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quacksy + elixir > Business: Chapter 4 > Flashcards

Business: Chapter 4 Flashcards

1
Q

Methods of Production

A
  • Lean production
  • Kaizen
  • Just-in-Time (JIT)
  • Cell production
  • Job production
  • Batch Production
  • Flow production
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2
Q

Factors affecting Method of Production

A
  • Nature of product
  • Size of market
  • Nature of demand
  • Size of business
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3
Q

Definition of Productivity

A

The output measured against the input used to create it.

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4
Q

Productivity (Formula)

A

output / quantity of input

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5
Q

Labour Productivity (Formula)

A

output (over given period of time) / number of employees

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6
Q

Ways to increase productivity

A
  • Improve quality of product and inventory control
  • Automation
  • Improve employee training
  • Motivate employees more efficiently
  • Introduce new tech
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7
Q

Benefits of increasing efficiency/productivity

A
  • Reduce inputs with same output level
  • Lower cost per unit (average cost0
  • Fewer workers needed, possibly lower wage costs
  • Higher wages may be paid to workers, more motivation
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8
Q

Definition of Buffer Inventory

A

Inventory held to deal with uncertainty in customer demands and deliveries of supplies.

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9
Q

Definition of Lean Production

A

Techniques used by businesses to cut down on waste and therefore increase efficiency.

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10
Q

7 Types of Waste in Production

A
  • Overproduction
  • Waiting (waste of time)
  • Transportation
  • Unnecessary inventory (waste of space)\
  • Motion (waste of energy)
  • Over-processing (complex machinery for simple tasks)
  • Defects (waste of time + materials)
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11
Q

Benefits of Lean Production

A
  • Less storage of raw materials or components
  • Quicker production of goods or services
  • No need to repair defects or provide a replacement service for a dissatisfied customer
  • Better use of equipment
  • Cutting out some processes, speeding up production
  • Less money tied up in inventories
  • Improved health and safety, leading to less time off work due to injury
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12
Q

Types of Lean Production methods

A
  • Kaizen
  • Just-in-Time inventory control
  • Cell production
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13
Q

Definition of Kaizen

A

A Japanese term meaning ‘continuous improvement’ through the elimination of waste.

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14
Q

Benefits of Kaizen

A
  • Increased productivity
  • Reduced amount of space needed for production process
  • Work-in-progress is reduced
  • Improved layout of the factory floor may allow some jobs to be combined, thereby freeeing up employees to carry out some other job in the factory
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15
Q

Definition of JIT

A

A production method that involves reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the finished product.

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16
Q

Benefits of JIT

A
  • Reduces the costs of holding inventory
  • Warehouse space is not needed, reducing costs
  • The finished product is sold quickly, money will return to the business quickly, helping its cash flow
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17
Q

Definition of Cell Production

A

When the production line is divided into separate, self-contained units (cells), each making an identifiable part of the finished product, instead of having a flow or mass production line.

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18
Q

Benefits of Cell Production

A
  • Improves the morale of employees and makes them work harder
  • More efficient
  • Employees feel valued and are less likely to cause strikes or disruption
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19
Q

Definition of Job Production

A

Where a single product is made at a time.

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20
Q

Advantages of Job Production

A
  • Suitable for personal services and ‘one-off’ products
  • Product meets the exact requirements of the customer
  • Workers have more varied jobs
  • Worker motivation increases, greater job satisfaction
  • Flexible method are used for high-quality goods and services, so a higher price can be charged
21
Q

Disadvantages of Job Production

A
  • Skilled labour is needed, raising costs
  • Costs are higher as it is labour intensive
  • Production takes a longer time
  • Any errors made in the product may be expensive to correct
  • Materials may have to be specially purchased, leading to higher costs
22
Q

Definition of Batch Production

A

Where a quantity of one product is made, then a quantity of another product will be produced.

23
Q

Advantages of Batch Production

A
  • It is a flexible way of working and production cab easily be changed fromm one product to another
  • Still gives variety to workers’ jobs
  • Allows more variety to products which would otherwise be identical (gives more consumer choice)
  • Production is not affected if machinery breaks down
24
Q

Disadvantages of Batch Production

A
  • Expensive as semi-finished products will need to be moved to the next production stage
  • Machinese have to be reset between production batches, delay in production, output lost
  • Warehouse space is needed for raw materials, components, and finished products
25
Q

Definition of Flow Production

A

Where large quantities of products are produced in a continuous process (aka Mass Prodction).

