Theme 2.4

Question 1

What are the three different types of production?

Answer 1

1.Job-A one off small product that is tailored to consumer needs
2.Batch-Similar items are produced together
3.Flow-Product moves continuously through production process

Question 2

What are three evaluation points of Job production?

Answer 2

+Employees can feel more motivated
+Associated with higher quality
-Requires close consultation with client

Question 3

What are three evaluation points of Batch production?

Answer 3

+Cost savings can be achieved by buying bulk
-Tasks could become repetitive and boring
-Takes time to switch production of one batch to another

Question 4

What are three evaluation points of Flow production? + - -

Answer 4

+Less need for training & skills
-Production is shut down if flow stops
-Goods are mass produced: No differentiation

Question 5

What are three evaluation points on Process production?

Answer 5

+Processes can usually be automated which reduces unit costs
+Large quantities can be produced
-Difficult and disruptive if the production process has to be stopped

Question 6

What is cell production?

Answer 6

where work is organised into teams and each team is given responsibility of doing a part of production process.

Question 7

What is the calculation for Unit costs?

Answer 7

Total production costs in period/ Total output in period

Question 8

What is economies of scale?

Answer 8

Where costs decrease as output increases

Question 9

What are three internal

Question 10

What are three internal economies of scale?

Answer 10

1.Financial
2.Technical-using equipment to boost productivity
3.Marketing

Question 11

What is labour intensity? with examples

Answer 11

Production relies on using labour resources
-Hair dressing

Question 12

What is capital intensity? with examples

Answer 12

Production relies on using capital resources
-Car manufacturing

Question 13

What are 3 evaluation points on Capital intensity? ++-

Answer 13

+Greater opportunities for economies of scale
+potential for significantly better productivity
-Large investment

Question 14

What are 3 evaluation points of Labour intensity? +- -

Answer 14

+Labour is a flexible resource through multi-skilling and training
-Potentially high costs of labour turnover
-greater risk of problems with employee/ employer relationship

Question 15

What is capacity utilisation?

Answer 15

The proportion of a business’ capacity that is actually being used over a specific period

Question 16

What is the formula for capacity utilisation?

Answer 16

Actual level of output/maximum possible output x100

Question 17

What are 3 costs of holding stocks?

Answer 17

1. Cost of storage
2. Obsolescence risk
3. Interest costs- tying up capital which the business may be paying interest

Question 18

What are two advantages of low stock levels?

Answer 18

1. Lower risk of stock obsolescence
2. Less capital tied up in working capital - can be used elsewhere in the business

Question 19

What are two advantages of high stock levels?

Answer 19

1. Production fully supplied
2. Better able to respond to sudden changes in demand

Question 20

What is quality assurance?

Answer 20

The processes that ensures production meets the requirements of customers

Question 21

What is quality control?

Answer 21

More about detecting defect rather than preventing it

Question 22

What is TQM?

Answer 22

A management philosophy that focuses on continuous improvements of the product

Question 23

What are three evaluation points of TQM? ++-

Answer 23

+eliminates cost of inspection
+Motivation as employees feel more involved
-Requires strong leadership

Question 24

What is Kaizen?

Answer 24

Another kind of quality assurance which encourages employees to engage fully with finding way to improve quality processes

Question 25

What are three dangers of working at low capacity utilisation?

Answer 25

1. Higher unit costs
2. less likely to reach break-even output
3. Capital tied up in under-utilised assets

Question 26

What are two problems with working at high capacity?

Answer 26

1. Negative effect on quality - production is rushed
2. Less sales - less able to meet sudden increases in demand