2.4 resource management

Question 1

Define job production

What are the advantages and disadvantages

Answer 1

The business concentrates on producing a single unit at a time

A
Charge higher prices as its tailored to the customers specific needs
High levels of motivation as each product is different

D
Cost per unit is high, due to low productivity and high skill
Recruitment can be hard as high skilled workers are needed

Question 2

Define batch production

What are the advantages and disadvantages

Answer 2

The manufacture of a number of goods in progress before moving on together to the next stage of production

A
Allows variation in the product made
High rates of productivity

D
High fixed costs as specialist machinery is needed
Cost per unit is higher than flow production

Question 3

Define flow production

What are the advantages and disadvantages

Answer 3

Units move directly from one operation to the next in a continuous sequence

A
Unit labour costs are very low
Huge volumes produced allows high demand in mass markets to be met

D
High initial costs of capital
Products are identical - lack of motivation

Question 4

Define cell production

What are the advantages and disadvantages

Answer 4

The production line is organised into small groups (cells) with each each developing a responsibility for the finished product

Question 5

What method of production would a supplier to primark use

Answer 5

Flow production to meet the constant consumer demand and to get economies of scale , reducing average costs

Question 6

Define productitivty

Answer 6

The output of a person/machine per time period

Question 7

What is the formula for labour productivity

Answer 7

Output per time period / number of employees

Question 8

How can productivity be improved

Answer 8

Training employees 
Improving motivation
Investing in better capital
Better quality raw material 
Improved organisation of production

Question 9

Why would a firm aim for lower productivity

Answer 9

To reduce waste
To not over produce
To maintain high levels of motivation for employees

Question 10

Define efficiency

Answer 10

Is about making the best use of the firms resources to maximise production and minimise costs

Question 11

What is labour is intensive production

What are the advantages and disadvantages

Answer 11

Where labour is the main method of producing goods and
services

A
Gives a USP - charge higher prices
Better reputation

D
Higher variable costs
Chance of human error and absenteeism
Humans have to be trained and motivated

Question 12

What is capital intensive production

What are the advantages and disadvantages

Answer 12

Where machines are the main method of producing goods and services

A
Consistency in production 
High rates of productivity 
D
Have a high set up and maintenance cost

Question 13

What are ways of improving efficiency

Answer 13

Reducing overheads
Relocate to another country (lower labour costs)
Redesigning the product so its cheaper or easier to make
Reducing waste in the production process

Question 14

Define capacity utilisation

Answer 14

Measures the proportion of current output to maximum possible output for a given period of time

Question 15

What is the formula for capacity utilisation

Answer 15

= actual output / maximum possible output x 100%

Question 16

What are ways of improving capacity utilisation

Answer 16

Increase workforce hours
Improved marketing
Balancing seasonal demand

Question 17

Define stock

Answer 17

The value of a product kept on premises at any one time

Question 18

Define stock control

Answer 18

The attempt by a business to ensure stock levels are managed efficiently

Question 19

What are the types of stock control

Explain them

Answer 19

Just in case - business keeps a certain amount of stock in reserve to allow for possibilities like late deliveries or unexpected demand

Just in time - inputs into the production process arrive only when they are needed.

Question 20

Explain maximum and minimum stock level and reorder level in a stock graph

Explain lead time

Answer 20

Maximum stock level is the stock after a delivery from suppliers

Minimum stock level is the minimum level stock can reach

Reorder level is when the business orders stock from a supplier

Lead time is the time it takes to manufacture and deliver stock

Question 21

Define waste

Answer 21

Anything that does not add value to the product

Question 22

Define lean production

Answer 22

Aims to minimise cost and enhance quality by trying to reduce waste

Question 23

Define quality

Answer 23

The features of a product which satisfy customer needs

Question 24

Define quality control

What are the advantages and disadvantages

Answer 24

The process of inspecting goods at the end of the production process

A - maintains high quality
D- if it is done through sampling it cannot be trusted

Question 25

Define quality assurance

What are the advantages and disadvantages

Answer 25

Inspecting goods at each stage of the production process

A - quality system at every stage of production
D- may encourage complacency

Question 26

Define Quality circles

Answer 26

Brings together to identify potential improvement in product quality

Question 27

Define Total Quality Management

What are the advantages and disadvantages

Answer 27

Getting all workers to take responsibility for building in better quality

A- Becomes deeply rooted in the firms culture
D- High costs as it requires extensive training

Question 28

Define Kaizen

Answer 28

Continuous improvement by small groups to try and improve quality

Question 29

What is under utilisation of capacity

Answer 29

Is when output is less than the maximum possible, leading to higher average costs

Question 30

What is over utilisation of capacity

Answer 30

Is when output is more than the maximum possible

Would not be able to accept new orders, customers,are lost to competitors

Question 31

What are the problems of too much stock

Answer 31

Opportunity cost - money used for stock could have been used better
Cash flow problems 
Increased storage costs 
Increased financing costs
Increased waste

Question 32

What are the problems of too little stock

Answer 32

Lost customers
Delays in production
Loss of reputation

Question 33

What are the ways of getting a competitive advantage using lean production

Answer 33

Higher levels of productivity, reducing labour cost per unit
Less space needed due to lower stock, lower fixed costs
Higher quality leads to a good reputation , higher prices charged
Develop new products faster, first firm on the market