Resource management 2.4

Question 1

4 methods of production

Answer 1

Job, Batch, Flow and cell

Question 2

Define each method of production

Answer 2

Job - making individual goods by a single worker
Batch - producing small batches of goods that are identical
Flow -manufacturing of an item in a continuous process
Cell - production organised into cells where each cell is responsible for one part of production

Question 3

Factors influencing productivity

Answer 3

Quality of inputs - trained workers, faster paced
Motivation - ability work fast and hard
Technology - such as robots

Question 4

Factors influencing efficiency

Answer 4

• Quality of input (skilled workers, decrease waste and mistake)
• Production (lean production decreases wastage)
• Management of staff (improves co-ordination, less waste)

Question 5

What is capacity utilisation?

Answer 5

Current output as a proportion of a maximum possible output. (current output/maximum output) x 100

Question 6

Implications of over-capacity

Answer 6

Maintenance - little time to maintain machines meaning them breaking down regularly
Staff - demotivation if over-worked and pressure may create mistakes
Costs - charge staff overtime decreasing profit margins and costs were increasing

Question 7

Implications of under-capacity

Answer 7

Inefficiency - doesn’t work at maximum capacity so unable to exploit economies of scale
Flexibility - if demand was to increase, they would be able to increase current output to meet demand
Loss of market share - reducing in sales and percent of market share may decrease

Question 8

Ways to increase capacity utilisation

Answer 8

Increasing working hours so more people can work or bring in new training people to increase current output
Outsource some of production
Reduce machine maintenance

Question 9

Ways to improve capacity utilisation

Answer 9

• Competitors exiting the market
• Balancing seasonal demand
• Improved marketing

Question 10

What is meant by productivity?

Answer 10

Total output per worker in a given time period

Question 11

How can a business increase supply to increase demand?

Answer 11

• outsourcing
• Hiring flexible workers
• Minimising waste by ordering materials only when needed

Question 12

The implications of holding too much stock

Answer 12

1) High costs incurred from storing materials
2) Huge wastages if stock is not used
3) can cause materials to become obsolete, perished or damaged

Question 13

The implications of poor stock control

Answer 13

1) little stock could mean a business may not be able to meet demand
2) Cash flow problems if a business has too much money tied up in stock and not enough to meet current liabilities
3) Damage a firms competitiveness as less stock to meet demand may mean consumers buy from elsewhere

Question 14

What is Just In Time?

Answer 14

This is when stock is ordered only when it is needed so a business doesn’t hold any stock

Question 15

Advantages of Just in Time

Answer 15

1) Minimises waste as no stock is held so reduced costs
2) reduced costs so money can be spent elsewhere
3) less capital in stock so can be used elsewhere such as investments

Question 16

Drawbacks of Just in time

Answer 16

Suppliers need to be located closely and production must change which can be costly - long run not so much
Not a good relationship with suppliers may cause production to be halted if stock not ready

Question 17

What is meant by waste minimisation?

Answer 17

This is when costs are helped to be reduced by improving efficiency

Question 18

What is lean production?

Answer 18

This is when a business focuses on minimising waste whilst ensuring high quality

Question 19

What is efficiency?

Answer 19

When production happens at a minimum average cost.

Question 20

What is efficiency?

Answer 20

When production happens at a minimum average cost.

Question 21

How can a firm be more efficient?

Answer 21

Minimising waste which is time and physical materials

Question 22

What are some examples of ways that a business could improve its efficiency?

Answer 22

• Cutting costs
• Reconsidering a products design mix
• lean production methods
• Dependent on whether a business is labour or capital intensive

Question 23

What are the benefits labour-intensive production?

Answer 23

• small scale businesses may find it cheaper
• humans can be retrained
• they can be innovate and give suggestions

Question 24

What are the costs of labour intensive production?

Answer 24

• Harder to manage people than machines
• People can be unreliable
• Wage payments can be costly and they increase over time

Question 25

What are the benefits of capital-intensive production?

Answer 25

• In the long run they can be cheaper because less is spent on training and wages
• machinery is more precise which may lead to more consistent quality
• Machinery can work 24/7 and is easier to manage people

Question 26

What are the costs of capital-intensive production?

Answer 26

• Machinery can be expensive to maintain, only larger firms benefit
• Machines are in inflexible
• ## Machines can unexpectedly break down

Question 27

What is the difference between quality control and quality assurance?

Answer 27

Quality control means checking the quality of a production at the end of the production process whereas quality assurance means checking the quality at each stage of the production process

Question 28

Who checks the quality of the products in quality control and quality assurance?

Answer 28

Control - inspectors
Assurance - The workers themselves

Question 29

What are the benefits of quality control?

Answer 29

• Less costs from training as externals do the job
• They eliminate any poorly made products from the end of the production process

Question 30

What are the costs of quality control?

Answer 30

• Assumes that mistakes are unavoidable and so doesn’t attempt to change the production process to prevent these mistakes from occuring
• Doesn’t aim to motivate employees

Question 31

What are the benefits of quality assurance?

Answer 31

• Aims to prevent any poor quality products being made
• Motivates employees
• Workers become more skilled from training

Question 32

What are the costs of quality assurance?

Answer 32

• Some faulty products could slip through to the end of the production process because there is no quality control that is in place
• Can be costly to train all staff members

Question 33

What is TQM?

Answer 33

This is when quality is integrated into the businesses culture and so every employee from every department focuses on how to improve the quality of products

Question 34

What are the benefits of TQM?

Answer 34

• TQM can improve quality of the products
• Reduces waste which can be less costly to the business
• Could improve the businesses reputation

Question 35

What are the costs of TQM?

Answer 35

• Can be difficult to introduce into the business - re training all staff and bringing them in together
• can demotivate staff if different departments cultures clash
• Long time to introduce into the business

Question 36

What are quality circles?

Answer 36

This is when the knowledge of workers from all departments is considered to determine quality control issues
- They can benefit staff by bringing them together and making them more responsible
- They can be unrealistic and may not always be listened too

Question 37

What is the Kaizen approach?

Answer 37

This is the approach where in the production process, improvements are constantly being made. They are reducing waste as they are finding ways to be more efficient

Question 38

What are the benefits of a kaizen approach?

Answer 38

• people at the bottom of the hierarchy may be more motivated as they have decision-making
• Cheap way for businesses to be more efficient by involving employees

Question 39

What are the drawbacks of a kaizen approach?

Answer 39

• Any urgent changes in quality means kaizen will not be the best approach that the business may want to take
• Long-term strategy
• Employees may need training on how to implement changes etc