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Business > 2.4 - Resource Management > Flashcards

2.4 - Resource Management Flashcards

1
Q

What is batch production?

A

A method that involves producing products in groups

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2
Q

What is cell production?

A

Producing a family of products in a small self-contained unit (a cell) within a factory

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3
Q

What is flow production?

A

Large-scale production of a product where each operation is performed continuously after the previous

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4
Q

What is job production?

A

The manufacture of one, bespoke product at a time

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5
Q

What is meant by capital intensive?

A

when products are mainly produced by machinery

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6
Q

What is meant by capital productivity?

A

The amount of output each unit of capital produces

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7
Q

What is efficiency?

A

Producing a level of output where average cost is minimised

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8
Q

What is meant by kaizen?

A

A Japanese term that means continuous improvement

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9
Q

What is meant by labour intensive?

A

Production methods that make more use of labour relative to human workers

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10
Q

What is labour productivity?

A

The amount of output each unit of labour produces

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11
Q

What is outsourcing?

A

Giving work to sub-contractors to reduce costs

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12
Q

What are the advantages and disadvantages of job production?

A
  • quality is high because workers are skilled
  • well motivated workforce
    BUT
  • high labour costs (e.g. wages)
  • time consuming and expensive
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13
Q

What are the advantages and disadvantages of batch production?

A
  • more use of machinery
  • can change production depending on demand
  • unit costs are lower (bulk buying)
    BUT
  • small batches = high costs
  • complex machinery needed
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14
Q

What are the advantages and disadvantages of flow production?

A
  • very low unit costs due to economies of scale
  • output can be produced very quickly
    BUT
  • huge set up costs
  • low worker motivation
  • difficult to change product
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15
Q

What are some factors that influence productivity?

A
  • motivation of workers - higher motivation = higher productivity and vice versa
  • education and training
  • labor flexibility - flexible workforces mean that all workers can do multiple tasks, improving productivity
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16
Q

What are some factors influencing efficiency?

A
  • outsourcing - reduces costs and allows the business to focus on other aspects of the product
  • relocating - relocating may result in lower costs due to factors such as lower rent, wages and better transport links
  • delayering - removing a level of hierarchy from the organisational structure may reduce costs and make a business more efficient as their will be less salaries to pay
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17
Q

What are the advantages and disadvantages of capital intensive strategies?

A
  • machinery is often more precise and consistent
  • machinery can operate 24/7
  • machinery is easier to manage
    BUT
  • very high set-up costs
  • huge costs and delays if machinery breaks down
  • can be inflexible - may struggle to meet changes in demand
18
Q

What are the advantages and disadvantages of labour intensive strategies?

A
  • more flexible e.g. can be retrained
  • cheaper from small scale production
  • gives an aspect of creativity and ability to solve problems and make improvements
    BUT
  • people are harder to manage
  • people can be unreliable
  • people may become unmotivated
19
Q

What is meant by capacity utilisation?

A

Refers to the use that a business makes of its resources

20
Q

What is the formula for capacity utilisation?

A

Capacity utilisation = current output / maximum possible output (x100)

21
Q

What are the implications for under-utilisation?

A
  • working with under-utilised capacity often means the businesses unit costs are not minimised
  • low capacity utilisation may affect morale of workers
  • they may feel that the business is struggling to generate orders which may lower motivation
22
Q

What are the benefits of under-utilisation?

A
  • the business will be able to cope more easily with sudden increases in demand
  • less likely to be less work-related stress as managers and workers will be more comfortable with their workload
  • this can reduce sickness and absenteeism
23
Q

What are the drawbacks of over-utilisation?

A
  • can put a strain on some of the resources and workforce
  • may increase the risk of accidents or absence
  • machines may also be over workers to breaking point, which can also be expensive to repair
  • business may not be able to respond to changes in demand
24
Q

What are the benefits of over-utilisation?

A
  • average costs will be lower because fixed costs will be spread across more units of output
  • helps to improve competitiveness and raise profits
  • staff motivation may be high if staff feel secure in their jobs
  • can improve a company’s image
25
Q

What are some ways to improve capacity utilisation?

A
  • Reducing capacity - a business may do this by rationalising, which is the process of getting rid of resources that the business can do without e.g. employees, unused fixed assets
  • increase sales - selling more means the business will have to produce more, leading to a rise in capacity utilisation
26
Q

What is buffer stock?

A

Stocks held as a precaution to cope with unforeseen demand.

27
Q

What factors may influence stock levels?

A
  • demand - sufficient stocks need to be kept to satisfy normal demand, but also enough to over growth in sales and unexpected demand
  • the costs of stock holding - if stock is expensive to hold then only a small quantity will be kept
  • the type of stock - businesses can hold small stocks of perishable products. Stock can also become out of date when replaced by new models
28
Q

What are the implications of holding too much stock?

A
  • opportunity cost - capital used to hold stock could be used to purchase other things, such as new machinery
  • storage - stock of raw materials, components and finished goods occupying pace in buildings which may be expensive. Some stock may need to kept in special conditions, which creates additional costs.
  • unsold stock - changes in demand may lead to businesses being left with stocks that it cannot sell.
29
Q

What are the implications of having too little stock?

A
  • business may not be able to cope with unexpected increases in demand
  • delayed stock deliveries may lead to a halt in production
30
Q

What is Just-in-time (JIT) management of stock?

A

A lean production method where businesses only order stock just in time to be used.

31
Q

What are the advantages and disadvantages of JIT?

A
  • improves cash flow since money is not tied up in stocks
  • lower stock holding costs
  • reduces waste
    BUT
  • advantages of bulk buying may be lost
  • unreliable suppliers may lead to delays in deliveries of goods
  • difficult to cope with sharp increases in demand
32
Q

What is waste minimisation?

A

Managing the amount of waste a business has

33
Q

What is lean production?

A

A waste minimisation approach that focuses on cutting out waste whilst ensuring quality

34
Q

Why are lean producers likely have a competitive advantage?

A

Because lean production:
- raises productivity
- reduces costs and cuts lead times
- improves reliability and speeds up design time
With these improvements, businesses can charge lower prices, offer better quality and reliability and fight off rivals

35
Q

What is quality assurance?

A

A method of working for businesses that takes into account customers’ wants when standardising quality. It often involves guaranteeing that quality standards are met

36
Q

What are quality circles?

A

Groups of workers meeting regularly to solve problems and discuss work issues.

37
Q

What is quality control?

A

Making sure that the quality of a product meets specified quality performance criteria.

38
Q

What is Total Quality Management (TQM)?

A

A managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business.

39
Q

What is a way to remember the difference between quality control and quality assurance?

A
  • Quality assurance aims to prevent defects with a focus on the PROCESSES used to make the product whereas quality control aims to identify defects in the FINISHED PRODUCT.
  • Quality control is a REACTIVE TASK.
40
Q

How may businesses gain a competitive advantage from quality management?

A
  • improved product quality will help increase sales.
  • may help to cut business costs if faults are identified before the product reaches the market
  • can be used as the businesses USP = able to charge higher prices
  • this will give firms the competitive advantage to win customers from rivals, increase market share, raise revenue and improve profitability.

Business (9 decks)

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