Production Function Flashcards
1
Q
Incomes that the four factors of production give us:
A
- Land gives us rent
- Labour gives us wages
- Capital gives us interest
- Entrepreneurship gives us profit
2
Q
Mass Production - Characteristics
A
- Single purpose machines
- Standardised products
- Little variety
- Assembly lines
- Balanced machine capacity
3
Q
Mass Production- Advantages
A
- Lower cost per unit
- Work is done faster and cheaper
- Specialisation = cost saving
- Easy quality control
4
Q
Mass Production- Disadvantages
A
- Inflexible
- Hard to deal with changes in demand
- Expensive machines
- Expensive to make changes to machines
5
Q
Production systems: Jobbing
A
- Interrupted system
- One job must be finished before the next is started
- Uses general purpose machines
- Jobs are seldom repeated
6
Q
Production Systems: Batch production
A
- In between jobbing and mass production
- Products are made in batches
- Machines have to be stopped and reprogrammed for new batches
7
Q
Production planning
A
- Aimed at implementing the organisations policy on production
- it is the WHAT, and HOW of producing the product itself
8
Q
Economies of scale
A
- buying in bulk
- discounts can be offered if large quantities are ordered because the fixed costs are split
- a phenomenon of mass production
