UNIT 4 - Chap 18: Production of goods and services

Question 1

What is production?

Answer 1

Production is the total output of a business in a given period of time​

Question 2

What is productivity?

Answer 2

Productivity is the output measured against the inputs used to create it. ​

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Question 3

What is the productivity formula?

Answer 3

Productivity: = Output/Quantity of input​

Question 4

3 ways a business can increases efficiency?

Answer 4

Replace employees with machinery so that productivity is automated, can therefore usually produce more goods per hour​

Motivate employees to be more efficient ​

Train employees so that they have more skills to become more efficient

Question 5

Benefits of increasing efficiency? (2)​

Answer 5

Efficiency leads to lower average unit costs ​
1. Business being able to decrease their prices to be more competitive 2. Business making more profit per unit

Question 6

2 reasons why a business holds inventories (stock)

Answer 6

1. Allows a business to have enough inventory (raw materials) to produce their product to meet customer demand, leading to more sales ​
2. Allows a business to have enough inventory to have enough finished products for consumers- Increased customer satisfaction e.g. in a supermarket

Question 7

what is lean production?

Answer 7

Lean production is the term used for those techniques used to cut down on a waste of resources and therefore increase efficiency. ​

Question 8

2 ways lean production can be produced?

Answer 8

1. Just in Time stock control- Only ordering resources when they are needed. This reduces the amount of stock stored in the company, reducing storage costs and reducing risk of stock perishing/being damaged, therefore less wastage. ​
2. Kaizen- A Japanese term meaning continuous improvement through the elimination of waste . Small groups of workers meet together regularly to discuss problems of certain examples excess waste and potential solutions, helping to reduce wastage

Question 9

Benefits of lean production?

Answer 9

1. Less storage costs of inventory (JIT) ​
2. Less money tied up in inventory- can be used elsewhere e.g. paying wages on time​
3. Quicker production of goods and services (Kaizen), increasing efficiency.

Question 10

3 methods of production? (3)

Answer 10

1. Job Production ​
2. Batch Production ​
3. Flow Production

Question 11

What is job production?

Answer 11

JP is where a single unique product is made at a time. E.g. wedding cake​

Question 12

What is batch production?

Answer 12

Batch Production is where large quantities of a product are produced, then a quantity of a another slightly different item will be made. E.g cupcake flavours or jean sizes​

Question 13

What is flow production?

Answer 13

Flow Production is where a large quantity of products are produced in a continuous process​

Question 14

What are the benefits of job production? (2)

Answer 14

1. Provides unique products, leading to a unique selling point and so they Can charge a higher price for the product as it is unique ​
2. Workers are doing varied tasks (give contextual examples in exam) and so they are not bored, increasing motivation ​

Question 15

What are the drawbacks of job production? (2)

Answer 15

1. Skilled labour is often used (labour intensive) and so higher costs need to be paid to skilled labour ​
2. Production takes longer as a unique specific product is being made. Lower productivity and efficiency ​

Question 16

What are the benefits of batch production? (2)

Answer 16

1. Production can be easily changed causing more variety compared to flow production. Leading to more choice for consumers. ​
2. Still offers some variety to workers compared to flow production ​

Question 17

What are the drawbacks of batch production? (2)

Answer 17

1. Machines have to be reset when reset between production batches, causing a delay, causing a reduction in efficiency. ​
2. Machinery Breakdowns will cause a decrease in efficiency ​

Question 18

What are the benefits of flow production? (3)

Answer 18

1. High output of a standardized product – leading to high level of sales, provided there is demand. ​
2. It is capital intensive (using machinery) increasing efficiency causing average unit costs to be lower. ​
3. As they produce a large amount of products they will be able to benefit from E.O.S​

Question 19

What are the drawbacks of flow production? (3)

Answer 19

1. Very boring system for workers , leading to demotivation​
2. As producing a large amounts of products, will need large storage space for inventory, leading to high storage costs ​
3. If one machine breaks down will stop whole prices, decreasing output and efficiency ​

Question 20

How technology has changed production methods and productivity ? (7)

Answer 20

Automation​

Computer aided design (CAD)

Computer Aided Manufacture (CAM)

Computer integrated Manufacturing (CIM)

Electronic Point of Sale (EPOS)

Electronic Funds transfer at point of sale (EFTPOS)

Contactless payment

Question 21

Describe Automation?

Answer 21

Using more machinery can increase efficiency ​

Question 22

Describe Computer aided design (CAD)?

Answer 22

Computer aided design (CAD) allows you to design products online, decreasing the costs of designing and making it physically initially ​

Question 23

Describe Computer Aided Manufacture (CAM)?

Answer 23

Computer Aided Manufacture (CAM) computers monitor the automated production process and robots in the factory increasing efficiency and reducing risk of mistakes ​

Question 24

Describe Computer integrated Manufacturing (CIM)?

Answer 24

CAD and CAM integrated​

Question 25

Describe Electronic Point of Sale (EPOS)?

Answer 25

Electronic Point of Sale (EPOS) allows sales assistants to scan barcodes, increasing efficiency at checkouts and so shorter ques for customers ​

Question 26

Describe Electronic Funds transfer at point of sale (EFTPOS)?

Answer 26

Paying by card increases efficiency at checkout at sales and so shorter ques for customers ​

Question 27

Describe Contactless payment?

Answer 27

Increases efficiency at checkout at sales and so shorter ques for customers