2.4.1 Method Of Production

Question 1

Job production

Answer 1

The production of one off items to meet the needs of each individual customers, often undertaken by small, specialist businesses

Question 2

Examples of job production

Answer 2

Artists, dental technicians, aircraft, architects

Question 3

Advantages of job production

Answer 3

Cheap and easy to set up, specific to customer needs and wants, associates with higher quality and premium products, employees can be better motivated - more job satisfaction, a flexible production method

Question 4

Disadvantages of job production

Answer 4

Individual costs of one unit may be much more expensive, after labour intensive so labour costs are extremely high, requires close consultation with customer, usually reliant on specialist skills

Question 5

Batch production

Answer 5

Identical or similar items are produced together in groups (batches), each item passing through the production process at the same time, before moving onto next

Question 6

Examples of batch production

Answer 6

Printers - certain amount of newspapers, Baker - certain amount of loaves of bread, factory - certain sized shirts

Question 7

Aims of batch production

Answer 7

Concentrate skills , achieve better use of equipment and so will produce good quality products more economic than,naugctauring individually

Question 8

Advantages of batch production

Answer 8

Cost savings can be achieved by buying in bulk, still allows some customers choice due to variations in different batches, products can be worked on by specialist staff at each stage, firms can handle unexpected orders

Question 9

Disadvantages of batch production

Answer 9

Time consuming as it may take time to switch from one production line to another, requires businesses it maintain higher stocks of raw materials, tasks become boring and repetitive - job dissatisfaction, size of batch depends on capacity allowed, not as cheap as flow production

Question 10

Flow production

Answer 10

Items flow though along the production line in a continuous process making high volumes of the exact same product. Once one task is finished, the next task is started immediately, therefore time taken on each task must be the same

Question 11

Advantages of flow production

Answer 11

Costs per unit of production are reduced through improved work and material flow, suitable for manufacturing large quantities, capital intensive - production is constant and less need for employee training. Produces exactly identical items

Question 12

Disadvantages of flow production

Answer 12

Very long set up time, reliant on high quality machinery, no customisation, uses specialist machinery so investment into this is expensive, there may not be a high demand if the products are identical

Question 13

Cell production

Answer 13

A form of flow production whereby the production line is split up into a series of self contained cells which teams in these cells work together to create one unit of output

Question 14

Cell production often leads to increased productivity due to

Answer 14

Increased motivations - team spirit and added responsibility and specialisation

Question 15

Advantages of cell production

Answer 15

Increases quality, teamwork and motivation

Question 16

Disadvantages of cell production

Answer 16

Depends on staff being well trained or experts in their role

Question 17

Productivity

Answer 17

An important measure of efficiency, how many outputs can be produced from a giver number of inputs of a given period of time

Question 18

How can a business improve productivity

Answer 18

Become more capital intensive, motivate staff, lean production, better capital equipment - reduce waste

Question 19

Factors influencing productivity

Answer 19

Demand p, employee wellbeing, working conditions, amount of capital available to invest

Question 20

What is price competitiveness

Answer 20

More likely in dynamic / competitive markets were cost of production is priority

Question 21

What is non- price competitiveness

Answer 21

More likely where product differentiation is a priority

Question 22

Which type of competitiveness is linked to productivity

Answer 22

Price competitiveness - if productivity increases, unit costs of production falls and firm can reduce price whilst maintaining profit margins

Question 23

What is efficiency

Answer 23

Production at lowest unit costs

Question 24

Average cost per unit =

Answer 24

Total production costs in period / total output in period

Question 25

What is economies of scale

Answer 25

Factors that cause average costs per unit to fall as output increases, larger businesses can be more efficient due to larger economies of scale

Question 26

Why does economies of scale matter

Answer 26

Impacts firms competitiveness, either increases profit by reducing unit costs or reduces price and increases sales

Question 27

What is diseconomies of scale

Answer 27

Factors that cause average cost per unit to rise as output increases

Question 28

Factors that cause average costs per unit to rise as output increases

Answer 28

Communication problems, coordination problems, control problems, motivational problems

Question 29

How do businesses avoid diseconomies of scale

Answer 29

Sharing common inputs over a range of production activities

Question 30

Overall how can a business improve efficiency

Answer 30

Incentives, match tasks to skills, train and develop employees, communicate effectively