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A-level Business (new) > 2.4- Resource Management > Flashcards

2.4- Resource Management Flashcards

1
Q

How is efficiency maximised within production?

A
  • Efficiency is maximised when goods are produced at the minimum unit or average production cost.
  • Production should aim to operate at the minimum average costs per unit so that they can take advantage of economies of scale.
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2
Q

What is labour intensive production?

A
  • Labour intensive production makes products using mostly human effort.
  • Countries such as china and India have access to cheap labour so may favour these production methods.
  • The nature of the product will determine if it is suitable for labour intensive production (e.g cars can be made by hand, but for a company selling a car at £20,000 it will not be effective, however if Rolls Royce are selling each car for £500,000 it may be worth it.
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3
Q

What is capital intensive production?

A
  • In capital intensive production goods are produced using mainly machines and equipment.
  • UK has high labour costs so favours capital intensive production.
  • This allows a business to take advantage of EOS.
  • However, machines often break, need to be maintained and are expensive to buy.
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4
Q

What are 2 advantages to JIT delivery?

A
  • No wastage
  • Cost saving in terms of premises and staff
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5
Q

What are 2 disadvantages of JIT delivery?

A
  • Business won’t be able to meet unpredicted surges of demand.
  • If the delivery doesn’t turn up in time this can stop the whole production line, which is costly.
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6
Q

What is waste within a business?

A

Any activity or result that the customer doesn’t value and is not willing to pay for. These activities that don’t add value for the customer between the inputs and the outputs must be removed or minimises.

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7
Q

How does waste minimisation affect a business?

A
  • Can help improve efficiency and reduce the unit costs of production.
  • WM can improve the public image of the business, if they are seen to be more eco friendly.
  • WM can carry heavy legal fines for non compliance.
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8
Q

What is lean production?

A

LP is a Japanese approach to prep diction first adopted by Toyota.
It aims to reduce resources used in production, to use less of everything:
- Time
- Labour
- Capital
- Space in the factory
- Raw materials

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9
Q

What are the benefits of lean production?

A
  • Improves customer service though delivering exactly what is required when they want it.
  • Improves productivity in terms of output per worker per time period.
  • Improvements in quality through reduction in defects and reworking faulty goods.
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10
Q

What is ‘Kaizen’?

A
  • AKA continuous improvement
  • It is a policy of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.
  • This approach assumes that employees are the best people to identify room for improvement, since they see the process in action all the time.
  • It focuses on small changes rather than radical changes normally done by the western world.
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11
Q

How is competitive advantage achieved though quality?

A
  • More customers will be willing to pay more for the quality that they are offering.
  • This quality may enable them to appear superior to their rivals in the eyes of the customers.
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12
Q

What is buffer stock?

A

The desired minimum stock level held by a firm just in case something goes wrong.

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13
Q

What is a competitive advantage?

A

A feature that gives one business an edge over it’s rivals.

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14
Q

What is competitiveness?

A

The extent to which a firm can stand up to or beat rivals.

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15
Q

What are opportunity costs?

A

The cost of missing out on the next best alternative when making a decision.

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16
Q

What are stockholding costs?

A

The overheads resulting from the stock levels held by a firm.

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17
Q

What is productivity?

A

The output per unit (person or machine) per hour.

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18
Q

What is production?

A

The total amount of output that is produced in a time period.

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19
Q

What are the 4 methods of production?

A
  • Job
  • Batch
  • Flow
  • Cell
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20
Q

What is job production?

A

Where one single product is made at a time.

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21
Q

What are 2 advantages of using job production?

A
  • Unique one off builds specific to a customer.
  • Very skilled motivated workers.
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22
Q

What are 2 disadvantages of using job production?

A
  • Skilled labour is expensive
  • Hard to speed up the production process of demand increases
23
Q

What is batch production?

A

When a business wants to make more than one item at a time (made in batches).

24
Q

What are 2 advantages of using batch production?

A
  • Production can be changed to meet customer needs or fluctuations in demand.
  • Lower skilled workforce means lower wages can be paid.
25
Q

What are 2 disadvantages to using batch production?

A
  • Workers may be less motivated with repetitive work.
  • Small batches carry high average unit costs (not taking advantage of EOS).
26
Q

What is flow production?

A

Uses production lines with continuous movements of items through the process (e.g cola, cars).

27
Q

What are 2 advantages of using flow production?

