igcse business section 4 Flashcards
a typical manufacturing business will have
-a factory manager: responsible for quantity and quality
-purchasing manager: provides material required
-research and development manager: design and testing
productivity
the output measured against the input used to create it
output/quantity of input
labour productivity
output/number of employees
how to increase productivity and efficiency
-improve quality of product and inventory control to reduce waste
-automation
-replace employees with machines
-motivate employees effectively
-new tech
benefits of increasing efficiency/ productivity
-reduced input needed for the same output level
-high wages paid, to increase motivation
-fewer workers, lower costs
-lower costs per unit
buffer inventory level
the inventory level held to deal with uncertainty in customer demand and deliveries of supplies
lean production
those techniques used by businesses to cut down on waste and therefore increase efficiency
types of wastes
-overproduction
-unnecessary inventory
-transportation
-waiting
-motion
-defects
-overprocessing
benefits of lean production
-less storage
-better use of eq
-quicker production
-cuts on processes
-improved health and safety
-no need to repair defects and replace
-less money tied up to inventory
kaizen
japanese term meaning continues improvement through the elimination of waste
adv of kaizen
-improved layout for employees
-work in progress reduced
-reduced space needed
-increased productivity
just in time
production method that involves reducing or virtually eliminating the need to hold inventory of raw materials or unsold inventories of unfinished product
adv of JIT
-warehouse is not needed
-reducing cost of holding inventory
-sold quick so money will come back more often
job production
a single product is made at a time
batch production
a quantity of one product is made then a quantity of another item will be produced
flow /mass production
where large quantities of a product are produced in a continuous process
adv of job prd
-increase employee motivation
-varied job
-suitable for personal services
-meets exact requirment
-flexible and used for high quality goods and services so higher prices
disadv of job prd
-skilled labour so higher costs
-labour intensive
-production takes long time
-errors are expensive
-special materials, higher costs
adv of batch prd
-flexible way of working
-somd variety
-gives consumers choices
-production is not affected if machinery breaks down
disadv of batch prd
-machines have to be reset so there is a delay
-warehouse space is needed
-can be expensive, needs moving
adv of flow prd
-capital intensive, reduced labour costs
-business may require only relatively unskilled workers, little training
-high output of standarised products
-operate 24/7
-EOS
-low costs, low prices, high sales
-saves time
disadv of flow prd
-boring system, lacks motivation
-high storage requirements
-capital costs of production line is high
-if machines break, all production is stopped
factors affecting which method
-nature of the product
-nature of demand
-size of business
-size of market
how tech keeps costs and prices low and improves production
-automation (controlled by computers)
-mechanisation (operated by people)
-computer aided design
-computer aided manufacture
-computer integrated manufacturing (cad and cam)
how tech improved electronic payments
-EPOS: operators scans barcode individually
-EFTPOS: all info read from card and sent to bank
-contactless payments
adv of new tech
-high tech products
-greater info available
-quicker communication and less paperwork
-higher productivity and efficiency, reduces costs
-not boring greater job satisf
-must offer training so more motivation
-better quality products
disadv of new tech
-unemployment rise
-employees may reject changes
-may become outdated and needs to be replaced
-expensive
why managers need to think abt costs
-could be compared with revenue to calculate whether the business is making a loss or profit
-costs of diff locations compared and decide whats best
-help decide on prices
fixed/overhead costs
costs which do not vary in the short run with the number of items sold or produced
variable costs
costs that change directly with the number if items sold or produced
total costs
fixed and variable costs combined
ave costs x output
average costs per unit/ unit cost
total cost of the production divided by total output
