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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
Q

Why does capacity utilisation matter

A

-Useful measure of productive efficiency, measures whether there are unused resources in the business

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26
Q

What percentage CU do most businesses aim for?

A

85-95%

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27
Q

What does having a CU of 85-95% allow

A

-Allows them to have some spare capacity to meet sudden increases in demand
-Ability to maintain and service machinery

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28
Q

What is under-utilisation?

A

Where a firm is nit using all of their existing recourses to full potential so likely to have increased unit costs

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29
Q

what is over utilisation

A

Working to an excessive level

30
Q

Problems working at high capacity?

A

-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
Q

Factors affecting how much stock to re-order?

A

-Lead time from the supplier
-Prohibit stockouts
-Demand for product

32
Q

Advantages of high stock levels

A

-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
Q

Define Just in time

A

Stock required for production arrives just as it is needed

34
Q

Define lean production

A

Minimal capital tied up in stocks, minimal resources used in production

35
Q

Why is quality important to businesses?

A

-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
Q

Define quality control

A

based on inspection at end of production process

37
Q

Quality assurance

A

Inspecting quality throughout production process

38
Q

Define Total quality management

A

Quality is at the core of the business every worker is responsible for quality

39
Q

Advantages of TQM

A

-Puts customers at heart of production -Motivational, workers feel more involved
-Less wasteful
-Eliminates cost of inspection
-Creates culture of constant improvements

40
Q

Disadvantages of TQM

A

-All workers must be committed and receive significant training
-Careful monitoring and control required

41
Q

Kaizen

A

Continuous improvement, focussing on elimination of waste, requires long term commitment to change

42
Q

Challenges of quality improvement

A

-Culture may need to change
-High costs, training, new processes, information systems

43
Q

Advantages of cell production

A

-More efficient
-Motivation high as employees work as a team

44
Q

Disadvantages of cell production

A

-Requires reorganisation
-Efficiency reduced by weaker workers

45
Q

Formula for labour productivity

A

Output per worker / Number of workers

46
Q

Factors influencing productivity

A

-Employee motivation
-Skills & training staff
-Organisation & working practises
-Investment in capital equipment

47
Q

Factors influencing efficiency

A

-Standardisation in production process
-Investment in capital equipment
-Organisational restructuring

48
Q

What does working under capacity do for a business?

A

-Provides flexibility
-Opportunities to engage workers in maintenance tasks
-Businesses can respond to sudden increases in demand

49
Q

Benefits of operating at a high capacity

A

-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
Q

Ways to improve capacity utilisation

A

-Increase sales
-Increase usage
-Outsourcing
Reduce capacity
-Redeployment

51
Q

Benefits of Just in Time

A

-Stock holding costs minimised
-Close relationships developed with suppliers
-Improved cash flow

52
Q

Drawbacks of Just in Time

A

-Economies of scale not possible
-Ability to respond to demand reduced
-Unreliable suppliers can disrupt production

53
Q

Define Maximum stock level

A

Maximum stock a business can hold

54
Q

Define Re-order level

A

Level at which a business places a new order

55
Q

Define Minimum stock level

A

Lowest level a business lets its stock fall to

56
Q

Define Lead time

A

Length of time of stock being ordered to it being delivered.

57
Q

Define Buffer stock

A

Quantity of goods kept incase of stock shortages - can provide competitive advantage over rivals unable to meet demand.

58
Q

Advantages of buffer stock

A

-Stability in supply
-Price stabilisation
-Raw material security
-Competitive advantage

59
Q

Drawbacks of buffer stock

A

-Cost of holding stock
-Risk of obsolescence
-Opportunity cost

60
Q

Why is waste common?

A

-Stock becomes obsolete
-Perishable goods thrown away
-Stock may be damaged

61
Q

Ways to minimise waste

A

-For perishable items, refrigerate and careful stock rotations
-Staff training & computer inventory management systems
-Effective sales forecasting

62
Q

How can lean production provide a competitive advantage?

A

-Lower unit costs achieved so prices may be lower than rivals
-Better quality output due to reliable suppliers and carefully managed production.

63
Q

Define Quality Circles

A

Groups of workers meet regularly to solve quality issues in production process

64
Q

Advantages of Quality circles

A

-Workers motivated as involved in decision making
-Relevant and focused solutions

65
Q

Disadvantages of Quality circles

A

-Managers need to trust workers and solutions
-Meetings must be organised regularly

66
Q

Advantages of Quality control

A

-Specialists employed to check standards
-Simple way to check quality

67
Q

Disadvantages of Quality control

A

-Rejection of product is significant waste
-Little focus on cause of defect

68
Q

Advantages of Quality assurance

A

-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
Q

Disadvantages of Quality assurance

A

-Training & skilled labour force required so costs increase
-Reworking products may lengthen process

70
Q

Competitive advantages of Quality management

A

-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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