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Y11 BUSINESS > PRODUCTION AND PRODUCTIVITY > Flashcards

PRODUCTION AND PRODUCTIVITY Flashcards

1
Q

What is production and its resources?

A
  • The transformation of resources into a final product.
  • Production resources include:
  • Land and buildings
  • Machinery and equipment
  • People
  • Materials
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2
Q

What is job production?

A

A method of production that involves employing all factors to complete one unit of output at a time e.g. tailors, building a bridge.

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3
Q

Job production advantages?

A
  • Can charge higher prices because the business offers a unique product/service.
  • Suitable where technology cannot be used to produce large quantities
  • High quality products
  • Motivated employees because they get to do a variety of jobs.
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4
Q

Job production disadvantages?

A
  • Requires skilled, highly trained employees which takes time and costs money.
  • Can take a long time to produce a product meaning fewer can be made and sold
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5
Q

What is batch production?

A

A method of production that involves completing one operation at a time on all units before performing the next e.g. bakery.

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6
Q

Batch production advantages?

A
  • More use of machinery is made which can lead to better quality and more output
  • Employees can specialise in one task becoming quicker and better at their job
  • Lower unit costs with large batches
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7
Q

Batch production disadvantages?

A
  • A business has to produce a given quantity witheut knowing whether they will sell which means money is wasted making them.
  • Machinery may be costly
  • Money is tied up in stock so can’t be used for other things e.g. advertising
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8
Q

Flow production?

A

-Large scale production of a standard product where each operation on a unit is performed continuously one after the other, usually on a production line.

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9
Q

What can flow production be used for?

A
  • If a business is to grow, sell more and satisfy increasing customer demand, it will need to be able to produce more products. Businesses can use Flow Production to achieve this.
  • Therefore it is good for producing mass market products which are similar / identical and have high levels of customer demand, e.g. confectionary.
  • Flow production is associated with specialisation or the division of labour. -This is where the production process is divided up into smaller jobs where each employee specialises in specific tasks or skills
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10
Q

Advantages of flow production?

A
  • Enables a business to produce and sell a large number of products which enables more sales and therefore higher profits. However, for this to happen there needs to be enough demand from consumers!
  • Flow production enables specialisation or division of labour. This is where employees focus on a limited number of tasks, Because employees do their part of the production process again and again they become good at their specific task and also quicker. Additionally, because employees have simpler tasks it is quicker and easier to recruit and train staff because they require fewer skills.
  • It reduces the cost of producing each product. This is because the costs of production are spread over a large number of units of output, This may mean a business can lower its prices and become more competitive!
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11
Q

Disadvantages of batch production?

A
  • The set-up costs are high. It is expensive to buy and install the equipment needed for an automated production line.
  • It is risky because if demand falls and the business only needs to produce a smaller number of products, the costs of producing these products will be high because the high costs of production arising from the costly equipment will only be spread over comparatively fewer units of output.
  • Flow production is inflexible; it is designed to produce high numbers of identicol similar products, therefore it is not possible to produce products to satisfy the needs of individual customers.
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12
Q

What is labour intensive production?

A

Production methods that make more use of labour relative to machinery

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13
Q

Labour intensive production advantages?

A
  • people are more flexible than machines
  • cheaper for small-scale production
  • people are creative and can solve problems
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14
Q

Labour intensive production disadvantages?

A
  • harder to manage people than machines
  • people can be unreliable (e.g, illness)
  • people need breaks and holidays
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15
Q

Capital intensive production?

A

Production methods that make more use of machinery relative to labour

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16
Q

Capital intensive production advantages?

A
  • machines can work 24/7
  • easier to manage than people
  • can produce greater volume of output
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17
Q

Capital intensive production disadvantages?

A
  • machines can break down
  • machinery is expensive
  • machines are inflexible and can only do one task
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18
Q

What is productivity?

A

The rate at which goods are produced and the amount produced, especially in relation to the work, time and money needed to produce them

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19
Q

Labour productivity?

A
  • the output per worker

- total output / number of workers

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20
Q

What is capital productivity?

A
  • the output per unit of capital

- total output/capital employed

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21
Q

Why is improving productivity important?

