2.4 Resource Management

Question 1

production and types

Answer 1

primary industry- land and tractor
second industry - wood plastic glue, labour
tertiary industry - services

job
batch
flow
cell

Question 2

what is job production

Answer 2

production of a single product at a time
products are bespoke
eg: cakes, wedding dresses, large ships
found in manufacturing and service industries
+ quality is high because workers are skilled
+workers motivated because work is varied
+charge high price
-high labour costs
-production may be slow; long leaf time

Question 3

what is batch production

Answer 3

demand for product is regular
production divided into a number of operations, particular operation is carried out on all products in a batch then moves onto next operation
eg: furniture, armchairs with same design and baker
+ workers are likely to specialise in one process
+ production is flexible since different orders can be met
- careful planning and coordination is needed
- less motivation because workers specialise
- money may be tied up in work-in-progress

Question 4

what is flow production

Answer 4

different operations can be carried out one after the other in continuous sequence
production of large quantities of standardised product
large amounts of machinery and equipment
eg: newspapers, food
+ very low unit costs due to economies of scale (large raw materials)
+ out put produced quickly
+production speed can vary based on demand
-huge set up costs
- repetitive tasks lower motivation
-breaks can cause huge expense

Question 5

what is cell production

Answer 5

divides workplace into cells. each cell occupies an area of the factory and focuses on the production of a product family (group of products which require a sequence of similar operations)
+floor space increased because cells use less space
+lead times cut
+less work-in-progress

Question 6

productivity

Answer 6

is the amount of output that can be produced with a given input of resources

labour productivity- output per worker per period of time

capital productivity- output/amount of capital employed in a given period

Question 7

ways to increase productivity

Answer 7

specialisation and division of labour

education and training

motivation of workers

labour flexibility

capital productivity - spend money on new technology

Question 8

efficiency + factors influences efficiency

Answer 8

making best possible use of all a businesses resources
use costs as an indicator of efficiency

introducing standardisation- using uniform resources and activities or producing a uniform product. applied to tools, components, equipment etc BUT can be somewhat inflexible as customisation is more difficult

outsourcing specific activities

investing in new technology

lean production (developed by Toyota) aims to use fewer resources in production (factory space, materials, stocks, labour, capital, time)
= raises productivity, reduce costs and cut lead times, reduce defective products, improves reliability

(eg: JIT, cell production, team working, Kaizen)

Question 9

Kaizen production

Answer 9

“continuous improvement”
workers are always coming up with ideas to improve quality, reduce waste, increase efficiency

Question 10

Just in time production

Answer 10

minimising/ eliminating the amount of stock held by a business= reduce all costs

Question 11

differences with labour and capital intensive production

Answer 11

labour intensive - using larger proportion of labour than capital
+ people are creative = solve problems and make improvements
+ more flexible to changes
- people can be unreliable
- need motivation
capital insentive- involving employing more machinery relative to labour
+ can operate for long periods of time
+ more precise and consistent
- set up costs
- delays if machinery breaks down

depends on:
nature of the product
prices of the two factors
size of the firm

Question 12

capacity utilisation

Answer 12

use that a business makes of its resources.
not able to increase output = full capacity
but may not be possible because cant keep all resources and machinery fully employed all the time + not full = can be flexible to cope with increased orders

Question 13

calculation capacity utilisation

Answer 13

current output/ maximum possible output x 100

Question 14

outcome of under utilisation

Answer 14

have experienced a drop in demand

= may not be making most of its resources and unit costs are not minimised
BUT would be able to cope more easily with sudden increases in demand and less work related stress = reduce sickness and absenteeism

Question 15

outcome of over utilisation

Answer 15

average costs are lower
BUT resource can be over utilised as resources are stretched uncomfortably

• pressure of constantly working = strain on resources = absenteeism , risk of accidents and machines overworked (very bad for flow production)
• cant respond to an increase in demand
• insufficient time for staff training and maintenance work

Question 16

ways of improving capacity utilisation

Answer 16

reduce capacity - by rationalising; reducing excess capacity and getting rid of resources that are not needed
- reduce staff
-sell unused fixed assets
- move premises

increase sales = will have to produce more

outsourcing- hiring other businesses ton complete work

redeployment

Question 17

what is stock

Answer 17

raw materials and components
work in progress
finished goods

buffer stock - emergency stock held incase there is a stock shortage to meet increased demand

Question 18

implications of poor stock control

Answer 18

holding too much:
storage
opportunity cost- capital tied up in stocks earn no rewards, money could of used for something else
spoilage costs - stock may deteriorate over time
unsold stock
shrinkage- opportunities of theft

holding too little:
cant cope with increased demand
stock delivery delays
loose discounts on bulk buying

Question 19

Just in time stock management

Answer 19

part of lean production and kaizen approach

+ improves cash flow as no money tied up in stocks
+ reduce waste and damaged stocks
- lot of faith placed in the realisfiblity and flexibility of suppliers
-lost of bulk buying advantages
- difficult to cope with sharp increase in demand= customers can be let down

Question 20

waste minimisation

Answer 20

due to failure to control stock adequately
-store goods appropriately
- diligently forecast demand for products
- stock rotation (first in first out)
- adjustable pricing strategies
- quick transportation

Question 21

competitive advantage to lean production

Answer 21

• raises productivity
  -reduce costs and cut lead time
• lowers number of defective products
• speeds up design time

Question 22

what is good quality elements examples

Answer 22

physical appearance
reliability and durability
suitability
after sales service

Question 23

what is quality assurance and difference with quality control

Answer 23

a preventative approach
inspection is carried out during the production process = can be prevented before final production= proactive task
involves all employees of a business and making them responsible for ensuring quality at all stages

different to quality control- aim to identify defects in the finished product = reactive task

Question 24

what are quality circles

Answer 24

small groups of workers in the same area of production who meet regularly to study and solve production problems + intended to motivate and involve workers
allow workforce to directly improve nature of the work

only work if they have support of management and employees

Question 25

what is total quality management

Answer 25

to prevent errors (eg; creating poor quality products)
manufacturing process is investigated at every stage
manufacturing processes are investigated at every stage
features:
* quality chains- employers form a series of links between cystomers and suppliers
* company policy, accountability and empowerment- need for a company wide quality policy. emphasis on the role of the individuals and aims to make everyone accountable for their own performance
* control- control over factors that affects a products quality
* monitoring the business process - statistical process control involve collecting data relating to the perforce of a process (can be used to reduce variability)
* team work
* quality circles

Question 26

limitations to TQM

Answer 26

• traning and developement costs of the new system
• only works if there is a comitmnts from entire busines
• stress is placed on process not product

Question 27

what is Kaizen

Answer 27

aims for:
continous improvemnt
elimianting waste
implementing continius improvements