Lesson 17 - Production of goods and services

Question 1

What is labour and capital intensive

Answer 1

Labour = Many workers, few machines
Capital = Many machines, few workers

Question 2

Define productivity

Answer 2

Productivity is the output measured against the inputs used to create it.

Question 3

Productivity formula

Answer 3

Quantity of outputs/Quantity of inputs

Question 4

Labor productivity formula

Answer 4

Output (Over a given period of time) / Number of employees

Question 5

List 3 ways of increasing productivity

Answer 5

• Introducing automation
• Improving the layout of the machines to reduce wasted time and therefore increase efficiency
• Improving labors skills by training so they have more productive techniques of working

Question 6

List 3 benefits of increasing efficiency

Answer 6

• Higher wages for workers increases motivation
• Lowers costs per unit
• Fewer workers may be needed

Question 7

Define the buffer inventory level

Answer 7

The buffer inventory level is the inventory held to deal with uncertainty in customer demands and deliveries of supply.

Question 8

Define reorder level

Answer 8

When inventories get to a certain level

Question 9

Define lean production

Answer 9

Lean production cuts out any activities which do not add value for the customer.

Question 10

List seven types of waste in production

Answer 10

• Defects
• Over processing
• Overproduction - producing goods before being ordered
• Motion
• Waiting -When goods arent being moved
• Unnecessary inventory
• Transportation - moving goods around unnecessarily

Question 11

3 Benefits of Lean production

Answer 11

1. Better use of equipment
2. Less storage of raw materials
3. Quicker production of goods or services

Question 12

What is Kaizen.

Answer 12

Kaizen means continuous improvement in Japanese.

Question 13

List 2 Advantages of Kaizen

Answer 13

• Increase productivity

- Reduced amount of space needed for production process

Question 14

What does Just in time production do and its advantages

Answer 14

JIT focuses on reducing or virtually eliminating the need to hold inventories.
Advs:
1.Reduces costs of holding inventories
2.Warehouse space is not needed, reduces costs
3.The finished product is sold quickly so money will come back to the business faster helping cash flow

Question 15

What does Cell production do and its advantages

Answer 15

Cell production, production line is divided into separate self contained cells
Advs: -Improves morale of employees
-Makes them work harder so they become more efficient

Question 16

What is Job production and examples of it

Answer 16

Job production is where a single product is made at a time
Examples:
-Manufacture machines for other businesses
-Made to measure suits
-Bridges

Question 17

List 3 Advantages of Job production

Answer 17

• Workers often have more varied jobs so they dont get bored
• The product meets the exact requirements of the customer
• More varied work increases employee motivation giving them greater job satisfaction.

Question 18

List 3 Disadvantages of Job production

Answer 18

1. Skilled labour is often used
2. The costs are higher because it is often labour intensive
3. Production often takes long time

Question 19

What is Batch production and its examples

Answer 19

Batch production is where a quantity of one product is made then a quantity of another Item will be produced.
Examples:
-Several houses built together
-Small bakery
-Furniture production

Question 20

List 3 Advantages of Batch production

Answer 20

1. It is a flexible way of working and production can easily be changed
2. It still gives some variety worker’s job.
3. Production may not be affected to any great extent if machinery breaks down

Question 21

List 2 Disadvs of Batch production

Answer 21

1. It can be expensive as semi finished or finished products will need moving about
2. Machines have to be reset between production batches which means there is a delay in production and output is lost

Question 22

What is Flow production and its examples

Answer 22

Flow productuon is where large quantities of a product are produced in a continuous process.
Examples:
Cars,cameras, TVs

Question 23

List 3 Advantages of Flow Production

Answer 23

1. There is a high output of a standard product
2. Costs are kept low and therefore prices are lower
3. Automated production line can operate 24 hours a day

Question 24

List 3 Disdvantages of Flow Production

Answer 24

1. It is a very boring system for the worker, so there is little job satisfaction, leading to a lack of motivation for employees
2. The capital costs of setting up the production line can be very high
3. If one machine breaks down, the whole production line will have to be halted.

Question 25

List the 4 factors affecting which method of production to use

Answer 25

1. Nature of product, If product is unique use job prod, If product is masses use flow
2. Size of market, If demand is higher and more products will be sold but not in very large quantities, then batch production, if not use flow.
3. Nature of demand , High is flow, medium is batch, low is job
4. Size of Business, Large capital = Flow
   No capital = Job and batch

Question 26

List 3 Advantages of New technology

Answer 26

1. Productivity is greater as new production methods are used
2. Greater job satisfaction stimulates workers as routine and boring jobs are now done by machines
3. The Information that is available to managers is much greater and this results in better and quicker decision making

Question 27

List 2 Disadvantages of New technology

Answer 27

1. Unemployment rises as machines/computer replace people on factory floor
2. New technology is changing all the time and will often become outdated quite quickly and will need to be replaced if the business is to remain competitive .