2.4 - Resource Management

Question 1

Define the primary, secondary and tertiary sector

Answer 1

• Primary sector - the economic sector that revolves around the extraction of raw materials/natural resources (e.g. agriculture).
• Secondary sector - the sector of the economy that revolves around manufacturing (e.g. construction or fabrication)
• Tertiary sector - the sector of the economy that revolves around providing services (e.g. finance, education, hospitality)

Question 2

Define Job production

Answer 2

A production technique whereby high quality, customisd products that meet specific customer needs are manafactured, often one unit at a time. E.g. tailor made suits, plumbers

Question 3

Define Batch production

Answer 3

A production technique whereby a group of similar products is produced simultaneously. Each item in the batch goes through one stage before moving onto the next. E.g. bakeries

Question 4

Define Flow production

Answer 4

The large scale production of a standard product where each operation on a unit is performed continously one after the other, usually on a production line. (e.g. food, electronics)

Question 5

Define Cell production and breifly evaluate

Answer 5

A production technique in which the production line is subdivided into a number of units (called cells), which are comprised of employees who work in a team to complete a specific sets of tasks. (e.g. cars).
* Workers in the cell are skilled in a number of roles (multi-skilled) - providing a means for job rotation (Hertzberg viewed as a motivator) - improvoing productivity.
* Teamwork aspect supported by Mayo’s Human Relations Theory
* Multiskilling/ training workers to operate different machinary in cells may be time consuming and costly
* May not allow the company to use machenary a intensivley as flow production. If one cell is slow, it could cause a bottleneck (point of congestion within the production system)
* Potentially high setup, coordination and planning costs of setting up a cell production system

Question 6

Describe productivity

Answer 6

Output per unit of input per time period
* Labour productivity - output per employee per time period
* Output / capital employed over a given period

Question 7

Describe efficiency and methods or improving efficiency

Answer 7

Production at minimum average cost:
Methods of improving efficiency efficiency include:
* Delayering
* Downsizing - reducing capacity to optimise capacity utilisation
* New technology
* Outsourcing
* Kaizen
* Just in time production
* Lean production
* Standardisation - Using standard components, processes, documents

Question 8

Give factors influencing productivity

Answer 8

• Specialisation and division of labour
• Motivational techniques - e.g. Taylor piece rate pay
• Education and training
• Technology

Question 9

Describe specialisation and division of labour

Answer 9

• Specialization refers to the concentration of individuals, firms, or nations on producing a limited range of goods or services. (e.g. JLR only make cars)
• The division of labor is a form of specialization where tasks are divided among workers. Workers foucs on a limited number of tasks. - tasks divided into smaller components in which workers specialise.

Question 10

What is ment by rationalisation with regards to capacity utilisation

Answer 10

Reducing the number of recources, particually labour or capital. Usually undertaken because a business has excess or suplus capacity.

Question 11

Give key terms related to capacity utilisation

Answer 11

• Excess / surplus capacity
• Mothballing - leaving equipent/ premisis unused but maintained so they can be put back into use if necessaery
• Overuilisation, underutilisation
• Rationalisation - Reducing the number of recources, particually labour or capital. Usually udertaken because a business has excess or suplus capacity.

Question 12

What is stock comprised of (e.g. finished goods)

Answer 12

• Raw materials and components
• Work in progress
• Finished goods

Question 13

Define quality control, quality assurance, total quality management and quality circles

Answer 13

• Quality control - A reactive quality management approach that relies on the inspecting of products to ensure that they meet the required quality standards
• Quality assurance - a proactive quality management approach which aims to prevent defects before they occur in order to satisfy customer quality standards.
• Total quality management (TQM) - Includes the creation of a culture of quality where employees share collective responsibility for the continual process of detecting and reducing or eliminating errors in manufacturing - teamwork.
• Quality circles - employees meet, often at regular intervals, to discuss methods of optimising quality

Question 14

Define oppotunity cost

Answer 14

The value of what you loose when you choose between two (or more) alternatives

Question 15

Statistical process control

Answer 15

Collecting data about the performance of a process in order to optimise it. A technique used in TQM

Question 16

Give disadvantages of TQM

Answer 16

• Implentation costs and ongoing costs (e.g. training, new machinery)
• Encourages use of standardised processes - may hinder creativity & innovation
• Requires cultural change - could be employee resistance

Question 17

Define JIT stock management

Answer 17

Just in time organises operations so that items of stock arrive immediately before they are needed for production or sale.

Question 18

Define Buffer stock

Answer 18

An additional volume of goods/ raw materials used when stock supply is delayed or when demand unexpectedly increases