P2- Hw 17 Production, Productivity and Efficiency Flashcards
Job production
Involves firms producing items that meet specific requirements of customers
- one off, unique products
- made one at a time
E.g. wedding cake, wedding dress
Advantages of job production
- customer requirements and changes can be handled
- usually higher quality
- can charge higher prices
- more motivation- job satisfaction
Job production disadvantages
- cost per unit higher
- labour intensive (higher labour costs)
Close consultation with client - reliant on high skill
Batch production
Where products are made in groups with a series of tasks performed on each group
E.g. houses, cupcakes, clothes
Advantages of batch production
- cost savings from bulk buying
- allows customers some choice
- specialist staff at each stage
- firms can handle unexpected orders
Disadvantages of batch production
- takes time to switch between batches
- maintain higher stocks of raw material
- tasks may become repetitive and boring
- size of batch dependent on capacity allocated
Flow production
Producing as many as possible of an identical product continuously on an assembly line
Advantages of flow production
- can manufacture on large scale
Disadvantage of flow production
Takes long time to set up assembly line
Cell production
When a group is given responsibility for one part of production
Advantage of cell production
- increases quality and motivation of staff
Disadvantage of cell production
Staff must be well trained or it won’t work
Productivity
The ratio between output and input
Productivity formula
Units of output
————————
Units of input
Production
The transformation of resources into products
Factors affecting productivity
- technology, skills needed, capital needed
Efficiency
Producing units at the lowest possible cost
Labour intensive production
When a product is mainly produced using people rather then machines
Capital intensive production
When the processes require a lot of capital
Job production
involves firms producing items that meet the specific requirements of the customer
Batch Production
where products are made in groups with a series of tasks performed on each group
Flow production
producing as many as possible of an identical product continuously on an assembly line
Cell production
when groups of workers are given responsibility for a part of production
Productivity
output per unit of input
Competitiveness
when two or more businesses are selling similar products and therefore targeting the same customers; which one can beat the other
Efficiency
producing units at the lowest possible price
Labour intensive production
when making a product mostly uses people rather than machinery
Capital intensive production
when making a product uses a lot of capital
