Resource Management Flashcards
What is job production?
Job production involves producing items that meet specific requirements
Job production benefits
Customer requests and changes can be made easily
More motivated workers
Job production limits
Costs are high per unit
Very labour intensive
Batch production
Batch production is when many similar items are produced at the same time
Batch production benefits
Cost savings from bulk buying
element of choice and flexibility
Batch production limits
Takes time to switch production between batches
Need to hold on to higher stock levels
What is flow production?
Flow production involves a continuous movement of items through the production process
Flow production benefits
Lower cost per unit through improved work flow
Capital intensive – can work constantly to increase output
Flow production limits
Time-consuming and costly to set up
Goods mass produced – less differentiation possible
What is cell production?
Cell production is where the production process is split into self-contained units
Cell production benefits
Increased motivation through team work
Specialisation as teams work on specific areas of production
Cell production limits
Output lower than flow as machinery not used as intensely
May be rivalry between cells
Productivity definition
A measure of the efficiency of in converting inputs into useful outputs. Productivity is a critical determinant of cost efficiency.
2 factors influencing productivity
Labour – skills, knowledge, training
Capital – access to automated equipment
The link between productivity and competitiveness
The more productive an organisation is, the lower its costs are. As a business lowers its costs, it can be more competitive in the market as it can lower its prices or make more profit, which can be reinvested to improve performance.
Two factors influencing efficiency:
Use of machinery
Ability of workforce
The formula for capacity utilisation:
Actual output / maximum output X 100
Identify three implications of:
UNDER-UTILISATION OF CAPACITY
Higher unit costs
Lower morale as staff under-used
Less competitive
3 implications of capacity over-utilisation
Increased likelihood of disruptions as machines breaking down
Less able to respond to changes in demand e.g. new orders
Impact on customer service as work might be delayed or misses deadline
Ways of improving capacity utilisation:
Down-sizing
Improved marketing
Buffer stock definition
Stock held as a contingency in case of unexpected orders so that such orders can be met and in any case of a delay from suppliers
Buffer stock advantages
Potential for lower unit costs from buying in bulk
Improved customer service
Limits of holding buffer stock
Added cost of holding stock (warehousing etc.)
Cash flow problems
Just-in-time production definition
Where inputs into the production process arrive only when they are needed
