Production Flashcards
Define Batch Production
A certain amount of a product is made and then production changes to make another.
Advantages of Batch Production
- produce multiple types of a product
- can use trends
- less likely to have excess supply
Disadvantages of Batch Production
- lots of downtime
- batch size is capacity allocated
Define Mass Production
A continuous flow of producing.
Advantages of Mass Production
- constantly producing products
- benefit from EOS
Disadvantages of Mass Production
- can’t change the product
- employees become demotivated due to boredom
- high set up costs
Define Job Production
Products made to fit customer requests/wants.
Advantages of Job Production
- high pricing so high potential profits
- repeat custom
- USP
- less labour
Disadvantages of Job Production
- highly skilled workers
- so potentially higher costs
- less custom due to high prices
- cash flow could be a problem (need deposits)
Define Process Production
Involves a series of processes which raw materials go through, the end result being a large quantity of finished product.
Advantages of Process Production
- automated production so reduces unit cost
- large quantities produced
- consistent quality
Disadvantages of Process Production
- heavy investment
- difficult if production is stopped
- can’t make different versions of the product
Factors Affecting Choice Of Production
- nature of the product
- seasonality
- scale of production
- sources of finance available
- lifetime of product
- size of workforce
Define Cell Production
Where workers are organised into multi-skilled teams and each team is responsible for a particular part of the production process.
Advantages of Cell Production
- lead to increased efficiency as workers are knowledgeable and skilled
- increased motivation as employees are using their skills
- cause workers to become multi skilled
- improves communication
- quality improves due to employees working together
Disadvantages of Cell Production
- cost implication due to training of employees
- productivity must be high for it to work
- only work if Working culture is appropriate (e.g. proactive employees)
Define Division of Labour
Allocation of labour to specific tasks.
Define Specialisation
Where workers become skilled within a specific area.
Define Critical Path Analysis
Process that allows overall time of project to be calculated.
Advantages of CPA
- helps reduce risk of complex projects
- encourages careful assessment
- decision AND planning tool
- ordering can be made more efficient
Disadvantages of CPA
- based on estimation and assumptions
- does not guarantee success of the project
- often complex when there are lots of tasks
- diagrams alone don’t ensure the efficient working of the operation
How do you calculate Earliest Strat Time (EST)
EST = total time taken for previous activity
e.g. task 1 takes 2hrs, task 2 takes 4hrs task 3 can start when?
answer = 6hrs in
How do you calculate Latest Finish Time (LFT)?
LFT = subtract task’s durations n from previous tasks LFT
e.g. task 8 LFT is 24hrs and task 7 takes 4hrs, what is task 7’s LFT?
answer = 20hrs
How do you calculate Total Float?
TOTAL FLOAT = LFT - EST
How do you calculate FREE FLOAT?
EST (next activity) - duration - EST
How do you calculate PERT ANALYSIS?
(Optimistic time + 4 x likely time + pessimistic time)/6
Define Gantt Chart
A graphical representation of the order and duration of tasks.
Advantages of Gantt Charts
- visual representation
- easy to monitor
- see what is happening
- shows time and resource allocation
Disadvantages of Gantt Charts
- doesn’t show critical activities
- cannot see EST or LFT
- can not calculate floats
- doesn’t allow for external factors
How do you calculate Labour Productivity?
labour productivity = output/number of employees
How to Increase Productivity
- train employees
- improve motivation
- better capital equipment
- increase quality control checks
- set targets
Define Economies of Scale
Unit cost falls due to increased output.
Define Technological Economies
Larger businesses can afford to best in expensive and specialist capital machinery.
Define Purchasing Economies
Larger businesses can buy in bulk and therefore receive discounted prices.
Define Marketing Economies
Larger businesses can spread its advertising/marketing budget over a larger output.
Define Specialisation Economies
Larger business can split complex production processes into separate tasks to boost productivity.
Define Managerial Economies
Larger businesses can afford specialist employees to versed production.
Define Financial Economies
Larger businesses are usually seen as more “ credit worthy” and can access more credit facilities, with better rates of borrowing.
Define Network Economies
Adding one more user to the network costs next to nothing but the affects could be huge as the new user can interact and share ideas with existing members.
Define Risk-Bearing Economies
Larger businesses can afford to take risks as the damage is likely to be minimal.
Define Productivity
The amount of output per given unit over a period of time.
How do you calculate Productivity?
productivity = output/input
Define Diseconomies of Scale
Occur when a business grows so large that the cost per unit increases.
Define Poor Communication
As business expands, communicating between department becomes more difficult.
Define Lack Of Motivation
Workers may feel more isolated and less appreciated in a larger business so loyalty and motivation may diminish.
Define Loss of Direction and Coordination
In a larger business, it’s harder to ensure all workers are working towards the same goal; harder to control employees.
Define Poor Organisation
As the business grows, ,amateurs may loose control gear employees and working areas may become harder to supervise.
Define External Economies of Scale
Occur outside of a firm but within an industry.
Define Capacity Utilisation
The percentage of total capacity that is actually being achieved in a given time.
How do you calculate Capacity Utilisation?
(actual level of output/maximum possible output) x 100
What capacity utilisation do businesses aim for?
85%-90% allows for fluctuations in demand and breakdowns in machinery.
How to Improve Capacity Utilisation
- increase demand
- differentiate the product
- reduce maximum capacity
Advantages of Capacity Utilisation
- fall in average costs
- less wastage
- increased profits
- increased competitiveness
Disadvantages of Working at 100% Capacity
- can’t deal with maintenance issues or breakdowns
- can’t increase productivity to deal with demand
- lots of pressure
Define Stock Control
The processes and controls used by a business to ensure that it has sufficient stock for its purpose.
What are the 3 types of stock?
- finished goods
- raw materials
- work in progress
Define Lead Time
Difference between the time and order was placed and the time you receive the goods.
Define Maximum Stock Level
Highest amount of stock a business can or wants to hold.
Define Re-Order Level
A “trigger point” that indicates when the next order must be placed.
Define Minimum Stock Level
The smallest amount of stock a business would want to hold.
Costs of Holding Too Much Stock
- money is held up
- not enough space
- theft or damage of stock
- perishability
- insurance will need to be paid
- deprecation (may lose its value)
Benefits of Holding Stock
- a business can meet demand
- business could benefit from EOS
How do you calculate Average Stock Level?
stock level = (max. stock + min. stock)/2
Define Stockout
When a business runs out fo stock or is holding too little stock.
Define LIFO (last in first out)
Old stock is used up first, taking priority over new stock.
Define FIFO (first in first out)
First lot of stock into warehouse is first out of warehouse.
Define EPOS (electronic point of sale)
Any computerised device that is used to record sales and control stock.
Define Kanban
Supply of components regulated through the use of a traffic light system; lights go green when more stock needs to be ordered.
Define JIT (just in time)
Where a business order stock at the last minute to minimise waste and storage used.
Define EOQ (economic order quantity)
The order quantity that minimises total stock h9lding costs and ordering costs.
