2.4 resource management Flashcards
Define job production
What are the advantages and disadvantages
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
Define batch production
What are the advantages and disadvantages
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
Define flow production
What are the advantages and disadvantages
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
Define cell production
What are the advantages and disadvantages
The production line is organised into small groups (cells) with each each developing a responsibility for the finished product
What method of production would a supplier to primark use
Flow production to meet the constant consumer demand and to get economies of scale , reducing average costs
Define productitivty
The output of a person/machine per time period
What is the formula for labour productivity
Output per time period / number of employees
How can productivity be improved
Training employees Improving motivation Investing in better capital Better quality raw material Improved organisation of production
Why would a firm aim for lower productivity
To reduce waste
To not over produce
To maintain high levels of motivation for employees
Define efficiency
Is about making the best use of the firms resources to maximise production and minimise costs
What is labour is intensive production
What are the advantages and disadvantages
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
What is capital intensive production
What are the advantages and disadvantages
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
What are ways of improving efficiency
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
Define capacity utilisation
Measures the proportion of current output to maximum possible output for a given period of time
What is the formula for capacity utilisation
= actual output / maximum possible output x 100%
What are ways of improving capacity utilisation
Increase workforce hours
Improved marketing
Balancing seasonal demand
Define stock
The value of a product kept on premises at any one time
Define stock control
The attempt by a business to ensure stock levels are managed efficiently
What are the types of stock control
Explain them
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.
Explain maximum and minimum stock level and reorder level in a stock graph
Explain lead time
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
Define waste
Anything that does not add value to the product
Define lean production
Aims to minimise cost and enhance quality by trying to reduce waste
Define quality
The features of a product which satisfy customer needs
Define quality control
What are the advantages and disadvantages
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
Define quality assurance
What are the advantages and disadvantages
Inspecting goods at each stage of the production process
A - quality system at every stage of production
D- may encourage complacency
Define Quality circles
Brings together to identify potential improvement in product quality
Define Total Quality Management
What are the advantages and disadvantages
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
Define Kaizen
Continuous improvement by small groups to try and improve quality
What is under utilisation of capacity
Is when output is less than the maximum possible, leading to higher average costs
What is over utilisation of capacity
Is when output is more than the maximum possible
Would not be able to accept new orders, customers,are lost to competitors
What are the problems of too much stock
Opportunity cost - money used for stock could have been used better Cash flow problems Increased storage costs Increased financing costs Increased waste
What are the problems of too little stock
Lost customers
Delays in production
Loss of reputation
What are the ways of getting a competitive advantage using lean production
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
