Section 5 - Production Flashcards
This section examines the way organisations use and manage resources to produce goods and services.
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 might 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
A production technique which is highly responsive to customer orders and uses very little stock holding.
