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.
Kaizen
A Japanese term which means continuous improvement.
Lead time
The time between receiving an order and making a delivery.
Lean production
An approach to production aimed at reducing the quantity of resources used.
Multi-skilling
Where workers are trained in more than one skill which enables them to do a range of jobs.
Computer aided design (CAD)
The use of computers to design products.
Computer aided manufacturing (CAM)
Where computers link and control the design and production of goods in manufacturing.
Computer integrated manufacturing (CIM)
The use of computers to control the entire production process.
Computer numerically controlled machines (CNC’s)
Machines which carry out the instructions fed by computers.
E-commerce
The trading of goods and services electronically.
E-tailing
Ordering goods online and taking delivery at home.
Quality
Features of a product that allow it to satisfy customers’ needs.
Quality control
Making sure that the quality of a product meets specified quality standards.
Quality assurance
A method of working for businesses that takes into account customers’ wants when standardising quality. It often involves guaranteeing that quality standards are met.
Total quality management (TQM)
A managerial approach which focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business.
