2.4.1 Production, productivity and efficiency

Question 1

name the methods of production

Answer 1

job
batch
flow
cell

Question 2

job production

Answer 2

making on-off items to suit each customer’s individual requirements
-often undertaken by small, specialist businesses

Question 3

benefits of job production

Answer 3

-can charge a higher price as products are unique and tailored to match specifications
-work should be more interesting for staff-less repetitive
-associated with higher quality
-flexible production method

Question 4

drawbacks of job production

Answer 4

-cost per unit is high due to high level of skill and low rates of production
-finding staff with high skill can be hard and wages are high
-requires close consultation with the client

Question 5

batch production

Answer 5

makes a group of productions to one specification at a time, allowing some variation in products, and some specialisation
-each batch goes through one stage of production process before moving onto next stage

Question 6

benefits of batch production

Answer 6

-allows variation in the product
-faster than job production as making a batch at a time is faster
-cost savings can be achieved by buying in bulk
-allows a firm to handle unexpected orders

Question 7

flow production

Answer 7

the continuous production of a single, standardised product
-high volumes of same product

Question 8

benefits of flow production

Answer 8

-cost per unit of production is low through improved work and material flow
-capital intensive so production works constantly
-less need for training and skills

Question 9

drawbacks of flow production

Answer 9

-high initial costs of installing production machinery
-products need to be identical
-less differentiation for the customer as products are mass produced

Question 10

cell production

Answer 10

organising workers into small groups or cells that can produce a range of different products more quickly than job production allows
-teams are given responsibility of doing a part of production process as product moves through assembly lines.

Question 11

benefits of cell production

Answer 11

-group workers allows ideas to be generated within the cell to improve the process
-highly skilled cells can adjust their products to suit customers’ needs

Question 12

drawbacks of cell production

Answer 12

-heavily reliant on people over automation so costs are high
-production volumes will not be as high as flow production

Question 13

what factors determine which production is best for a growing firm?

Answer 13

target market
technology - automated??
resources - finance or people
standards - quality

Question 14

productivity

Answer 14

a measure of the efficiency of the production process, measured as output per worker per period of time

Question 15

labour productivity formula

Answer 15

output per period (units) / number of employees at work

or

sales revenue per employee / number of workers
(selling things)

Question 16

factors that influence productivity

Answer 16

-quality and age of machinery
-skills and experience of workers
-level of employee motivation

Question 17

how does the quality and age of machinery influence productivity?

Answer 17

-old out dated machinery can malfunction or slow down the production process
poor quality machinery may need constant repairs (high maintenance costs)

Question 18

how does the skills and experience of workers influence productivity?

Answer 18

low skilled or less experienced workers may be slower if they are not educated or trained in their field well
-experienced workers can be more productive, but if they have been working their for a while, they may begin to slow down

Question 19

how does the level of employee motivation influence productivity?

Answer 19

low motivation means employees are less willing to produce at a high rate and standard
-they need to feel loyal to business
-poor working conditions or low pay can affect this
-repetitive work is boring and dull

Question 20

what is the link between productivity and competitiveness?

Answer 20

higher levels of productivity means lower unit costs, as the labour cost per unit falls - workers make more
-these lower costs enable the business to cut prices while maintaining the same profit margin

Question 21

efficiency

Answer 21

the extent to which the resources used in a process generate output without wastage

Question 22

how does efficiency differ to productivity?

Answer 22

efficiency considers waste
- wasted time is reduced as productivity rises is a factor, but a highly productive system may come with a quality cost, increasing wastage on faulty items

Question 23

how can quality and age of machinery influence efficiency?

Answer 23

high quality machines mean fewer breakdowns and malfunctions, producing more accurate products= less faulty products produced for waste

Question 24

how can the skills and experience of workers influence efficiency?

Answer 24

skilled staff are likely to make fewer mistakes or can spot mistakes along the way to stop faults further down the line

Question 25

how can the level of employee motivation influence efficiency?

Answer 25

motivation brings pride in work, motivated staff are careful not to make errors, and will lose concentration less often.

Question 26

unit costs

Answer 26

measures the average cost per unit produced, measured over a set time period -they vary over time and as the scale of a business' operation changes

Question 27

unit cost formula

Answer 27

total production costs in period (£) / total output in period (units)

Question 28

economies of scale

Answer 28

the cost advantages that a business can exploit by expanding their scale of production

Question 29

internal economies of scale

Answer 29

arise from the growth of the business itself e.g. technical, specialisation, marketing, managerial

Question 30

external economies of scale

Answer 30

occur within an industry e.g. development of R&D, local authority improving transport network locally, relocation of component suppliers -arise from the industry shifting or expanding as a whole so all competitors benefit

Question 31

labour intensive production

Answer 31

the production process relies heavily on human input with little use of automation. high proportions of its costs relate to the employment of staff

Question 32

benefits of labour intensive production

Answer 32

unit costs can be low in low wage locations labour is a flexible resources- multiskilling and training labour can facilitate continuous improvement

Question 33

drawbacks of labour intensive production

Answer 33

high proportion of total costs risk of poor employer-employee relationship need continuous investment in training

Question 34

capital intensive production

Answer 34

uses high levels of automation, reducing the role of humans as much as possible, replacing them with machines. low labour costs, high costs arise from extensive use of equipment

Question 35

benefits of capital intensive production

Answer 35

greater opportunities for economies of scale potential better productivity better quality and speed lower labour costs and running costs

Question 36

drawbacks of capital intensive production

Answer 36

high initial costs offers little flexibility in terms of product variation potential for less competitiveness due to being old fashioned