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January Business Mock > 2.4.1 Production, Productivity, Effciency > Flashcards

2.4.1 Production, Productivity, Effciency Flashcards

1
Q

Methods of production

A
  • job
  • batch
  • flow

Can take place in different ways depending on type and quantity required of product

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2
Q

Production

A

The transformation of resources into goods or services

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3
Q

Production process

A
  1. Input (primary) resources, C.E.L.L
  2. Production /Transformed (secondary) processing, manufacturing , fabrication
  3. Output (tertiary) goods/service, wastage, by-products
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4
Q

C.E.L.L

A

Capacity
Equity
Land
Labour

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5
Q

Factors affecting which method of production chosen

A
  1. capital required
  2. scale/output/type of business
  3. availability/supply of skilled labour
  4. demand/nature/type of product

capital
business
labour
product

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6
Q

Job production:

A

specific requirements of customer

  • labour intensive - high quality
  • unique, individuals, tailor made

E.g. wedding cake/dress, architecture

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7
Q

Adv & Dis of job production

A

ADV;
tailored = price
interesting = motivate

DIS:
cpu high (high skill, low production rates)
high pay

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8
Q

Batch production

A

groups = series of tasks performed on each group

E.g. food industry (money is in stock)

  • concentrate skills
  • capital intensive
  • better use of equipment = good quality products more economically than manufacturing
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9
Q

Adv & Dis of batch production (4 THINGS)

A

ADV:
variation in product
quicker than job

DIS:
more costly than job (specialist machinery)
cpu higher than flow (machines adjust between batches)

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10
Q

Flow/Mass production

A
  • identical product continuously (no stopping=shift work) , assembly line
  • mass market products
  • high automated

E.g. drinks and tvs and mobile phones

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11
Q

ADV & DISs of Mass/flow production

A

ADV:
unit labour costs low
huge volumes = meet huge demand mass mkt

DIS;
high initial costs (production machinery)
identical products (no tailoring)
interruptions in assembly line = down time

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12
Q

Obsolete

A

When something is producing no value to the business

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13
Q

Specialisation

A

work is divided into separate tasks or jobs

allow workers to become skilled at one of them

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14
Q

Productivity formulae

A

Outputs divided by input per time period

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15
Q

How does a business growing affect production? (4 THINGS)

A
  1. employee staff/invest in machinery = capital intensive
  2. scale of production increases
  3. invest in new factories
  4. consider off-shoring
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16
Q

Production in action

A
  • business may use a combination of all 3 types of production
  • at different times
  • depends on products/customer needs
17
Q

Which production method is best for growing a firm depends on: (4 THINGS)

A
  1. target market
  2. technology
  3. resources
  4. standards
18
Q

CELL

A

teams
each cell= responsibility for production of complete units of output
(work as team-achieve)
-set contained cells
-members work as team ensue quality and goals met

19
Q

ADVS & DIS of CELL production

A

ADV:

  1. ideas generated in cell for improvements in process (communication)
  2. small highly skilled = adjust product to suit customer needs = productivity
  3. ownership = motivation

DIS:

  1. reliant on people = high costs
  2. lower production volumes than flow
  3. conflicts
  4. managers resent giving away authority
20
Q

Concept of LEAN production & ways of becoming lean

A

Japanese approach to production focused on eliminating all forms of waste (looking at ways of improving)

  1. CELL
  2. JIT
  3. Kaizem
  4. TQM
21
Q

Lean production principals

A
  • pull system
  • one piece flow
  • tact (how to manufacture to reach demand)
  • zero defects (self assurance/ self check)
22
Q

Productivity

A
  • important measure of efficiency
  • how many outputs produced from a given number of inputs over a period of time

Output/units of labour over time period (divided by)output/units of capital

23
Q

How to minimise input without decreasing output

A
  • efficient workers
  • training
  • motivate staff (non financial and financial incentives)
  • become more capital intensive
24
Q

How to increase output without increasing input

A
  • reduce waste - efficiency
  • increase capital intensity
  • change method of production
25
Q

How to improve productivity

A
  • capital intensive
  • motivate/train staff (expensive/may not improve productivity)
  • lean production
  • better capital equipment (demotivate workers = replaced)
  • better quality raw materials - reduce time waste on rejected
  • improved organisation (may resist changes = fear of job loss)
26
Q

Factors influencing productivity

A
  • demand to be fulfilled
  • leadership style
  • working conditions
  • training levels
  • amount of capital to invest
  • type of business/how capital intensive
27
Q

Link between competitiveness and productivity

A

2 types of competitiveness:
1. PRICE (closer link):more likely in dynamic/competitive markets where cost of production is priority

2.NON PRICE; more likely in Monopoly/Oligopoly markets where production differentiation is a priority

28
Q

Monopoly market

A

market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

29
Q

Oligopoly market

A

small number of firms, none keep the others significant influence

monopoly = 1
duopoly = 2
oligopoly two or more

30
Q

Efficiency

A

Production at lowest unit cost

Acpu calculated; total production cost in period divided by total output in period (units)

31
Q

Acpu

A

Average cost per unit

32
Q

Economies of scale

A

Factors that cause Acpu (efficiency) to fall as output increases

33
Q

MES;

A

Minimum efficient scale

  • point where you are most efficient
  • most output for lowest cost
34
Q

Economies of scale matter because

A
  • impact firms competitiveness - lower interest rates for larger amounts
  • increase profit by :reducing unit cost (more funds for investment or owners) Or reduce price (more sales, passing reduced cost onto consumer) = barrier to entry for other firms wishing to enter market
35
Q

Diseconomies of scale

A

Factors that cause acpu to rise as output increases

36
Q

Why do bigger businesses start to experience problems

A
  1. communication
  2. objectives
  3. motivation/support
  4. internal politics
  • communication is harder = mistakes = reduces productivity
  • diff branches/departments = own obj
  • motivation is lower = less supported (mistakes could affect productivity)
  • cause internal politics
37
Q

How to combat diseconomies of scale

A

-invest in electronic forms of communication - more staff to control, have regular communication times

-rewards (performance related pay), appraisal performance review, -non financial = training, team building social events
Fringe benefits.(e.g. company car)
management by objectives

38
Q

Increase efficiency

A
  • efficient resource allocation
  • adapt production (LEAN) - no waste (JIT production)
  • capital intensive (nw technology)
  • incentives = motivation
  • lower cost per unit (bulk buy)
  • introduce standardisation
  • outsourcing
  • delayering, downsizing, relocating

January Business Mock (15 decks)

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