resource management Flashcards
what are the names of the four methods of production
study tip: Likely to come up in exam
job
batch
flow
cell
job production and example
produce one off items produced by skilled workers
e.g. wedding cakes
adv of job production
people more likely to spend highly price for unique handmade product
dis of job production
each product takes long time to make, fewer products made in given time period
(productivity is lower and slower)
skilled workers need to be paid high wages
therefore, increased costs
cant reach economies of scale
products re unique so cant buy in bulk
unit costs are higher
therefore, need to charge higher prices
flow production definition and example
uses assembly line to produce lots of identical products
e.g chocolate bars
each worker completes task then given to other worker to complete next task
works in a flow
adv of flow production
most efficient
can be continuous with no stoppages
many operate 24 hours a day using machines and human workforce
allows business to reach economies of scale as all products identical. therefore, can buy in bulk
reduced unit costs so can charge prices lower to customers
productivity is quicker and more efficient
dis of flow production
if machinery breaks down then stops whole process
delays production
boring for workers as having to make same identical products all day long
batch production definition and example
when same equipment is used to make small batches of different products
products made in each batch are identical
one batch is made then production stopped, equipment altered and cleaned, then next batch is made
e.g t shirts
adv of batch production
productivity of business using batch production is higher then job but lower then flow as each batch needs to be stopped each time
can benefit from economies of scale as can buy raw materials in large quantities
dis of batch production
having to alter the equipment each time can be time consuming as delays productivity
cost and inconvenience of storing raw materials
cell production definition and example
when flow is divided into sets of tasks
each task completed by work group
e.g car assembling, each group assembling different part of car
adv of cell production
workers get to work with others, may make them feel happier
therefore, increasing productivity
as workers responsible for large chunk of work, may feel more pride in their work, results in higher quality products
dis of cell production
as product is removed from flow at each cell, producivity may be lower
productivity definition
rate of production from each unit (human worker or machines)
dis of machinery
initial costs are high
if it dies, then all production is slowed down
humans may rely on it too much and become demotivated #if machinery gets old, level of maintenance required to keep it running can increase
production stoppages
if business alters its production, then have to reprogramme or have new software installed, humans can easily change what they are doing
adv of machinery
can work 24/7
have no feelings so easier to work with then humans
can work for more hours day/ do not need to stop
ways to increase human workforce productivity
training staff so know best and quickest methods to make product
training can also motivate staff ti work harder as feel more valued
CP- initial drop in productivity when staff go and do the training
piecework-workers are paid only for units they produce so motivated to work faster
CP-reduction in product quality
hiring key worker to monitor workforce and motivate them
CP-additional cost of extra employment
efficiency definition
where production happens at an overall minimum average cost
labour intensive firms
uses more workers, less machinery
adv of labour intensive firms
humans can be retrained to carry out new task
whereas, machines may need to be replaced
can solve any problems that arise during production and suggest ways to improve quality
dis of labour intensive firms
harder to manage people then machines as humans have feelings
people can be unreliable(can call in sick)
cant work without breaks or holidays
capital intensive firms
use more machinery, less workers
adv of capital intensive firms
more precise then humans, lead to better quality in products
dont need breaks
easier to manage
works 24/7
dis of capital intensive firms
initial expensive costs
if break downs, huge delay in production
only usually suited for one task, inflexible
fear of being replaced by machine cause workers motivation to reduce
capacity
max output that it can produce within a given time period without buying any more fixed assets-machinery, factory space
capacity utilisation formula
study tip: IMPORTANT
how much capacity a business is using
current output divided by max possible output x 100
over utalisation
better then low utalisation but 100% capacity utalisation has drawbacks
hard to operate at 100% capacity as well as keeping quality high
business may have to turn away potential customers because cant increase output any more
no downtime-machines are on all the time
if machine breaks down, cause huge delays in productivity
no time for equipment maintenence
workers becoming more stressedd may then work flat out/more chance of making mistakes
no margin of error-everything has to be perfect first time causes stress to workers and managers
ways business can increase its capacity
using facilities more within a week
have staff working more and in weekends
can buy more machines
increase their staff levels
increase employment motivation
relocate staff to the busiest areas
outsource-getting another business to some work on its behalf
can outsource work in busy periods
underutalisation
lead to negative brand image e.g not full in supermarkets empty shelves
reduce employee motivation as do not have much to do
less opportunity for promotion
ways to reduce capacity
change their market mix e.g changing promotion of product, price or its distribution
fill spare capaity by accepting outsourced work from other firms
stopping overtime or reducing length of working week
what is stock
store of raw materials, or finished foods
raw materials needed for making product
why do businesses try to miniimise stock
due to costs
what level of stock do businesses need using flow production
need high levels of stock of raw materials
what level of stock does a business need using batch production
none,
what is the minimum stock level called
buffer stock
what is the lead time
time it takes for goods to arrive after ordering them from supplier
what do stock control diagrams do
allow managers to analyse and control stock over a period of time
why is buffer needed
to avoid running out of stock
good thing about buying bulk stock
can purchase economies of scale and lowers the unit cost
therefore, can reduce the prices being charged to consumers
therefore,gaining competitve advantage over smaller niche markets
dis of buffer stock
firm needs to consider how much buffer stock to hold as costs are involved
storage costs of holding buffer stock e.g rent for warehouse, lighting etc
wastage costs of throwiwng away useless stock
stock may get physically damaged or perishable
dynamic markets-high wastage as demands constantly changing so things may be wasted as go out of fashion
what are stock in costs
costs associated with holding too much stock
bad for smaller businesses with little money
dynamic markets where demand is changing frequently
what are stock out costs
costs associated with running out of stock
could result in production being stopped whilst expenses to staff still need to be payed
therefore, demotivating staff as dont have much to do
could also ruin supplier business if no longer can get supply’s off them
what is lean production
efficinet form of production which focuses on waste minimisation
what does waste minimisation mean
using few resoureces (time and money) as possible to make products of a given quality
improve recyclying and reusing materials
adv of using lean production
minimises waste
more efficient
lower costs
therefore, charge lower prices
therefore, competitive advantage
Just in time production
method of lean production
aims to reduce waste of materials
having as little stock as possible
products are avaliable just in time for when the customer needs them
adv of JIT management
storage costs reduced
cash flow improved as money isnt tied up in stock
less waste as less stock out of date lying around
can reduce their prices gain a compeititve advanateb
dis of JIT management
rely on suppliers
hard to organise and stressful for staff
if supplier is unreliable tgen firm may run out of stock and production will be stopped
having smaller more frequent delieveries means firms cant benefit from purchasing from economies of scale from buying in bulk
