lots -Machines may be pushed to limit so breakdown
31
Factors affecting how much stock to re-order?
-Lead time from the supplier -Prohibit stockouts -Demand for product
32
Advantages of high stock levels
-Production fully supplied -Potential for lower unit costs by ordering in bulk -Less likelihood of “stock-outs” -Better be able to handle unexpected changes in demand
33
Define Just in time
Stock required for production arrives just as it is needed
34
Define lean production
Minimal capital tied up in stocks, minimal resources used in production
35
Why is quality important to businesses?
-Markets are highly competitive -If a business develops a reputation for high quality then it may be able to create an advantage over its competitors -Higher product is likely to win against lower quality
36
Define quality control
based on inspection at end of production process
37
Quality assurance
Inspecting quality throughout production process
38
Define Total quality management
Quality is at the core of the business every worker is responsible for quality
39
Advantages of TQM
-Puts customers at heart of production -Motivational, workers feel more involved -Less wasteful -Eliminates cost of inspection -Creates culture of constant improvements
40
Disadvantages of TQM
-All workers must be committed and receive significant training -Careful monitoring and control required
41
Kaizen
Continuous improvement, focussing on elimination of waste, requires long term commitment to change
42
Challenges of quality improvement
-Culture may need to change -High costs, training, new processes, information systems
43
Advantages of cell production
-More efficient -Motivation high as employees work as a team
44
Disadvantages of cell production
-Requires reorganisation -Efficiency reduced by weaker workers
45
Formula for labour productivity
Output per worker / Number of workers
46
Factors influencing productivity
-Employee motivation -Skills & training staff -Organisation & working practises -Investment in capital equipment
47
Factors influencing efficiency
-Standardisation in production process -Investment in capital equipment -Organisational restructuring
48
What does working under capacity do for a business?
-Provides flexibility -Opportunities to engage workers in maintenance tasks -Businesses can respond to sudden increases in demand
49
Benefits of operating at a high capacity
-Minimise average total costs & increase competitiveness -If workers busy likely to feel secure in employment -Businesses that are busy likely to be well thought of and likely to attract customers willing to wait for products to be delivered.
50
Ways to improve capacity utilisation
-Increase sales -Increase usage -Outsourcing Reduce capacity -Redeployment
51
Benefits of Just in Time
-Stock holding costs minimised -Close relationships developed with suppliers -Improved cash flow
52
Drawbacks of Just in Time
-Economies of scale not possible -Ability to respond to demand reduced -Unreliable suppliers can disrupt production
53
Define Maximum stock level
Maximum stock a business can hold
54
Define Re-order level
Level at which a business places a new order
55
Define Minimum stock level
Lowest level a business lets its stock fall to
56
Define Lead time
Length of time of stock being ordered to it being delivered.
57
Define Buffer stock
Quantity of goods kept incase of stock shortages - can provide competitive advantage over rivals unable to meet demand.
58
Advantages of buffer stock
-Stability in supply -Price stabilisation -Raw material security -Competitive advantage
59
Drawbacks of buffer stock
-Cost of holding stock -Risk of obsolescence -Opportunity cost
60
Why is waste common?
-Stock becomes obsolete -Perishable goods thrown away -Stock may be damaged
61
Ways to minimise waste
-For perishable items, refrigerate and careful stock rotations -Staff training & computer inventory management systems -Effective sales forecasting
62
How can lean production provide a competitive advantage?
-Lower unit costs achieved so prices may be lower than rivals -Better quality output due to reliable suppliers and carefully managed production.
63
Define Quality Circles
Groups of workers meet regularly to solve quality issues in production process
64
Advantages of Quality circles
-Workers motivated as involved in decision making -Relevant and focused solutions
65
Disadvantages of Quality circles
-Managers need to trust workers and solutions -Meetings must be organised regularly
66
Advantages of Quality control
-Specialists employed to check standards -Simple way to check quality
67
Disadvantages of Quality control
-Rejection of product is significant waste -Little focus on cause of defect
68
Advantages of Quality assurance
-Quality issues identified early on so product can be reworked and not rejected -Cause of defect is focus so quality issues can be prevented.
69
Disadvantages of Quality assurance
-Training & skilled labour force required so costs increase -Reworking products may lengthen process
70
Competitive advantages of Quality management
-Low unit costs through preventative approach -Increased finance available to fund marketing activity, improve brand recognition -Quality can be used in promotional activity as USP for business.

Business Theme 2 Managing business activities (6 decks)

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