2.4.1 Flashcards
What are the 4 production methods?
Job Production
Flow production
Batch Production
Cell production
What is Job Production?
A manufacturing process where a business produces one off bespoke goods to the exact requirements.
What are (2) Advantages of Job Production?
High quality bespoke goods tailored to customer needs leads to good reviews (Tailored to their needs)
The workers are motivated due to no repetition. ( leads to increased productivity)
What are (2) Disadvantages of Job Production?
Often labour intensive, due to lack of specialised machinery
High labour costs due to skilled workers
Production may be slow due to longer lead time.
What batch production?
Groups of the same products are produced.
What are (3) Advantages of Batch Production?
Per Unit costs are lower due to higher output
More use of Machinery
Workers are likely to specialise in one process (productivity increase)
What are (2) Disadvantages of Batch Production?
Less motivation as specialised workers will be repeating the same process ( Absenteeism increase)
If batches are small, cost per unit will still be high
Greater potential for larger defect (one defect may ruin whole batch)
What is Flow Production?
Continuous production of standardised products, usually on a production line.
What are (2) Advantages of Flow Production?
Very low unit costs, due to economies of scale
Output can be produced very quickly, especially useful for high demand periods
What are (5) Disadvantages of Flow Production?
Products are standardised, so lower price is charged
High costs of machinery
Downtime when stopping production process can be expensive.
Training workers
Repetition = Motivation Decrease
What is Cell Production?
When there are multiple teams that are each assigned to one particular part of the production process.
What are (2) advantages of Cell Production?
Motivation increasing because of teamwork
More efficient than other methods due to sharing skills and expertise with other workers.
What are (2) Disadvantages of Cell Production?
Requires a long time to organise teams in the production process
Teams efficiency may be reduced due to a weaker worker
What is Productivity?
The output per input (person or machine) per hour.
What is Labour Productivity?
A businesses measure of the output per worker during a specific period of time.
What is capital Productivity?
A businesses measure of the output of capital employed during a specific period of time.
Formula for Labour and Capital productivity?
Output/Number of workers OR machines
3 Step Chain of Analysis for Productivity.
Productivity increases-> Business costs decreases -> Businesses can lower prices or maintain higher profit margins
What are 4 methods to increase productivity?
Employee Motivation (financial or non-financial)
Skills and education (workers are more autonomous, supervision is reduced)
Investment in capital equipment (Likely to make less mistakes, machinery can operate for longer without a break)
Flexible business structure ( Working hours that suit workers )
What does the link between Productivity and competitiveness refer too?
Businesses that increase level of productivity are likely to be more competative.
What does Competitiveness refer too?
Competitiveness refers to to ability of a business to maintain or grow its sales and market share given the actions of rivals.
Why do competitive firms usually increase productivity?
They have the financial resources required to boost productivity.
For example, by undercutting competitors prices and increasing profit. They are able to train staff and introduce financial incentives.
What is efficiency?
Efficiency refers to the ability of a business to use its production resources as cost effectively as possible.
When is the maximum efficiency level achieved?
Economies of scale are maximised and diseconomies of scale are minimised.
What are 4 ways to improve efficiency?
Relocating to a smaller location to lower fixed costs
Investment in capital equipment (Increase rate of output and quality)
Organisational restructuring (Delaying reduces labour costs as layers of management are reduced & Redeployment can motivate staff by providing new opportunities for them)
Adoption of lean production techniques (Reduces all types of waste)
What is labour intensive production?
Predominantly uses physical labour in the production of goods/services
What is Capital intensive production?
Predominately uses machinery and technology in the production of goods/services.
When is Labour intensive production often used?
Places where labour costs are low
When is capital intensive production often used? 2
Large scale production of goods
When labour costs are high
2 Advantages of Capital Intensive Production?
Machines can run for long periods without breaks
Faster Output
2 Advantages of Labour Intensive Production?
Workers can be creative
Workers may have flexible skills
2 Disadvantages of Labour Intensive Production?
Workers may be unreliable and need regular breaks
Training costs can be significant
2 Disadvantages of Capital Intensive Production?
Breakdowns can delay production massively
Lack of flexibility
What are factors that affect what production process we use?
The level of output
Whether product is standardised or customised
The level of automation used to produce
