Production, Productivity and Efficiency

Question 1

Advantages of Job Production

Answer 1

+) quality is high because workers are skilled.
+) workers are well motivated because work is varied.
+) products can be custom made.
+) Production is easy to organise.

Question 2

Disadvantages of Job Production

Answer 2

• ) high labour costs due to skilled workers.
• ) production may be slow - long lead times.
• ) a wide range of specialist tools may be needed
• ) generally an expensive method of production.

Question 3

Advantage of Batch Production

Answer 3

+) Workers are likely to specialise in one process.
+) unit costs are lowered because output is higher.
+) production is flexible since different orders can be met.
+) more use of machinery is made.

Question 4

Disadvantages of Batch Production

Answer 4

• ) more complex machinery may be needed.
• ) careful planning and co-ordination is needed.
• ) less motivation because workers specialise.
• ) if batches are small, costs will still be high.
• ) money may be tied up in work-in-progress.

Question 5

Advantages of Flow Production

Answer 5

+) very low unit costs due to economies of scale.
+) output can be produced very quickly.
+) modern plant and machines can allow some flexibility.
+) production speed can vary according to demand.

Question 6

Disadvantages of Flow Production

Answer 6

• ) products may be too standardised
• ) huge set up costs before production can begin.
• ) worker motivation can be very low - repetitive tasks.
• ) breaks in production can be very expensive.

Question 7

Factors influencing efficiency:

Answer 7

(FOP)
1) standardisation - can be applied to tools, components and equipment. E.g. batch production (for screws, bolts). However, it’s inflexible as customisation is more difficult.

2) outsourcing - work given to specialists externally, can do same work at a lower cost or more flexibility.
3) Relocating - moving the entire business to a new site, might lower rents, wages and better transport links. Established businesses (Nike) relocated manufacture overseas (India) where labour costs a substantially lower.

Question 8

Benefits and costs of downsizing

Answer 8

• cost saving and increased profit
• a leaner, more competitive operation
• removal of unprofitable and inefficient parts of a business

However, laying off workers means that businesses have been forced to hire back redundant staff as expensive consultants. May have an adverse effect on morale of workers.

Question 9

Benefits and costs of lean production

Answer 9

• raises productivity
• reduces costs and cuts lead times
• reduces the number of defective products
• improves reliability and speeds up product design.
  Include Kaizen (continuous improvement)
• more money spent on machinery
  (Theory)

Question 10

Distinction between labour and capital intensive production

Answer 10

Labour intensive techniques use a larger proportion of labour than capital. Capital intensive techniques involve employing more machinery relative to labour.
Depends on:
Nature of product - mass produced (newspapers) produces by machinery. However, provision of services is labour intensive.
The size of the firm - as a firm grows the scale of production increases, tends to be more capital relative to labour.
The relative prices of the two factors - of labour costs are rising then may be worth the company employing more capital instead. Countries like China where labour is cheap, labour intensive methods are preferred.

Question 11

Benefits of Capital Intensive Strategies

Answer 11

• generally more cost effective if large quantities are produced
• machinery is often more precise and consistent
• machinery can operate 24/7
• machinery is easier to manage than people

Question 12

Drawbacks of Capital Intensive Strategies

Answer 12

• huge set up costs
• huge delays and costs if machinery breaks down
• can be inflexible - much machinery is highly specialised
• often poses a threat to the workforce and could reduce morale

Question 13

Benefits of Labour Intensive Strategies

Answer 13

• generally more flexible than capital - can be retained for example
• cheaper for small scale production
• cheaper for large scale production in countries like China and India
• people are creative and can therefore solve problems and make improvements.

Question 14

Drawbacks of Labour Intensive Strategies

Answer 14

• people are more difficult to manage than machines. They have feelings and react.
• people can be unreliable. They may be sick or leave suddenly.
• people cannot work without breaks and holidays.
• people sometimes need to be motivated to improve performance.