2.2 Managing Business Resources

Question 1

What is production

Answer 1

The action of manufacturing goods using raw materials

Question 2

Job Production is

Answer 2

Making 1 unique product from start to finish

Question 3

Factors of job production

Answer 3

-very labour intensive
-requires very skilled workers
-the items stay still and the worker works around it

Question 4

Benefit of Job production

Answer 4

-specific to customer needs
-can set high prices
-high quality
-motivated workers

Question 5

Drawbacks/limitations of job production

Answer 5

-expensive
-high wages
-don’t get paid till the end
-takes a long time
-large range of tools may be required

Question 6

Batch production is

Answer 6

Making batches of similar products

Question 7

Factors of batch production

Answer 7

-goods are made in batches
-batches can be switched to make something different one the same production line

Question 8

Benefits of batch production

Answer 8

-can be changed to meet customer needs or fluctuations in demand
-less labour involved
-employees become specialised
-lower skilled workforce, lower payed wage

Question 9

Drawbacks/limitations of batch production

Answer 9

-sum all batches carry higher average unit costs
-workers less motivated with repetition
-idle time between batches needs to be managed as this is wastage

Question 10

Flow production

Answer 10

Continues production of identical items

Question 11

Features of flow production

Answer 11

-large quantities are made
-semi skilled staff used to operate machinery

Question 12

Benefit of flow production

Answer 12

-can work 24/7
-lower skilled workers, lower wages
-economies of scale (average cost is lower as higher volumes are made)

Question 13

Drawbacks/limitations of flow production

Answer 13

-expensive automatons
-low motivation
-high labour turnover
-breakdowns and lost production can be costly as this is wastage

Question 14

What is cell production

Answer 14

The production of items is organised into groups and then teams are set at workstations and see a product through to completion

Question 15

Benefits of cell production

Answer 15

-employees are motivated
-staff become experts
-cost saving
-efficient (teamwork)
-good quality control

Question 16

Drawbacks/limitations of cell production

Answer 16

-needs to be well organised
-needs lots of maintenance
-expensive to set up

Question 17

What is capacity utilisation

Answer 17

is the percentage of maximum possible output that is currently being used.

Question 18

Why is Capacity utilisation an important concept:

Answer 18

-often used as a measure of productive efficiency
-average production costs tend to fall as output rises- so higher utilisation can reduce costs, making a business more competitive

Question 19

Positive of working at 100%

Answer 19

-more revenue
-lower unit costs

Question 20

Negative of working at 100%

Answer 20

-demotivated staff
-can’t maintain machines, can’t clean so machine may break down more easily
-may be hard to meet new and unexpected orders so the business can’t grow unless expanding proaction scale
-staff may see pressure so mistakes and labour turnover
-if overcrowded then less efficient
-have to pay overtime

Question 21

How can a business operate above capacity

Answer 21

-overtime
-recruit more staff (temporary)
-add swing shift
-suspend maintenance check
-sib-contract same production activity

Question 22

What is lean production

Answer 22

An approach to management that focusses on cutting out waste, whilst ensuring quality

Question 23

What is productivity

Answer 23

Is the measure of the efficiency of a person, machine, factory or process of production

Question 24

Calculate capacity utilisation

Answer 24

Actual output / maximum possible output x 100

Question 25

Labour productivity calculation

Answer 25

Output (per time period) / Number of employees (per time period)

Question 26

Capital productivity calculation

Answer 26

Output / Capital employment x 100

Question 27

What is labour intensive productions

Answer 27

has a lot of staff

Question 28

what is capital intensive production

Answer 28

-lots of machines -not a lot of staff

Question 29

Why does a business need to keep stock

Answer 29

-need a minimum amount of stock (buffer stock) -never run out of stock -must order supplies at the right time so that supplies are replenished when tock is getting low (Re-order level) -need to know how much stock to re-order (Re-order quantity) -need to know how long our supplies will take to supply our stock when we put in another (lead-time)

Question 30

Stock control graph

Answer 30

Y axis-stock level X axis-time in weeks Maximum stock level Re-order level Minimum stock level Buffer stock Lead time

Question 31

What are the consequences of poor stock control

Answer 31

-stock may run out -if got too much stock it may go bad or lose quality -potential loss of customers if not enough supply -storage area -computer recors -need staff to manage stock area -cash tied up in stock

Question 32

Just in time

Answer 32

Stock delivered where and when you need on the production line

Question 33

Positives of Just in time

Answer 33

-don't waist money and space on buffer stock -don't have to order it instead -less wastage -less capital tied up in stock, therefore reduced average costs of production of each items.

Question 34

Negatives of just in time

Answer 34

-little room for error -business may not be able to cope with unexpected increase in demand -if deliveries are late the firm may need to hault production -will not gain discounts for bulk purchase -higher admin costs, as business needs to place orders

Question 35

Quality is

Answer 35

meeting the needs and experiences of customers

Question 36

Benefits of good quality

Answer 36

-can charge a higher price -better reputation -higher profit -higher customer retention -make products easier to place (more likely to stock) -allows a premium price -allows brand building and cross marketing

Question 37

Limitations/Drawbacks of poor quality

Answer 37

-bad reputation -lower customer retention -lower profit -retailers unwilling to stock -may impact on other products -may have to price discount

Question 38

What is quality control

Answer 38

Detecting faulty products at the end of the production line

Question 39

Advantages to quality control

Answer 39

-filters out bad products

Question 40

Disadvantages of quality control

Answer 40

-have to hire someone/teams to check -time-consuming

Question 41

What is quality assurance

Answer 41

The production is checked at every stage and every worker is responsible for making sure that the product meets a quality standard

Question 42

Benefits of Quality assurance

Answer 42

-don't have to hire more staff, workers already do it -Ensures product is not faulty Stops customer complaints/gives better customer satisfaction

Question 43

Drawbacks of Quality assurance

Answer 43

-Time consuming to train staff -Costs a lot of money to train staff -staff may not like the extra responsibility

Question 44

What is quality circles

Answer 44

A group/team of employees that meet to solve production problems and suggest improvements

Question 45

Advantages of Quality circles

Answer 45

-motivates employees -saves/money

Question 46

Drawbacks of quality circles

Answer 46

-nees a certain type of management (democrat)

Question 47

What is Total quality management

Answer 47

Where quality is the most important thing throughout the business and it puts its customers first

Question 48

Advantages of Total Quality management

Answer 48

-garentees quality -loyal customers -builds reputation

Question 49

Disadvantages of Total Quality management

Answer 49

-expensive