Chapter 18 - Production of Goods and Services

Question 1

productivity definition

Answer 1

how efficiently outputs are made

Question 2

productivity formula

Answer 2

output / quantity of input

Question 3

labour productivity formula

Answer 3

output / number of workers

Question 4

capital productivity formula

Answer 4

output / number of machines

Question 5

what happens to costs when productivity increases? This leads to?

Answer 5

cost decreases which leads to less competition and less salary for workers

Question 6

Inventory definition

Answer 6

resources needed to make something

Question 7

raw materials

Answer 7

things in its basic form

Question 8

work in progress

Answer 8

some work done but not finished

Question 9

finished goods

Answer 9

final product

Question 10

what are 3 disadvantages of having stocks?

Answer 10

-lots of money is spent on inventory
–>storage cost increases
–>security cost increases
–>wastage is made
-no stocks in not enough inventory

Question 11

lean production

Answer 11

producing more goods using less resources

Question 12

what are 4 advantages of using lean proudction

Answer 12

-cuts down wastages
-quality doesnt drop
-efficiency increases
-few resources are used
-faster because useless processes are cut off
-higher trained workers increases efficiency
-savings because less is used

Question 13

how is lean production achieved

Answer 13

kaizen

Question 14

kaizen definition

Answer 14

continuous improvement

Question 15

3 ideas of kaizen

Answer 15

-continuously trying to be better
-making things simple to minimize wastes
-never be satisfied with what you have, always try to improve

Question 16

2 disadvantages of lean production?

Answer 16

-If too many goods are not sold in time, wastages is made so storage is needed
-if supplies dont arrive on time, work cannot be done