A
  • If output is increased business costs oare spread over more units of output meaning the cost per unit falls.
  • This gives a business a choice
  • Enjoy higher profit margins
  • Reduce prices and become more competitive, increasing sales and market share.
  • Improving productivity can also impact customers as they can benefit from lower prices or shorter queues.
  • Employees may get paid more if financial rewards are linked to output, however they may lose their jobs if productivity is improved by replacing people with technology
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22
Q

How to increase productivity, capital productivity?

A

-introduce new tech into the production process, which can speed up production and improve quality

23
Q

How to increase productivity, labour productivity?

A
  • increase employee motivation

- improve working practises

24
Q

Downsizing?

A

Involves making people redundant/closing down loss making factories

25
Q

Relocation?

A

May relocate to where costs are lower (e.g, cheaper rent/labour)

26
Q

Outsourcing?

A

This means sub-contracting out work that the business could do itself to other businesss who can do the work at a lower cost

27
Q

Lean production?

A

An approach to production aimed at reducing the quantity of resources used

28
Q

Examples of waste, defects?

A

Defects - producing products that have to be scrapped means money has been wasted on the material and labour that has been used to produce the defect.

29
Q

Examples of waste, inventory?

A

Inventory - holding high levels of stock is a waste because cash is tied up in stock which could be better used elsewhere in the business, e.g. funding an advertising campaign. Stock can also be knocked or damaged by water meaning it has to be thrown away rather than used in production

30
Q

Examples of waste, time?

A

Time - workers can waste time waiting for supplies to be delivered or for the previous stage in the production process to be completed, but they are still getting paid!

31
Q

Examples of waste, overproduction?

A

Overproduction - money is wasted on labour and materials producing products that are not demanded by customers, meaning they cannot be sold so the business will not earn revenue.

32
Q

Just-in-time and advantages and disadvantages?

A
  • A production technique that is highly responsive to customer orders and uses very little stockholding.
  • An advantage of just-in-time is that it reduces costs by reducing stocks because supplies are only ordered when they are needed. Furthermore. because less stock is held a business can save money on storage and stock it less likely To get damaged.
  • However, JIT depends on reliable suppliers who can delivery quickly. If not, production can stop and delays can make customers dissatisfied. In addition by ordering small quantities a business may not benefit from purchasing economies of scale.
33
Q

Kaizen?

A

A means of continuous improvement which aims to make big improvements from a sequence of small changes. Employees work in teams to identify ways of improving the production process.

34
Q

Lean production is dependent on a committed and motivated workforce because…?

A
  • If they are unhappy they could go on strike and if the business holds little stocks production could stop quickly and this could be very disruptive and damaging to a business’s reputation if customer orders are not fulfilled.
  • If workers are not motivated they are unlikely to want to participate in and contribute to kaizen activities because this represents additional work and responsibility.
  • Employees must be willing to raise and challenge poor quality work - some may resent this additional responsibility whilst others may feel uncomfortable about highlighting poor work by their colleagues.
35
Q

Standardisation?

A

Performing tasks in a specified way. This can increase efficiency and improve quality.

36
Q

Empowerment?

A

Employees have more control over decisions about their work.

37
Q

Quality Circles?

A

Where groups of employees meet to identify ways of improving working practices.

38
Q

Multi-skilling?

A

Employees are trained up to do a variety of jobs. This can minimise disruption if staff are ill.

39
Q

Using resources effectively?

A
  • Lean production helps a business use resources such as lobour and materials more effectively by reducing waste.
  • This results in a number of benefits
  • Financial: Reduced costs increase profits
  • Competitiveness: Lower costs allow businesses to reduce prices and increase sales and market share
  • Environment: Using less energy resources can preserve the environment. -Customer Service: Customers enjoy better quality products.
40
Q

What is e-commerce?

A

The use of electronic systems to sell goods and services

41
Q

Benefits of e-commerce to consumers?

A
  • Rural: Consumers who live in rural areas a long way from major shopping centres can still purchase goods.
  • Opening Hours: Consumers can make purchases even when the shops are closed.
  • Compare: Consumers can easily compare prices offered by different businesses so they can get the best deal.
42
Q

Drawbacks of e-commerce to consumers?

