Productivity and efficiency Flashcards
What is productivity?
The number of units produced by an employee in a certain period of time
What is efficiency?
The abilit yof employees to increase their output from a fixed amount of inputs, like raw materials
What does lean production do?
Miniimises waste so increases efficiency
What is Just in Time?
Form of lean production
Business only orders supplies when they are needed, reducing waster
Disadvantages of Just in Time
Businesses will have no spare stock to respond to unexpected orders which may affect custoemr satisfaction
What is a capital intensive business?
Businesses that mainly rely on the use of capital, or machinery, in the production of goods and services
What is a labour intensive business?
Businesses which mainly rely on the use of human labour in the production of goods and services
Benefits and drawbacks of capital intensive production
+Cheaper than labour-intensive in the long-term
-Can require businesses to commit to high start-up costs as machinery is purchased
Benefits of labour intensive production
+Increases operational flexibility as people can be reassigned to different projects or retrained to complete different tasks
