2.4 resource management and 2.5 external influences

Question 1

job production

Answer 1

= means to produce one item at a time - labour intensive that requires a skilled work set
+specific to your needs
+simple production
- expensive
- high selling costs

Question 2

batch production

Answer 2

makes more than one item at a time
+ production can be changed to meet customer needs
+ less labour intensive
+ lower wages can be paid as workers are less skilled
- high average costs
- repeated work can cause demotivation

Question 3

flow production

Answer 3

= items flow round the factory in a continuous process until finished - large quanitites are made
+ lower average costs
+ JIt system
- high set up costs
- low motivation of staff

Question 4

cell production

Answer 4

= production of items organised into groups and then teams are set to work stations and see product through to completion
+minimal handling reduces cost
+ lead times are reduced
- tension in cells
- huge investment

Question 5

labour productivity

Answer 5

= amount a worker produces
- measurements will be different depending on industry
- measurement may be hard to quantify

Question 6

ways to improve productivity

Answer 6

• total quality management approach
• lean production = reduced wastage
• JIT
• cell production
• improve employee motivation

Question 7

formula for labour productivity

Answer 7

output - per time period / number of employees per time period x100

Question 8

formula for capital productivity

Answer 8

output / capital employed x 100

Question 9

factors influencing productivity

Answer 9

• quality of inputs in production process
• labour shift organisation of workers= correct number of staff at peak times will increase productivity
• investment in new technology

Question 10

efficiency - what is the formula

Answer 10

= refers to the peak level of performance that uses the least amount of inputs to achieve the highest amount of output
= requires reducing the number of unnecessary resources used to produce an ouput

av cost = TC / output

Question 11

capacity utilisation

Answer 11

current output as a % of maximum output
= high capacity - fixed cosrs are spread over more units of production
= low capacity - fixed costs can be too high to stay in business

Question 12

under utilisation

Answer 12

current output is less than maximum output

Question 13

over utilisation

Answer 13

current output is more than maximum output

Question 14

define capacity

Answer 14

= maximum possible output of a business
under - not all product was sold
over - too much sold so some delays with supply

Question 15

formula for capacity utilisation

Answer 15

current output / maximum possible output x 100

Question 16

what determines a firms maximum output and when is it achieved

Answer 16

• quantity of buildings
• machinery and labour available
  = achieved when firm is making full use of buildings, machinery and labour available

Question 17

what are some ways to improve capacity utilisation

Answer 17

• increase demand
• cut capacity (whether this be removing certain shifts from the rota - making workers redundant)

Question 18

what are the 3 types of stock

Answer 18

• raw materials and components = purchased from outside suppliers, held by firm until it’s a finished output
• work in progress = items that have started the manufacturing process but are incomplete.
• finished goods = finished product, bought in large batches or even individually

Question 19

in relation to stock control charts, define the reorder level

Answer 19

when stocks fall to this level, a new order will be sent to the supplier; this level is reached some time before the delivery as suppliers needs to process order and make delivery (lead time)

Question 20

in relation to stock control charts, define the buffer stock

Answer 20

also known as the minimum stock level, the firm will want to keep a certain minimum stock level so that it will have something to fall back on in case of complications with suppliers/delivery

Question 21

disadvantages of a stock control chart

Answer 21

• orders may arrive early/late
• may not always be the same / correct order quantity
• rate of usage is likely to not be constant
• stock levels may vary over the time period; may be steeper on the chart

Question 22

what are the implications of holding too much stock

Answer 22

• cash flow problems
• opportunity cost = could reduce competitiveness
• increased storage costs
• increased finance costs
• increased stock waste

Question 23

what are the implications of holding too little stock

Answer 23

• emergency customer orders may not be met
• loss of firms reputation and goodwill

Question 24

what is the optimum level of stock

Answer 24

where the total costs of holding stock are lowest

Question 25

JIT stock

Answer 25

just in time stock
= operate with a zero buffer stock
= order stock when its needed
+ reduced storage costs, resulting in an increased cash flow
+ minimises wait time and transport costs
+ reduces capital tied up in stock
+ decreases product defects
- risky
- no room for error
- have to maintain reliable relationships with suppliers

Question 26

waste minimisation

Answer 26

management approach that looks to reduce the amount of wasted product or resource that a business produces

Question 27

lean production

Answer 27

method that focuses on eliminating waste (waste being anything that doesn’t add value to the final product)
- minimises the use of business resources, materials, manpower, capital and time
= creates higher levels of productivity
= requires less stock
= competitive advantage

Question 28

define a trade off

Answer 28

accepting less of one thing to gain or achieve more of another

Question 29

what is quality control

Answer 29

based on inspection, they check that the output meet the minimum acceptable standards
- faulty products can slip through as not all products are checked
- stops staff producing the best quality as only need to meet minimum requirement
+ requires little staff training

Question 30

quality assurance

Answer 30

system that assured customers that detailed systems are in place in every stage of the process
- less interaction and connection with customer experience
+ reassurance to customers that their product will most likely have no defects or faults

Question 31

total quality management

Answer 31

the continual process of detecting and eliminating manufacturing errors, streamlining supply chains, improving customer experience and ensuring all employees are fully trained
+ deeply routed into the company culture
+ incorporates all aspects of a company
- may be an expensive and extensive process

Question 32

kaizen methodology

Answer 32

= based around people and their ideas other than the investment into new technology
= each change on its own may be of little importance, yet when they are accumulated together, the effects can be substantial.

Question 33

define right first time

Answer 33

avoiding mistakes and therefore achieving high quality with no wastage of time or materials

Question 34

what are some economic influences on a business

Answer 34

• business cycle
• changes in inflation
• changes in interest rates
• changes in exchange rates
• changes in taxation and government spending

Question 35

what is legislation

Answer 35

laws initiated by the government that relate to business operations and employees, as well as the general public and environment.

Question 36

what are the five main areas where legislation affects business

Answer 36

• consumer protection = treated fairly
• employee protection = fair pay, sick leave, holiday, redundancy
• environmental protection = pollution, finite resources, fair-trade
• competition policy = monopolies, TNCs, takeovers and mergers
• healthy and safety = within the workplace, equipment is safe to operate

Question 37

define oligopolies

Answer 37

markets that are dominated by a few really large companies
- markers and consumers then tend to focus on non-price factors

Question 38

responses of a business to a changing competitive environment

Answer 38

• price cutting
• increase product differentiation
• collusion