THEME 2: SECTION 4 (RECOURSE MANAGEMENT)

Question 1

What are the 4 main methods of production with a brief explanation?

Answer 1

• Job = one at a time, one-off items
• Batch = making a batch at a time of identical products
• Flow = using an assembly line to make products
• Cell = Separating workers into groups to produce different aspects

Question 2

Formula for capacity utilisation

Answer 2

capacity utilisation = current output/ maximum possible output (x100)

Question 3

What are lean production and JIT management?

Answer 3

• Lean production = a form of production that focuses on minimising waste. A business will use as few resources as possible to make products in a given quality
• Just In Time Management = A method of lean production in which the business holds as little stock as possible and focuses on making products as they are sold and sending them off straight away.

Question 4

What is the difference between quality control and quality assurance?

Answer 4

Quality control = quality is checked after production, usually by a professional
Quality assurance = quality is checked at each stage of production by workers themselves and they are trained to check well.

Question 5

What is Total quality management?

Answer 5

TQM is when quality is at the centre of everything the business does, plays a big part in the culture.

Question 6

What is the difference between quality control and quality assurance?

Answer 6

• Quality control = quality is checked after production, usually by a professional
• Quality assurance = quality is checked at each stage of production by workers themselves and they are trained to check well.

Question 7

Explain the difference between under and over utilisation of capacity and a problem with each

Answer 7

• under-utilisation = very low-capacity utilization. It’s inefficient because it means a business is not getting good use out of machines and facilities.
• Over-utilisation = utilization is at 100%, which can lead to surplus stock if supply is more than demand

Question 8

what are 2 ways of improving capacity utilization?

Answer 8

• If they are over utilising they can outsource work to other businesses
• If they are underutilising they can use methods to increase demand

Question 9

What are the different aspects of a stock control diagram?

Answer 9

• maximum level of output = max capacity
• buffer stock = minimum stock level
• reorder level = average daily usage x lead time
• Lead time = how long it takes for an order to arrive

Question 10

What does poor stock control imply?

Answer 10

• the business will have high costs from holding so much stock
• The business could have opportunity costs from not having enough stock

Question 11

What is lean production?

Answer 11

A method of production that focuses on waste minimisation. It’s when firms hold very little stock and use fewer recourses.

Question 12

Define productivity and the formula for it

Answer 12

• Refers to the level of output per unit of labour

Productivity = total output / total input.

Question 13

What two factors affect productivity most?

Answer 13

• The use of machinery

- the use of human workers

Question 14

Define the term Kaizen

Answer 14

• A lean production method, employees should be improving work all the time instead of just one-off.
  improvements
  -Employees have to realise so they point out where they are needed and this helps motivation

Question 15

What does efficiency mean?

Answer 15

When production happens at an overall minimum average cost

Question 16

Difference between a labour intensive and a capital intensive firm ?

Answer 16

• Labour intensive = one that requires more workers and less machinery. For example the NHS
• capital intensive = one using more machinery and relatively less workers.

Question 17

What factors influence efficiency ?

Answer 17

• Increasing productivity
• cutting costs
• adopting a lean production approach
• adapt design mix

Question 18

Pros of labour intensive firms

Answer 18

• humans are easier to retrain
• easier to manage during issues
• specialist skills

Question 19

Cons of labour intensive firms

Answer 19

• less output
• people can be unreliable
• increase in wages = increased costs

Question 20

Pros of capital intensive firm

Answer 20

• cheaper in long term
• can work long hours
• more precise

Question 21

Cons of capital intensive firms

Answer 21

• harder to retrain
• expensive up front
• hard to manage when they fail