A
  • Can make larger quantities, can bulk buy raw materials.
  • Continuous production, stocks/ raw materials don’t need to be held, can use JIT system.
28
Q

What are 2 disadvantages of continuous production?

A
  • High costs to buy the factory and machinery.
  • Low motivation of staff due to repetitive tasks.
29
Q

What is cell production?

A

Dividing up production into separate self contained areas that are each responsible for a section of work.

30
Q

What are 2 advantages to cell production?

A
  • Wastage through movement of materials is reduced.
  • Time waiting for stock to arrive is reduced.
31
Q

What’s are 2 disadvantages to using cell production?

A
  • Breakdown of machinery will stop the production.
  • Needs more staff to maintain than a continuous flow.
32
Q

What are the 4 ways to improve production?

A
  • Productivity bonus
  • Productivity deal
  • Staff training
  • Investment in new machinery and equipment
33
Q

What are economies of scale?

A

The cost advantages that can occur when a company increases their scale of production and becomes more efficient, resulting in a decreased cost-per-unit.

34
Q

What is stock control?

A

Stock control is the control of the flow of stock in a business, it concerns the ordering and management of:
- Raw materials
- Components
- Work in progress
- Finished goods

35
Q

What is inventory?

A

Inventory is another term for a business stock. It can mean any of these: raw materials, work in progress, components or even finished goods.

36
Q

What are buffer stocks?

A

Buffer stocks are stocks which are held in case there is unforeseen rise in demand or a problem with supply.

37
Q

What are 2 advantages of buffer stocks?

A
  • Holding buffer stocks means that a business can easily respond to changes in consumer demands.
  • Holding buffer stocks means that if the suppliers cannot deliver on time that production will not be affected.
38
Q

What are 2 disadvantages of buffer stocks?

A
  • The cost of storage is high, a business will need to pay for premises, staff and security of the stock.
  • This can tie up working capital of a business.
39
Q

What are stock our costs?

A

Stock our costs are costs of not having stock when it is needed, can lead to:
- Loss of customer goodwill
- Loss of sales revenue
- Damage to reputation
- Disruption to production

40
Q

What is just in time delivery (JIT)?

A
  • Means that a business does not keep stocks of parts in a warehouse.
  • Instead they order the parts and get them delivered same day from the supplier.
41
Q

What are the 7 forms of wastage within a business?

A
  1. Over production
  2. Waiting time
  3. Transportation time
  4. Excess stock
  5. Excess motion
  6. Product quality
42
Q

What is quality?

A

Quality is how well a product or service does what it was designed to do. Real quality is consistent.

43
Q

What is quality control?

A
  • Quality control is the traditional way of managing quality (detecting faulty output).
  • Quality control may involve sampling or looking at data about the product to see if quality is consistent.
44
Q

What is quality assurance?

A
  • Quality assurance is about how a business can design the way a product or service is produced or delivered to minimise the chances that output will be sub+standard.
  • Quality assurance builds quality into every stage of the production process, not left until the end.
45
Q

What is total quality management (TQM)?

A
  • TQM puts quality at the heart of everything in business.
  • ‘Getting it right first time every time’
  • TQM is intended to reduce wastage as well as increase the quality of the finished products.
46
Q

What are 3 advantages of TQM?

A
  • Not paying for inspectors
  • More involved workers
  • More satisfied customers (better quality)
47
Q

What are 3 disadvantages of TQM?

A
  • Takes time to introduce
  • Will cost to train staff
  • Some staff can be resistant to change
48
Q

What is a quality circle?

A

A quality circle is a group of employees who meet on a regular basis to talk about quality problems that are relevant to the part of the production process that they work on.

49
Q

What is capacity utilisation?

A

Capacity utilisation is the extent to which the maximum capacity for output that is being used (usually a %).

50
Q

What is the equation to find capacity utilisation?

A

Capacity utilisation= current output/ maximum possible output X100

51
Q

What are ways that can improve capacity utilisation?

A
  • Could increase demand by a price cut sale or promotion.
  • Could increase off peak usage at off peak times by doing time dependant promotions/ deals.
  • Business could sell assets.
52
Q

What are 3 implications of under utilisation?

A
  • Higher fixed costs per unit.
  • Unmotivated staff not busy.
  • Impact on brand image.
53
Q

What are 3 implications of over utilisation?

A
  • Can damage reputation of the business
  • Staff may do too much overtime and so have accidents due to tiredness.
  • Quality suffers as mistakes are made in production.

A-level Business (new) (19 decks)

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