A
  • You cannot physically see the product you are buying
  • The product may not be what you expected, so the consumer needs to spend additional time returning the product and it takes longer to get what they actually do want.
  • It might be expensive and/or inconvenient to return goods
  • The business may not provide free returns so the consumer has to pay more money to return them increasing the overall cost.
  • The consumer may need to go to the Past Office to send goods back which takes time.
  • You may not be at home when goods are delivered: The consumer may have to rearrange delivery or travel to a Post Office to collect their goods so it takes longer to receive them as a consumer may not be able to get to the Post Office when they are open.
43
Q

Benefits of e-commerce to businesses?

A
  • Businesses operating online e.g. e-tailers do not have the high cests of expensive high street shops: With lower costs businesses can pass this on to consumers in the form of lower prices. This can attract more customers, increasing sales, profits and market share
  • Business can reach more customers both nationally and internationally: Businessen can increase sales and profits. This money can be used to grow the business, for example opening more shops or developing new products.
  • Businesses can sell goods 24/7: Customers can buy products online when the shops are closed. This can help increase sales and profits.
44
Q

Drawbacks of e-commerce to businesses?

A
  • Websites can crash: Customers may be unhappy and so go and shop with a competitor instead.
  • Customers are less likely to ‘impulse buy’: Impulse buys are when a customer buys something they did not expect to. Businesses sometimes put products next to tills to encourage impulse buys which can increase sales and profits. If customers are not shopping in a physical shop, they are less likely to see other products that might be of interest to them because online they may be more likely to search for something specific.
  • Lack of personal contact with customers: Businesses may find it harder to get customer feedback regarding what customers like and don’t like so it can be harder to improve goods and services and get ahead of the competition.
45
Q

Types of tech in business, secondary?

A
  • Robots (assembly, welding, painting, dispensing): Used on production line. Mechanical arm is programmed by computer.
  • CAD (Computer Aided Design): The use of computers to design products -CAM (Computer Aided Manufacture): Where computers link and control the design and production of goods in manufacturing.
  • CNC Machines (Computer Numerically Controlled): Machines that carry out the instructions fed by computers.
  • CIM (Computer Integrated Manufacturing): The use of computers to control the entire production process. Functions such as design, purchasing and cost accounting are linked.
46
Q

Types of tech in businesses, tertiary sector?

A
  • Financial Services: EFTPOS (Electronic Funds Transfer at Point of Sale): Electronic cards can be used to pay for goods. Funds are transferred from the customer to the business electronically.
  • Marketing: IT Data Analysis
  • Retailing: EPOS (Electronic Point of Sale): Refers to technologies that record the sale of goods or services to the customer at the point where they are purchased. Barcodes scan and record what products have been purchased. This means stock can be reordered automatically.
  • Leisure: ticketless travel (e-tickets)
47
Q

Advantages of new tech?

A
  • increases in productivity reduce costs

- work for employees is easier

48
Q

Disadvantages of new tech?

A
  • expensive
  • redundancies
  • less motivation
49
Q

What are factors of production?

A

-FACTORS OF PRODUCTION FACTORS OF PRODUCTION are the resources used to produce goods and services (land, labour, capital and enterprise). PRODUCTION is the transformation of resources into a final product.

50
Q

Factors of production, land?

A
  • The natural resources available for production, areas of land on which to construct business premises.
  • Natural resources e.g. coal, oil, iron ore Natural resources can be classified as: Renewable Resource: Are replaced by nature.
  • Non-renewable resource: Once used they cannot be replaced.
51
Q

Factors of production, labour?

A

-Human input into the production process. The skills a worker has is known as their HUMAN CAPITAL. A worker’s human capital can be increased by training which could make them more PRODUCTIVE. PRODUCTIVITY is the rate at which goods are produced, and the amount produced, especially in relation to the work, time and money needed to produce them.

52
Q

Factors of production, capital?

A

-FIXED CAPITAL is a stock of human made resources such as machinery. equipment and buildings. Fixed capital is used to convert WORKING CAPITAL into goods and services. WORKING CAPITAL is stocks of raw materials and components used in production and finished goods.

53
Q

Factors of production, enterprise?

A

-The activity of starting and running a business. An ENTREPRENEUR is a person who takes risks and set up businesses. It is an individual who organises the other factors of production and risks their own money in a business venture. The reward for enterprise is profit.

Y11 BUSINESS (7 decks)

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