Production of goods and services

Question 1

Labour incentive

Answer 1

Use of many workers and few machines for the production of a good/service.
Mainly in developing countries

Question 2

Capital incentive

Answer 2

Use of robots or machines more that human workers

Mainly in developed countries

Question 3

Productivity

Answer 3

is the output measured over the inputs used to create it.

Question 4

Ways to increase productivity and efficiency

Answer 4

• Improve quality of the product and inventory control to reduce waste
• Replace employees with machines
• Motivate employees more effectively
• Improve training to increase employee efficiency
• New technology
• Use of automation

Question 5

Benefits of increasing productivity

Answer 5

• Reduce inputs needed for the same output level
• Lower costs per unit
• Fewer worker may be needed, possibly leading to lower wage costs
• Higher wages might now be paid to workers, which increases motivation

Question 6

Buffer Inventory

Answer 6

is the inventory held to deal with uncertainty in customer demand and deliveries of supplies.

Question 7

Lean production

Answer 7

is a term for those techniques used by businesses to cut down on waste and therefore increases efficiency, for example, by reducing the time taken for a product to developed and become available for sale

Question 8

Seven types of waste that can occur in production

Answer 8

• Overproduction
• Waiting
• Transportation
• Unnecessary inventory
• Motion
• Over-processing
• Defects

Question 9

Seven types of waste that can occur in production

Answer 9

• Overproduction
• Waiting
• Transportation
• Unnecessary inventory
• Motion
• Over-processing
• Defects

Question 10

Benefits of lean production

Answer 10

• Less storage of raw materials or components
• Quicker production of goods or services
• No need of repairs or provide a replacement service for a dissatisfied customer
• Better use of equipment
• cutting of some processes, which speeds up production
• ## less money tied up in inventories

Question 10

Benefits of lean production

Answer 10

• Less storage of raw materials or components
• Quicker production of goods or services
• No need of repairs or provide a replacement service for a dissatisfied customer
• Better use of equipment
• cutting of some processes, which speeds up production
• less money tied up in inventories
• Improved health a safety, leading to less time off work

Question 11

Methods Lean production can be carried out from

Answer 11

• Kaizen
• Just-In-Time inventory control
• Cell production

Question 12

Kaizen

Answer 12

is a Japanese term meaning continuous improvement through the elimination of waste

Question 13

Advantages of kaizen

Answer 13

• Increased productivity
• Reduced space needed for production
• Work-in-progress is reduced
• Improved layout of the factory floor could combine some jobs, leaving employees to do more tasks

Question 14

Just in time inventory

Answer 14

Just in time inventory is production method which involves reducing or virtually eliminating the need to hold inventories of raw materials or unsold inventories of the finished product

Question 15

Advantages of Just-In-Time production

Answer 15

• Costs of holding inventories are reduced, as no raw materials are ordered to keep in warehouse
• Money gained quicker as products are sold quicker.§

Question 16

Job production

Answer 16

is where a single product is made at a time

Question 17

Batch production

Answer 17

is where a quantity of one product is made, then a quantity of another product is made

Question 18

Flow production

Answer 18

is where large quantities of products are produced in a continuous process. Also known as mass production

Question 19

Advantages of Job production

Answer 19

• More suitable for personal services
• Meets exact requirements of customer
• Workers has more varied jobs, which increases employee motivation
• Flexible, mainly used for high quality products, so higher price can be charged

Question 20

Disadvantages of Job production

Answer 20

• Skilled labour is used, which raises costs
• Labour intensive, costs are high
• Production takes a long time
• Errors can be expensive
• Specific materials may be needed, which is expensive

Question 21

Advantages of Batch production

Answer 21

• It is flexible way of working and production, can be changed from product to product
• Some variety given to the workers
• Machinery break down will not affect production

Question 22

Disadvantages of Batch Production

Answer 22

• Expensive, as semi finished product will have to transported to different stages
• Delay in production, since machines have to be reseted
• Warehouse space needed, for raw materials and finihsed batches of products.

Question 23

Advantages of Flow production

Answer 23

• High output of standardised products
• Cost of each product is kept low, so overall costs are low
• Capital-intensive methods can be used
• Benefits from economies of scale
• Low costs, so price will be lower, meaning higher sales

Question 24

Disadvantages of flow production

Answer 24

• Boring for the employees, little job satisfaction, causing lack of motivation
• There are significant storage requirements - costs of inventories of raw materials.
• Capital cost for setting up the business may be high
• One machine could lead to stoppage of production

Question 25

Factors affecting the choice of method of production

Answer 25

• Nature of product
• Size of market
• Nature of demand
• Size of business

Question 26

Advantages of new Technology

Answer 26

• Productivity is greater, more efficient and less costs
• Greater job satisfaction, as boring jobs are done by machines
• Workers may be motivated as more employees are needed to use the machinery, which requires training.
• Accuracy and Quality is improved
• Quicker communication and reduced paperwork
• Better and quicker decision making, with assistance of IT tools

Question 27

Disadvantages of new Technology

Answer 27

• Unemployment rises as humans are replaced by machines
• Expensive
• Employees may be unhappy as more tech is introduced which will change work patterns
• New tech is being changed all the time, so new devices should replace the old one frequently