Booklet 7: Productivity and Investment

Question 1

What is Job production?

Answer 1

Term used to describe a situation where the firm produces a one-off product for a particular customer.

Question 2

Advantages of Job production.

Answer 2

1. Products are tailor-made for their customers.
2. Can often charge a higher price.
3. Easier to motivate workers.

Question 3

Disadvantages of Job production.

Answer 3

1. Production process can be quite slow.
2. It requires specialist labour, harder to find and more expensive.
3. Increases the average cost of production, no opportunities from economies of scale.

Question 4

What is Batch production?

Answer 4

Batch production is the production of batches of similar products in large quantities.

Question 5

Advantages of Batch production.

Answer 5

1. Allows use of economies of scale.
2. It reduces the need for a skilled and flexible workforce.
3. Flexibility in production as machines can be reset.

Question 6

Disadvantages of Batch production.

Answer 6

1. Products cannot be customised.
2. More storage space is required to accommodate stock.
3. Less variety of work, tasks may not be motivating affecting morale and productivity of workers.

Question 7

What is Flow production?

Answer 7

Is a process of passing componenets/partly produced products from one stage of production to another in a regular flow.

Question 8

Advantages of Flow production.

Answer 8

1. Robots can work 24/7
2. Capital intensive (wide use of machinery)
3. Benefit from economies of scale.

Question 9

Disadvantages of Flow production.

Answer 9

1. Loss of flexibility- products are all the same.
2. Very expensive to set up.
3. Repetitive nature of the work- less likely to be motivated which may affect productivity.

Question 10

What is Cell production?

Answer 10

Cell production is a situation in which the flow production line is subdivided into a number of self-contained units. Each cell (or team) is responsible for a part of the finished product and, instead of each team member undertaking only one specific task, all team members are skilled at a number of likes, which provides a means for job rotation.

Question 11

Advantages of Cell Production.

Answer 11

1. Greater worker motivation, team working, and variety of work.
2. Quality improvements- ‘ownership’ for quality.
3. Workers become multi-skilled.

Question 12

Disadvantages of Cell Production.

Answer 12

1. Does not allow for the same intensive use of machiney as with flow production.
2. Switching to cell production may lead to inefficiencies.

Question 13

What is Lean Production?

Answer 13

Lean Production is a method of production that attempts to eliminate waste while maintaining quality and/or minimise activities that do not add value to the production process.

Question 14

Advantages of Lean Production.

Answer 14

1. Reduction in waste.
2. Multi-skilled staff with each having increased participation, and increasing motivation.
3. Faster new product development as flexible production methods allow a firm to be able to change products quickly.
4. Should speed up production.

Question 15

Disadvantages of Lean Production.

Answer 15

1. Takes time and money.
2. It May require additional training.
3. The advantages of bulk buying are lost.
4. It requires a high degree of delegation and organisation.

Question 16

What is productivity?

Answer 16

Productivity describes a measurement of the effiency of production in a business.

Question 17

What are the factors that affect productivity in a business?

Answer 17

1. Finance
2. Human resources
3. Production (plan)
4. Technical
5. Organisational (efficient)
6. Motivation of workers.
7. Education and training
8. Capital productivity (machinery)
9. Labour flexibility
10. Management

Question 18

How does new machinery affect productivity?

Answer 18

1. To achieve economies of scale.
2. Improves health and safety within a business.
3. It speeds up production and reduces downtime.
4. It enables a business to save money.
5. It improves the quality of products.

Question 19

Hows do Skills and Training affect productivity?

Answer 19

1. Maximise efficiencies
2. To achieve increases in profitability and return on investment.
3. To enusre employees are sufficiently well trained in the use of modern technology in production processes.

Question 20

Reasons why a business would undertake investment?

Answer 20

1. Ensure the use of updated/ modern equipment.
2. Improve efficiency in the business.
3. Increase profitability through a reduction of labour costs.

Question 21

Reasons why a business would undertake innovation?

Answer 21

1. Ensure that the product range is relevant and meets the need of customers.
2. Ensure that product is produced in the most efficient way possible.
3. Ensure adoption of ‘best practice’ methods across the business.

Question 22

Reasons why a business would undertake Research and Development (R&D)?

Answer 22

1. lead to technological innovation. (Best in class)
2. Attainment of competitive advantage.
3. Build strong brand reputation.
4. Be a prerequisite if customers perceive the business as innovative.

Question 23

What are external factors influencing Research and Development (R&D)?

Answer 23

1. The Economy
2. Competitor Actions.
3. Technological change in Business
4. Social & Political Change.

Question 24

What are internal factors influencing Research and Development (R&D)?

Answer 24

1. Culture of a Business.
2. Business Corporate Objectives.
3. Financial Drivers
4. Human Resources
5. Operational Issues.