2.4 resource management

Question 1

What is production?

Answer 1

Transformation of resources into finished goods and services

Question 2

What are the methods of production?

Answer 2

Job
Batch
Flow
Cell

Question 3

What affects the methods of production used by a business?

Answer 3

• Level of output
• Nature of the product
• Whether the product is standardised or customised
• Level of automation

Question 4

What is job production? And advantages and disadvantages?

Answer 4

Manufacturers produce one product at a time

(+ve)
- high quality
- skilled workers
- customised products

(-ve)
- slow production
- high labour costs

Question 5

What is flow production? advantages and disadvantages?

Answer 5

Continuous manufacturing of standardised products on a production line

+VE

Low unit costs due to economies of scale
Rapid production
Usually highly automated (capital intensive)

-VE

Customisation is difficult
Capital equipment can be expensive to purchase

Question 6

What is batch production? Advantages and disadvantages?

Answer 6

Groups of the same product are produced as a batch

+ve
workers can specialie
production takes place when previous batch runs out

-ve
requires careful coordination to avoid shortages
money tied up in stock
completed products need to be stored

Question 7

What is productivity?

Answer 7

the output per input (person or machine) per hour

Question 8

What is labour productivity?

Answer 8

Output per worker during a specified period of time

Question 9

What is capital productivity?

Answer 9

Measure of output of capital employed during a specified time period

Question 10

What factors influence productivity?

Answer 10

Employee motivation
Skills, education and training
Business organisation and working practices
Investment in capital equipment

Question 11

What is the link between productivity and competitivenes?

Answer 11

Increase levels of productivity are more likely to be competitive

Question 12

What is efficiency?

Answer 12

Ability of a business to use production resources as cost effectively as possible

Question 13

What is efficiency measured in?

Answer 13

Average cost per unit

Question 14

When is the most efficient level of production achieved?

Answer 14

• Economies of scale maximised
• Total costs spread across optimum level of output
• Diseconomies of scale minimised

Question 15

What factors influence efficiency?

Answer 15

Standardisation of production process
Relocation or downsizing
Investment in capital equipment
Organisation restructuring
Outsourcing

Question 16

What is the difference between capital and labour intensive production?

Answer 16

Labour-intensive production predominantly uses physical labour in the production of goods/services

Capital-intensive production predominately uses machinery and technology in the production of goods/services

Question 17

What is the advantages and disadvantages of capital intensive?

Answer 17

Low cost production when output is high
Machines are constant and precise
Machines run without breaks

Set up and maintenance costs
Breakdowns can severely delay production
May not provide flexibility in production

Question 18

What is the advantages and disadvantages of labour intensive?

Answer 18

Low cost production when labour costs are low
Provides opportunities for workers to be creative
Workers are flexible

Workers unreliable and need breaks
Incentives to motivate staff
Training costs to be significant

Question 19

What is capacity utilisation?

Answer 19

measure of the level to which a businesses assets are being used to produce output

Question 20

What are the issues and benefits with under utilisation?

Answer 20

• fixed costs spread out over fewer units so higher average costs
• workers may be under deployed so fears of redundancy
• meet demands
• engage workers in maintenance tasks

Question 21

What are the issues and benefits of over utilisation?

Answer 21

• can not respond to demands
• higher staff turnover
• machinery can be pushed to limits
• minimise average costs
• increase competitiveness
• secure in employment

Question 22

How to improve capacity utilisation?

Answer 22

1. increase sales
2. increase usage
3. outsourcing
4. reduce capacity
5. redeployment

Question 23

What is a stock control?

Answer 23

illustrates the flow of stock (inventory) into and out of a business over time

Question 24

What is in a stock control diagram?

Answer 24

• maximum stock level
• reorder level
• minimum stock level
• buffer stock
• lead time

Question 25

what is the advantages and disadvantages of holding buffer stock?

Answer 25

advantages - stability in supply - price stabilisation - raw materials security - competitive advantage disadvantage - cost risk of obsolescene - opportunity cost

Question 26

What are the implications of poor stock control?

Answer 26

- storage costs - price reductions - risk of stockout - loss of potential sales

Question 27

What is JIT? advantages and disadvantages?

Answer 27

a process in which raw materials are not stored onsite but ordered as required and delivered by suppliers 'just in time' for production advantages - storage minimised - cash flow improved - work with a small number of trusted suppliers - unused storage space disadvantages - bulk buying economies of scale not possible - cant respond to demand - administrative costs with frequent ordering - unreliable suppliers

Question 28

How to minimise waste?

Answer 28

storage planning sales tactics

Question 29

What is lean production?

Answer 29

Minimisation of resources used in production

Question 30

What does lean production involve?

Answer 30

Less time as production is organised Fewer materials Less physical labour The space required for production is reduced as a result of just in time stock management A small number of trusted suppliers work closely with the business

Question 31

How can lean production lead to a competitive advantage?

Answer 31

Lower unit costs are achieved due to minimal wastage so prices may be lower than those offered by competitors Better quality of output is likely as a result of supplier reliability and carefully managed production processes

Question 32

What are the methods of checking quality?

Answer 32

quality control quality assurance quality circles tqm

Question 33

what is quality control? advantages and disadvantages?

Answer 33

Inspecting the quality of output at the end of the production process Quality specialists are employed to check standards An inexpensive and simple way to check that output is fit for purpose The rejection of finished goods is a significant waste of resources There is little focus on the cause of defects

Question 34

What is quality assurance? advantages and disadvantages?

Answer 34

Inspecting the quality of production throughout the process Quality issues are identified early so products may be reworked rather than rejected The cause of defects is the focus so future quality issues may be prevented Staff training and a skilled workforce is required so labour costs may be increased Reworking may lengthen the production process

Question 35

What is quality circles? advantages and disadvantages?

Answer 35

Groups of workers meet regularly to solve quality problems identified in the production process Workers may be motivated as they are involved in decision making Relevant and focused solutions are likely as workers are familiar with processes Management need to have trust in workers’ views and solutions Meetings and structures must be organised regularly

Question 36

What is TQM? advantages and disadvantages?

Answer 36

Organisation of the business with quality at its core and with every worker responsible for quality Quality in all aspects of the business improves efficiency A culture of constant improvement exists within the business All workers must be committed and receive significant continued training Careful monitoring and control is required

Question 37

What is kaizen?

Answer 37

Kaizen involves a business taking continuous steps to improve productivity through the elimination of all types of waste in the production process Changes are small and ongoing rather than significant one-off’s and are constantly reviewed to ensure that the desired positive impact on productivity is achieved

Question 38

What does kaizen include?

Answer 38

Total Quality Management Just in Time stock management Team Working and quality circles Zero defects in manufacturing High levels of automation High levels of cooperation between workers and management