production and investment T7 Flashcards
what is production
process of creating, manufacturing or improving goods and services
what is the aim of production
to add value to the inputs to create a profitable output
what are business resources
capital enterprise land labour
what is specification
resources are exclusively used to make a unique range of products
advantages of using specification
resources concentrated where they are most productive
average cost of production lower
workers increased output - due to reps
disadvantages of using specification
repetitive doing same job decreases motivation
harder to adapt to change
increases absences lowers quality of work
what is job production
production of single items or services, these jobs are unique and usually specially requested by customers
what are the benefits of job production
unique product that exactly matches requirement of customer
employees have a higher level of job satisfaction
easier to add value to product
difficulties of job production
have large range of equipment and employees with different skills can be expensive
harder to cost up accurately
very hard to benefit from EOS
what is batch production
used when there is a set procedure and stages that the production process needs to go through
benefits of batch production
system can produce in large quantities
faster method than job
can benefit from EOS
drawbacks of batch production
needs storage space for products waiting to go into next process
not great product variation
increased downtime between batches decreasing output
what is flow production?
task is worked on continuously as it flows from one production stage to the either
what are the benefits of flow production
goods and made and sold quickly
can produce in large numbers
benefit from EOS
drawbacks of flow production?
must be standardised can’t change for customers
if production line stops whole process stops
machines need good maintenance
what is lean production?
technique that uses resources as efficient as possible to achieve desired quality with min. waste
advantages of lean production
higher quality less defects
more employee involvement = motivation
lower cost (less material needed)
disadvantages of lean production
constant focus on improvement can cause too much stress
requires long term commitment
what is cell production?
form of lean, works on teamwork with groups taking responsibility for different parts of production process
benefits of cell production
greater motivation - variety
opportunities for job rotation
workers become multi skilled
drawbacks of cell production
has to trust the other groups
recruitment and training must support this approach
company may need to invest in new materials
what is productivity?
the greater the output in relation to input the higher the productivity level
how is productivity calculated?
output/input
how is labour productivity calculated?
output(units)/no. workers
how is material productivity calculated?
output/cost of raw materials
how is total factor productivity calculated?
value of output(output x price)
/ cost of capital and labour used
how can machinery affect productivity?
modern machinery can maximise effeciency
staff need to be trained on how to use for fewer defects
drawbacks of using machinery
initial purchase is expensive
maintenance costs
training costs
what is innovation?
process of producing something new from a new idea which will lead to increase productivity
what is research and development?
refers to wide range of activities designed to gather knowledge in order to improve products
why would a business undertake investment?
ensure use of modern equipment
benefit from EOS
improve efficiency
why would a business undertake research and development?
gain competitive advantage
allows business to build strong brand recognition
leads to innovation of product specification
what factors affect innovation?
finance
position in market - may need to increase competitiveness
costs - innovative tech is required in order to cut costs
advantages of innovation
improved quality
ability to enter new markets
reduces costs
disadvantages of innovation?
uncertain demand for new product
competition- rivals may want to join
if product is generic copies can be made
advantages of research and development?
allows for increase in globalisation
gain knowledge on tech advancements
disadvantages of research and development?
cost - can be expensive
risk - no guarantee of success
other business’ may copy new ideas
what are the processes involved in research and development?
market research - ensure there will be demand for product
brainstorming - method that generates ideas fast
value analysis - consideration of products function, cost and aesthetic
what factors influence research and development?
if product is in highly competitive market R&D expenditure will be higher
the more sophisticated the product is the more frequent R&D will need done
state of economy - if in recession business will cut back costs R&D being one
