3.1 Production Processes

Question 1

What is production (or operations) management?

Answer 1

All the activities in managing the transformation process of the product

Question 2

What is production?

Answer 2

The process of changing inputs into goods and services that can be sold

Question 3

Give some examples of inputs into the
transformation process

Answer 3

• Raw materials
• Labour services
• Energy

Question 4

What are the three stages of the production process?

Answer 4

Inputs, transformation, outputs

Question 5

What is job production?

Answer 5

A method of production whereby a product is produced that meets specific customer needs

Question 6

Give some examples of job production

Answer 6

• Garden design
• Tailors
• Personal trainers
• Restaurants

Question 7

What are the benefits of job production?

Answer 7

• High quality products
• Products made to specific requirements of the customer
• Higher prices can be charged
• Greater job satisfaction for workers, as they are involved in all stages of production process
• Easily differentiate from competitors

Question 8

What are the drawbacks of job production?

Answer 8

• Higher unit costs
• Labour intensive process, so machinery is not suited to this method
• Requires skilled employees who may demand higher wages or training

Question 9

What is flow production

Answer 9

When an item moves continuously from one stage of the process to another

Question 10

What are the advantages of flow production

Answer 10

• Produce on large scales
• Less labour than job production
• Workers can specialise and become more efficient
• Production lines can operate 24/7 if necessary
• Consistent, standard quality
• Lower unit costs

Question 11

What are the disadvantages of flow production

Answer 11

• Production can be inflexible, due to use of machinery
• Jobs are repetitive for staff and can lower motivation
• Initial purchase and set up costs can be high
• Breakdowns can result in downtime/inefficiencies
• Lower skilled workers required may result in higher labour turnover
• Products may be too similar to rivals

Question 12

What is specialisation

Answer 12

When individuals focus on a limited number of tasks

Question 13

What is technical economies of scale

Answer 13

When cost per unit falls as a result of businesses using machinery in production

Question 14

What is unit cost and how do you work it out

Answer 14

The average cost of each unit, that is the total costs of producing products divided by the number of products produced

Question 15

What is the efficiency of a business

Answer 15

How well a business uses its resources to produce goods and services

Question 16

How can you measure the efficiency of a business

Answer 16

By looking at the cost per unit; if a business produces output using relatively few inputs, it is regarded as efficient and will have low cost per unit

Question 17

What does the efficiency of a business depend on

Answer 17

• How well employees are managed
• How good suppliers are
• Investment in machinery and technology
• The way in which products are produced

Question 18

What is lean production

Answer 18

An approach to production that aims to minimise wasted resources

Question 19

What is waste

Answer 19

Unwanted materials from production or faulty and unsalable products which are of little value

Question 20

What are the different forms of waste in a business

Answer 20

• If there is too much supply and not enough demand
• Wasted time and inefficiency
• Faulty products which have to me re made
• Holding stocks

Question 21

What problems does holding stock cause for a business

Answer 21

• Expensive due to warehouse costs for storage
• Products could get damaged or stolen
• Opportunity cost of money which could have been spent on other things instead of storing stock

Question 22

What is Kaizen

Answer 22

Continuous improvement, or an approach to production that aims to achieve from a series of small steps

Question 23

How does lean production require employees to be more involved in helping a business to improve

Answer 23

• Managers must work closely with employees to make sure relationships between them are good to prevent stoppages, as with JIT, disruption can be damaging
• Kaizen requires employees to find better ways of doing things, so they need to be motivated
• To avoid waste, employees need to check quality of every stage of the process, so they need the right training

Question 24

What is procurement

Answer 24

The whole process of managing the ordering and receipt of the goods or services in the business

Question 25

What does procurement involve

Answer 25

• Deciding what is needed
• Selecting suppliers
• Terms of payment
• Negotiating contracts between the business and its suppliers
• Managing how goods are ordered and received
• Managing logistics

Question 26

What does stock management include

Answer 26

• Stocks of raw materials required to produce the finished goods
• Stocks of finished goods needed to meet demand
• Staffing in service industries e.g. checkout operators in a supermarket

Question 27

What is purchasing

Answer 27

The process of buying the goods and services needed for the production to take place