chapter 18

Question 1

define production

Answer 1

converting inputs(resources) into outputs(goods/service)

Question 2

define productivity

Answer 2

ratio of output into input during production, this is a measure of efficiency

Question 3

how is productivity measured

Answer 3

labour productivity=output/no. of employees

Question 4

how to raise productivity level

Answer 4

1.Train workers-> more skilled-> more flexible->more productive->so more efficient. However , this is time consuming and workers can leave after training
2.motivation->workers will feel invested in->willing to invest more time into the business->more productive->higher efficiency. However business focus on non financial methods as financial methods will raise cost per unit
3.introduce automation->higher output levels->machinery can work 24 hours->very high productivity. However, may need to make workers redundant, so less
job security for remaining workers, need large capital

Question 5

benefits of increasing efficiency/ productivity

Answer 5

1.lower cost per unit->better profitability
2.fewer workers needed->lower wage costs

Question 6

does raising productivity always guarantee success?

Answer 6

no.
1.the product may not be in demand
2.poor quality management
3.if the workers are working efficiently they may demand higher wages

Question 7

define efficiency

Answer 7

best use of resources

Question 8

define effectiveness

Answer 8

meeting the objectives to meet customer’s needs

Question 9

how is efficiency measured

Answer 9

1.measuring productivity
2.calculate average cost per unit
3.economics of scale
4.measure quality

Question 10

how to improve efficiency

Answer 10

1.training staff
2.introducing automation
3.management of resources
4.maintaining quality

Question 11

what are the methods of production

Answer 11

1.job production
2.batch production
3.flow/mass production

Question 12

what is job production

Answer 12

when a single product is made at a time

Question 13

what is batch production

Answer 13

a quantity of one product is made then a quantity of another product is made

Question 14

what is flow/mass production

Answer 14

where large quantity of a product is produced in a continuous process

Question 15

advantages of job production

Answer 15

1.products meet the exact requirements of customers->have ability to charge a higher price
2.workers have variety in job->more motivated

Question 16

disadvantages of job production

Answer 16

1.very time consuming
2.need skilled labour->require higher salary->higher costs
3.labour intensive->wage costs are high
4.errors are expensive to correct
5.less chance of economies of scale

Question 17

advantages of batch production

Answer 17

1.flexible way of working->easily change from one product to another
2.offer a variety of product->more customer choice->increase competitiveness
3.variety of worker’s job
4.production not greatly affected if any machinery breaks down

Question 18

disadvantage of batch production

Answer 18

1.semi finished products will needing moving about>increase waste and cost
2.machines need to be reset between batches->delay production
3.warehouse space needed->costly

Question 19

advantages of mass/flow production

Answer 19

1.high output of standardized product
2.capital intensive->small training to workers and can recruit unskilled workers->lower wage costs
3.opportunity of eos->decreasing costs>decrease price->higher sales
4.quick and cheap
5.operate 24 hours a day

Question 20

disadvantages of mass/flow production

Answer 20

1.very boring for workers->demotivating
2.high capital costs
3.large storage requirements->high costs
4.if one machine breaks down production will stop

Question 21

what are the factors affecting which method of production to use

Answer 21

1.nature of product
2.nature of demand
3.size of market
4.size of business

Question 22

define inventory

Answer 22

all the materials and goods required to allow for the production and supply of products to the customer

Question 23

what are the forms of inventory

Answer 23

1.raw materials
2.finished goods
3.work in progress

Question 24

disadvantages of holding inventory

Answer 24

1.storage costs
2.risk of wastage
3.capital tied up in stock(affects liquidity position of the business)

Question 25

disadvantages of not holding enough inventory

Answer 25

1.lost sales->unable to supply customers-customer dissatisfaction
2.idle production resources: if raw materials run out ->production process stops->cost of lost output and wasted resources
3.small order quantities->lose benefit of eos-> cost per unit increases. High transportation costs->frequent delivery

Question 26

define lead time

Answer 26

time taken for goods to be delivered

Question 27

buffer inventory level

Answer 27

inventory held to deal with unexpected customer demands and deliveries of supplies

Question 28

what is lean production

Answer 28

Techniques used by businesses to cut down waste and increase efficiency.

Question 29

benefits of lean production

Answer 29

1.less storage of inventories
2.less money tied up in inventories
3.quicker production
4.better use of production
5.reduce cost->lower prices->more competitive->increasing profits

Question 30

lean production methods

Answer 30

1.just in time inventory control
2.kaizen
3.cell production

Question 31

what is just in time inventory control

Answer 31

production method that aims to avoid holding inventories

Question 32

requirements for just in time inventory control

Answer 32

1.excellent relationship with suppliers
2.efficient system of ordering
3.multi skilled workers
4.accurate demand forecast
5.motivated employees

Question 33

disadvantages of just in time inventory control

Answer 33

1.any failure might lead to expensive production delays
2.delivery costs will increase, as there are frequent small deliveries

Question 34

what is kaizen

Answer 34

japanese term meaning continuos improvement through the elimination of waste through the ideas of the workers

Question 35

requirements of kaizen

Answer 35

1.management culture must be towards involving staff
2.team working
2.giving workers the power to take decisions(job enrichment)

Question 36

limitations of kaizen

Answer 36

1.need skilled workers, as they’re the ones that will be able to identify issues and find solutions

Question 37

what is cell production

Answer 37

when the production line is split into separate, self contained units, each making an identifiable part of the finished products

Question 38

requirements for cell production

Answer 38

1.well trained staff
2.multi skilled workers

Question 39

advantages of cell production

Answer 39

1.motivates workers
2.job rotation
3.increased productivity and efficiency

Question 40

how technology changed production methods

Answer 40

1.automation
2.mechanization
3. computer aided designs