2.4 - resource management Flashcards
What are the four methods of production?
- job production
- Flow production
- Batch production
- Cell production
What is job production?
Job production is used for one off items produced by skilled workers.
Each product can take a long time to make, so fewer products are made in a given time period compared to other production methods, meaning productivity is lower.
Skilled workers will need to be paid higher wages than unskilled workers, which increases costs.
What is flow production?
Flow production uses an assembly line to produce lots of identical products.
Each worker within the flow completes a task before the product is passed on to the next worker, who completes a different task.
Flow production allows a firm to benefit from economies of scale as they can buy raw materials in bulk.
What is batch production?
Batch production is when much of the same equipment is used to make small batches of different products.
The products made in each batch are identical to each other.
The productivity of a business using batch production is higher than one using job production since each product in a batch identical.
There may be a higher cost and inconvenience of having to store lots of raw materials.
What is cell production?
Cell production is when a flow is divided into sets of tasks, with each set of tasks being completed by a work group.
This means that individual workers are not carrying out repetitive tasks on their own within a flow, which can increase a workers productivity as they feel happier.
What is productivity?
Productigvity is the rate of production from each input (human worker or automated machine).
What can businesses do to increase productivity?
- Use machinery - machines can often be used to complete tasks done by a human work force faster and for more hours a day
- Human work force - training a human workforce so that staff know the best and quickest methods to make a product can improve productivity
What is efficiency?
Efficiency is when production happens at an overall minimum average cost.
Beign efficient is eseentially about getting more output from a given amount of inputs and reducing the waste of all the inputs e.g. time and materials.
How can a business increase efficiency?
- Increasing productivity can increase efficiency
- Cutting the costs involved with production
- Reconsidering a products design mix so its easier or cheaper to produce
What is a labour-intensive firm?
A labour intensive firm uses more workers and less machinery.
In countries where labour is relatively cheap, labour intensive production is common.
What are the advantages of labour intensive production?
- For firms who produce on a small scale it makes more sense to use human workforce than machinery
- Humans can be retrained if they need to carry out new tasks, machines need to be replaced
- human workers can solve many more problems that may arise udring production compared to machines
What are the disadvantages of labour intensive production?
- Its harder to manage people than machines
- people can be unreliable (they can get sick, wont work during holidays)
- wage increases means that production costs increase over time
What is a capital intensive firm?
A capital intensive business uses more machinery and relatively few workers.
Larger firms tend to be more capital intesive than smaller firms.
A rise in the csot of labour can also cause firms to switch to a capital intensive method of production
What are the advantages of capital intesive production?
- In the long terms machines can be cheaper than using lots of manual labour
- Machinery is often more precise than human workers
- Quality of products can be higher with machines
- Machinery is able to work 24/7 and its easier to manage than people
What are the disadvantages of capital intensive production?
- Machinery can be very expensive to buy and maintain
- Machines are usually only suited for one task making them inflexible
- If machinery breaks down it can lead to long delays in production
What is capacity?
The capacity of an organisation is the maximum output that it cna produce in a given period without buying any more fixed assets.
What are some factors that can affect a businesses capacity?
- The number of employees and how skilled they are
- The technology and machinery the business has
- The production process a business uses
- The amount of investment in the business
What is capacity utilisation?
Capacity utilisation is how much capacity a business is using.
What is the formula for capacity utilisation?
Capacity utilisation = current output / maximum output x 100
What is over utilisation?
100% capacity utilisation has drawbacks and can be known as over utilisation.
What are the drawbacks of over utilisation?
- The business may have to turn away potential cusotmers because it cant increase output anymore.
- Machines are on 24/7 which can increase the chance of them breaking down
- There is no margin for error
- Employees and managers can be more stressed
How can a business deal with over utilisation?
- Increasing capacity
- Buying more machines
- Increasing staff levels
- Increasing productivity
- Outsourcing work
What is under utilisation?
Under utilisation is low capacity utilisation. Its inefficient because it means a business is not getting good use out of machines and facilities that have been paid for
How can businesses deal with under utilisation?
- Businesses can increase demand by changing their marketing mix
- Changing marketing mix may take customers from their competitors
- Businesses can fill spare capacity by accepting outsourced work
- Reducing capacity