26
Q

Advantages of Flow Production

A
  • High output of a standardised product
  • Costs of making each product is kept low and prices are lower
  • Reduce labour costs and increase effciency
  • Less skilled workers needed for repetitive and specific tasks
  • Low average costs and low prices = high sales
  • Automated production can run for 24 hours
  • No need to move goods around
27
Q

Disadvantages of Flow Production

A
  • A very boring system, little job satisfaction, lack of motivation from employees
  • Significant storage requirements for materials and finished products
28
Q

Definition of Variable Costs

A

Costs that vary directly with the number of items sold or produced.

Examples: material costs, piece-rate labour costs

29
Q

Definition of Total Costs

A

Fixed and Variable Costs combined.
*Can be compared with sales revenue for the period to calculate the profit or loss made

30
Q

Definition of Average Cost per Unit

A

The total cost of production divided by total output.

31
Q

Another way of finding Total Cost

A

average cost per unit x output

32
Q

Definition of Break-Even Level of Output

A

The quantity that must be produced/sold for total revenue to equal total costs (aka Break-Even Point).

33
Q

Break-Even Level of Output (Formula)

A

total fixed costs / (sales price per unit - variable costs per unit)
*revenue = total costs

34
Q

Definition of Margin of Safety

A

The amount by which sales exceed the break-even point

35
Q

Definition of Quality Control

A

The checking of quality at the end of the production process, whether it is the production of a product or a service. It uses quality inspectors as a way of finding any faults.

36
Q

Advantages of Quality Contro

A
  • Tries to eliminate faults or errors before customer receives the product or service
  • Less training is required for the workers as inspectors are employed to check quality.
37
Q

Disadvantages of Quality Control

A
  • Expensive as inspectors need to be paid to check the product or service
  • Identifies the faulty product but doesn’t find why or where the fault has occured
  • High costs if product has to be scrapped or reworked
38
Q

Definition of Quality Assurance

A

The checking for quality standards throughout the production process by employees, whether it is the production of a product or service.

39
Q

Advantages of Quality Assurance

A
  • Tries to eliminate faults or errors at all stages of production before passing on to the next stage
  • Fewer customer complaints
  • Reduced costs if products do not have to be scrapped or reworked or service repeated
40
Q

Disadvantages of Quality Assurance

A
  • Expensive to train employees to check the quality of their own work
  • Relies on employees bein committed to maintaining the standards set
41
Q

Definition of Total Quality Management

A

The continuous improvement of products and processes by forcusing on quality at each and every stage of production.

42
Q

Advantages of TQM

A
  • Quality is built into every part of production and becomes central
  • No customer complaints, brand image improved
  • Reduced costs as products never have to be scrapped or repeated
  • Waste is removed and efficiency increases
43
Q

Disadvantages of TQM

A
  • Expensive to train all employees to check the product or service
  • Relies on all employees following TQM ideology and accepting responsibility
44
Q

Factors affecting the location of a Manufacturing Business

A
  • Production methods and location decisions
  • Market
  • Raw materials or components
  • External economies of scale
  • Availability of labour
  • Government influence
  • Transport and communications
  • Power and water supply
  • Climate
45
Q

Factors affecting the location of a Service Sector Business

A
  • Customers (direct/non-direct)
  • Personal preference of owners
  • Technology
  • Availability of labour
  • Climate
  • Near to other businesses
  • Rent/Taxes
46
Q

Factors affecting the location of a retailing business

A
  • Shoppers (type/number)
  • Nearby shops (competitors? attract shoppers? gap in the market?)
  • Customer parking
  • Availability of suitable vacant premises
  • Rent/Taxes
  • Access for delivery vehicles
  • ## Security
47
Q

Factors a business should consider when deciding which country to move operations to

A
  • New markets overseas
  • Cheaper or new sources of materials
  • Difficulties with labour force and wage costs
  • Rent/Tax consideration
  • Availability of government grants and other incentives
  • Trade and tariff barriers
48
Q

Role of Legal Control

A
  • Encourage businesses to set up and expand in areas of high unemployment
  • Discourage businesses from locating in overcrowded areas or naturally beautiful sites

Two types of measures:
- Planning regulations
- Government grants or subsidies

quacksy + elixir (23 decks)

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