Section 5 – Production... Flashcards
Diseconomies of Scale.
Rising average costs when a firm becomes too big.
Economies of Scale.
Falling average costs due to expansion.
External Economies of Scale.
The cost benefits that all firms in the industry can enjoy when the industry expands.
Internal Economies of Scale.
The cost benefits that an individual firm can enjoy when it expands.
Scale.
The size of a business.
Batch Production.
A method, which involves completing one operation at a time on all units before performing the next.
Flow Production.
Large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line.
Job Production.
A method of production, which involves employing all factors to complete one unit of output at a time.
Process Production.
A form of flow production where materials pass through a plant where a series of processes are carried out in order to change the product.
Downsizing.
The process of reducing capacity, usually by laying off staff.
Outsourcing.
The contracting out of work to other businesses that night otherwise have been performed within the organisation.
Productivity.
The amount of output produced in relation to the resources used.
Work Study.
A process, which identifies the best possible way to carry out a task by looking closely at the way a job is done.
Cell Production.
Involves producing a ‘family of products’ in a small self-contained unit (a cell) within a factory.
Just-In-Time Manufacturing (JIT).
A production technique, which is highly responsive to customer orders and uses very little stock holding.
