Using and managing resources

Question 1

What is transformation?

Answer 1

Where a set of inputs, such as raw materials, is turned into outputs, such as finished goods

Question 2

What is job production?

Answer 2

When just one product is produced using skills

Question 3

What is batch production?

Answer 3

Producing different groups of a core product from similar inputs

Question 4

What is flow production?

Answer 4

A product being assembled, processed or built as it moves along a production line

Question 5

Define process production

Answer 5

Where a product is made through a process, such as refining or baking

Question 6

What is division of labour?

Answer 6

Dividing work (and workers) up to specialise on a particular task

Question 7

Define specialisation

Answer 7

When a worker concentrates on a particular task and becomes highly skilled at it

Question 8

Define unique selling point

Answer 8

The factor that only your business or product has which makes it stand out

Question 9

Define adding value

Answer 9

Making a product worth more to a customer; value is added at each stage of production

Question 10

Define lean production

Answer 10

Minimising the use of all the inputs necessary for production

Question 11

What is just-in-time production?

Answer 11

A version of lean production where materials, components, etc. arrive just as they are needed

Question 12

Define quality (to a business)

Answer 12

A product that is up to standard

Question 13

Define quality (to a customer)

Answer 13

A product that does what it should do

Question 14

Define the Japanese idea of kaizen

Answer 14

Continuous (often small) improvement

Question 15

What is the Kitemark?

Answer 15

The logo that shows that the product is BSI (British Standards Institute) tested and approved

Question 16

Define revenue

Answer 16

The income of the business from sales

Question 17

Define fixed costs

Answer 17

The costs that do not vary with production, like rent

Question 18

What are variable costs?

Answer 18

The costs that do vary with production, like raw materials

Question 19

Define average cost

Answer 19

The cost for each unit of production made by a business

Question 20

Define productivity

Answer 20

The efficiency of resources; more productivity means more product from the same inputs

Question 21

What are the economies of scale?

Answer 21

Benefits gained from the growth of a business

Question 22

Define bulk

Answer 22

A large amount

Question 23

Define breakeven

Answer 23

Where costs equal revenue and the business is making neither a profit nor a loss

Question 24

What are the advantages and disadvantages of job production?

Answer 24

Advantages:
Product usually high quality
Producer meets individual customer needs
Greater job satisfaction – involved in all stages of production
Disadvantages:
Cost of producing one unit or job is higher
Labour –intensive
Requires investment in skills and training

Question 25

What are the advantages and disadvantages of batch production?

Answer 25

Advantages:
Making in batches reduces unit costs
Can still address specific customer needs
Use of specialist machinery & skills can increase output and productivity
Disadvantages:
Time lost switching between batches – machinery may need to be reset
Need to keep stocks of raw materials

Question 26

What are the advantages and disadvantages of flow production?

Answer 26

Advantages:
Flow production is capital intensive
High number of products can roll off assembly lines at very low cost
Production can continue at night and over weekends
Firms can benefit from economies of scale, which should lower the cost per unit of production
Disadvantages:
Machinery is very difficult to alter the production process
Production inflexible so all products have to be very similar or standardised and cannot be tailored to individual tastes
Flow production is that the work can be pretty boring for employees involved

Question 27

What are the advantages and disadvantages of process production?

Answer 27

Advantages:
Processes can normally be automated which reduces unit costs
Large quantities can be produced
Ideal for products which have to be of a consistent quality
Disadvantages:
Heavy investment required in process design and production equipment / facilities
Difficult and disruptive if the production process has to be stopped
Little opportunity to make different versions of the product