2.4.1 Production, Productivity And Efficiency

Question 1

What is production?

Answer 1

Production is the transformation of resources into finished goods/services

Question 2

What are the 4 methods of production?

Answer 2

Job, Flow, Batch ,Cell

Question 3

What is job production?

Answer 3

• Manufactures one product at a time as ordered by the customer

Question 4

What are the advantages and disadvantages of job production?

Answer 4

Advantages:
- Higher quality
- Motivated and highly skilled workers
- Customised products can be produced

Disadvantages:
- Production is slow
- High labour costs

Question 5

What is flow production?

Answer 5

• Continuous manufacturing of products on a production line

Question 6

What are the advantages and disadvantages of flow production?

Answer 6

Advantages:
- Lower unit costs because of EoS
- Rapid production
- Highly automated - capital intensive

Disadvantages:
- Customisation is difficult
- capital equipment is expensive

Question 7

What is batch production?

Answer 7

Groups of the same product produced as a batch e.g. bakery

Question 8

What are the advantages and disadvantages of batch production?

Answer 8

Advantages:
- Workers can specialise
- Production can take place as the previous batch starts running out

Disadvantages:
- Requires careful coordination
- Money is tied up in stock
- Completed products need to be stored

Question 9

What is productivity?

Answer 9

Productivity is the output per input per hour

Question 10

What is the labour productivity calculation?

Answer 10

Output/Number of workers

Question 11

What are the factors that influence productivity?

Answer 11

• Employee motivation
• Skills education & training staff
• Business organisation & working practices
• Investment in capital equipment

Question 12

What is efficiency?

Answer 12

The ability of a business to use its production resources as cost-effectively as possible

Question 13

What is the formula for efficiency?

Answer 13

(Total costs / Number of units)
& all the profit margins

Question 14

What are the factors that affect efficiency?

Answer 14

• Standardisation of the production process
• Relocation or downsizing
• investment in capital equipment
• Organisational restructuring
• Outsourcing
• Adaptation of lean production techniques
  
  • Kaizen - constant improvements
    -Just in time - holding little or no stock to minimise costs

Question 15

What is labour- intensive production?

Answer 15

Labour- intensive production uses physical labour in the production of goods/services

Question 16

What is capital intensive production?

Answer 16

Capital intensive production uses machinery and technology in the production of goods/services

Question 17

What are the advantages and disadvantages of capital intensive production?

Answer 17

Advantages:
- Low cost production
- Machines are precise
- Machines can run without breaks

Disadvantages:
- Significant set-up and maintenance costs
- Breakdowns can delay production
- may not be flexible production

Question 18

What are advantages and disadvantages of labour intensive production?

Answer 18

Advantages:
- Low cost where labour costs are low
- Provides opportunities for workers to be creative
- Workers are flexible

Disadvantages:
- Workers may be unreliable
- Incentives may be needed to motivate staff
- Training costs can be significant