2.4 Resource management Flashcards
What is production?
The transformation of resources into finished goods or services
What is an example of primary industry?
The use of land and a tractor to grow cabbages
What is an example of secondary industry?
The use of wood, plastic, screws, cutting equipment etc to manufacture furniture
What is an example of tertiary industry?
Transport, education, health and social work are all examples
What are the methods of production?
Job
Batch
Flow
Cell
What is job production?
It is the production of a single product at a time
What are examples of products made in job production?
Small-scale an example is the baking of a child’s birthday cake. Large-scale an example is building a ship.
What is the labour like in job production?
The number of units produced is small, so the process tends to be labour intensive. The workforce is usually made up of skilled workers or specialists.
What are advantages of job production?
+ Quality is high as workers are skilled
+ Workers are well motivated because work is varied
+ Products can be custom made
What are disadvantages of job production?
- High labour costs due to skilled workers
- Production may be slow
- Generally an expensive method of production
What is batch production?
Making quantities of the same item and dividing production into a number of operations
What are examples of products made in batch production?
A batch of armchairs in a furniture factory or croissants in a bakery
How is batch production efficient?
Larger production runs tend to lower the average cost of production. New technology is being introduced to make it more efficient too.
What are the advantages of batch production?
+ Workers are likely to specialise in one process
+ Unit costs are lower because output is higher
+ More use of machinery is made
What are disadvantages of batch production?
- More complex machinery needed
- Careful planning and co-ordination is needed
- Money may be tied up in work-in-progress
What is flow production?
Production is organised so that different operations can be carried out in a continuous sequence
What are examples of products made in flow production?
Vehicles moving from one operation to the next on a conveyer belt
What is continual flow production?
Products such as clothing material pass continually through a series of processes
What is repetitive flow production?
The manufacture of large numbers of the same product, such as plastic toy parts
What are advantages of flow production?
+ Very low unit costs due to economies of scale
+ Output can be produced very quickly
+ Modern machines can allow some flexibility
What are disadvantages of flow production?
- Products may be too standardised
- Huge set-up costs before production can begin
- Worker motivation can be low - repetitive tasks
What is economies of scale?
The higher the production, the lower unit costs
What is cell production?
It adopts a different approach and involves dividing the workplace into ‘cells’. Inside a cell, machines are grouped together and workers sees the production from start to finish.
What are examples of products made in cell production?
A furniture manufacturer making a kitchen range or a car assembly line
What are advantages of cell production?
+ Product flexibility is improved
+ Team-working is encouraged
+ Safer working environment and more efficient maintenance
What is productivity?
The amount of output that can be produced with a given input of resources. You measure productivity in a period of time.
How do you calculate labour productivity?
Output / Number of workers
How do you calculate capital productivity?
Output / Number of machines
What factors influence productivity?
• Specialisation and the division of labour
• Education and training
• Motivation of workers
• Working practices
• Labour flexibility
• Capital productivity
What is meant by standardisation and division of labour?
Standardisation is the production of a limited range of goods by a business, eg Coca-Cola specialises in soft drinks. Division of labour is when workers/departments specialise in different tasks.
What is meant by education and training?
Involves providing more equipment for schools or improving the quality the quality of teaching
What is meant by motivation of workers?
Firms might use financial incentives, such as piece rates or job rotation
What is meant by working practices?
The methods and systems that employees adopt when working eg productivity might increase by changing the factory layout
What is meant by labour flexibility?
If workers are trained to do different jobs and can switch from one to the other at short notice or where workers can choose their own hours
What is meant by capital productivity?
Introducing new, more efficient technology
What will raising productivity do for a business on a small scale?
They will be able to produce more output with the same level of resources. This will mean costs will be lower and they can charge lower prices, making them more competitive.
What will raising productivity do for a business on a large scale?
They make become more competitive in overseas markets. This will help to boost the nation’s exports and improve the performance of the UK economy.
Why might improving productivity not be enough to outcompete overseas?
Other factors need to be taken into account. for example, price of exports is influenced by exchange rates. If they improve for the UK the price of exports will rise, reducing the competitiveness of UK goods.
What is efficiency?
Making the best possible use of all a business’s resources. A business will want to use its materials, labour and capital as effectively as possible.
When is production said to be efficient?
If average costs are minimised
Draw the average cost curve graph
What does the diagram show?
Average costs fall at first, reach a minimum and then rise again
