Production, productivity, and efficiency 2.4.1 Flashcards
what are the 4 main methods of production
- job production
- batch production
- flow production
- cell production
describe job production and give an example
- produces a small number of items
- usually made to customer specifications
- undertaken by small, specialist businesses
e.g. architects
4 advantages of job production
- can handle customer requirements due to less demand
- associated with higher quality
- employees gain more job satisfaction
- flexible production method
4 disadvantages of job production
- individual unit costs may be high
- often labour intensive (leading to higher labour costs)
3.. requires close consultation with the client - relies on highly skilled workers
describe batch production and give an example
- producing lots of similar items at the same time
- uses equipment efficiently
- each batch of items goes through one stage of production before moving to the next
e.g. car manufacturers
4 advantages of batch production
- lower costs because businesses can buy in bulk
- customers still have some choice
- products can be worked on by specialist staff
- firm can handle unexpected orders
3 disadvantages of batch production
- takes time to switch production from different batches
- business needs to maintain high stock of raw materials and works in progress
- tasks may become repetitive and boring
describe flow production and give an example
- makes high volumes of the same product
- products move continuously through a production process
- one task starts as another finishes
- time taken on each task must be the same
e.g. production of chocolate bars
4 advantages of flow production
- costs per unit of production are lowered
- suitable for large quantities
- capital intensive (can work constantly)
- less need for specialised skills and training
4 disadvantages of flow production
- very long and expensive set up (and reliant on the high quality machinery)
- high levels of raw materials stock
- goods are mass produced so customers cannot have personalisation
- production stops if flow is stopped
describe cell production and give an example
- work is split into teams which are each assigned a cell
- work can be split into specialised skills in each part of the production process
e.g. electronics
3 advantages of cell production
- ideas can be generated within the cell with many like-minded and specialised workers together
- highly motivated workers
- products can be adjusted to the customers needs
2 disadvantages of cell production
- costs are relatively high because it is reliant on people
- production volumes will not be as high
what are the 3 approaches to assess how efficiently a business operates
- productivity
- unit costs
- capacity utilisation
how to measure productivity
the output per worker per a set period of time
what is the labour productivity formula
output per period/number of employees (replace output with revenue if the business is in a sales environment)
3 factors which influence productivity/efficiency (and why)
- quality and age of machinery (older machines are less efficient and need more maintenance)
- skills of workers (new employees may have low productivity)
- level of motivation (unmotivated workers = low productivity)
what does efficiency measure
the extent to which the resources used in production generate output without wastage
why is efficiency different to productivity
it considers waste
what do unit costs measure
the average cost per unit produced
why do unit costs vary over time
the scale of the business’ operation will change
what is the formula for calculating unit costs
total production costs/total output
what are economies of scale
the cost advantages that a business can achieve by expanding their production scale
what is the effect of economies of scale
to reduce the average unit costs of production
