2.4.1 Method Of Production Flashcards
Job production
The production of one off items to meet the needs of each individual customers, often undertaken by small, specialist businesses
Examples of job production
Artists, dental technicians, aircraft, architects
Advantages of job production
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
Disadvantages of job production
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
Batch production
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
Examples of batch production
Printers - certain amount of newspapers, Baker - certain amount of loaves of bread, factory - certain sized shirts
Aims of batch production
Concentrate skills , achieve better use of equipment and so will produce good quality products more economic than,naugctauring individually
Advantages of batch production
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
Disadvantages of batch production
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
Flow production
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
Advantages of flow production
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
Disadvantages of flow production
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
Cell production
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
Cell production often leads to increased productivity due to
Increased motivations - team spirit and added responsibility and specialisation
Advantages of cell production
Increases quality, teamwork and motivation
Disadvantages of cell production
Depends on staff being well trained or experts in their role
Productivity
An important measure of efficiency, how many outputs can be produced from a giver number of inputs of a given period of time
How can a business improve productivity
Become more capital intensive, motivate staff, lean production, better capital equipment - reduce waste
Factors influencing productivity
Demand p, employee wellbeing, working conditions, amount of capital available to invest
What is price competitiveness
More likely in dynamic / competitive markets were cost of production is priority
What is non- price competitiveness
More likely where product differentiation is a priority
Which type of competitiveness is linked to productivity
Price competitiveness - if productivity increases, unit costs of production falls and firm can reduce price whilst maintaining profit margins
What is efficiency
Production at lowest unit costs
Average cost per unit =
Total production costs in period / total output in period
What is economies of scale
Factors that cause average costs per unit to fall as output increases, larger businesses can be more efficient due to larger economies of scale
Why does economies of scale matter
Impacts firms competitiveness, either increases profit by reducing unit costs or reduces price and increases sales
What is diseconomies of scale
Factors that cause average cost per unit to rise as output increases
Factors that cause average costs per unit to rise as output increases
Communication problems, coordination problems, control problems, motivational problems
How do businesses avoid diseconomies of scale
Sharing common inputs over a range of production activities
Overall how can a business improve efficiency
Incentives, match tasks to skills, train and develop employees, communicate effectively
