2.4 Resource Management Flashcards

Question

What are the characteristics of Labour-intensive production?

Answer 1

Predominantly uses physical labour in the production of goods/services The delivery of services is usually more labour-intensive than manufacturing In countries where labour costs are low (e.g. Bangladesh) labour-intensive production is common E.g. UK schools are labour-intensive operations as teachers plan and deliver lessons and provide pastoral support

Answer 2

Predominantly uses machinery and technology in the production of goods and services Large-scale production of standardised products is likely to be capital-intensive Manufacturing in developed countries where labour costs are relatively high is likely to be capital intensive E.g. Automative manufacturers such as Ford use robots and other production technology to manufacture vehicles with supervisors overseeing the quality of output

Answer 3

Advantages: Low-cost production where output is high Machines are usually consistent and precise Machines can run without breaks Disadvantages: Very high set-up costs and maintenance costs Breakdowns can severely delay production May not provide flexibility in production

Answer 4

Advantages: Low cost production where labour costs are low Provides opportunities for workers to be creative Workers are flexible (e.g. can be retrained) Disadvantages: Workers may be unreliable and need regular breaks Incentives may be needed to motivate staff Training costs can be significant

Answer 5

The measure often the level to which a businesses assets are being used to produce output It compares current output to the maximum possible output a business can produce using all of its assets and is expressed as a percentage

Answer 6

(Current output/maximum possible output) x 100

Answer 7

Where a business has a low level of capacity utilisation, it will not be making the most of its resources and is likely to have increased unit costs as: Fixed costs are spread over fewer units of output resulting in higher average total costs Workers may be under-deployed leading to fears of redundancy (where a job role is no longer needed by a business and a worker is dismissed, usually with compensation)

Answer 8

Where a business has a high level of capacity utilisation it may not have the flexibility to respond to new orders from customers as: Staff will be under a lot of pressure to produce high levels of output Overworked staff may be inclined to leave increasing staff turnover (a measure of the number of staff leaving over a given period of time in relation to the workforce as a whole) Machinery may be pushed to its limits and prone to breakdowns which disrupts production and increase costs

Answer 9

Minimal average total costs and an increase in business competitiveness If workers are busy they are likely to feel secure in their employment A business that is busy is likely to be well thought-of and is likely to attract customers who are willing to wait for products to be delivered

Answer 10

Increasing sales Increasing usage Outsourcing Reduce capacity (sell fixed assets or reduce amount of staff) Redeployment (move underused resources to other parts of the business that require them)

Answer 11

The maximum amount of stock a business is able to hold in normal circumstances

Answer 12

The level at which a business places a new order with its supplier

Answer 13

The lowest level to which a business is willing to allow stock levels to fall

Answer 14

The length of time from the point of stock being ordered from the supplier to it being delivered

Answer 15

How stock levels change over the given time period

Answer 16

A quantity of goods/raw materials kept in case of stock shortages This can provide a competitive edge over rivals This approach is commonly called ‘just in case’ stock control

Answer 17

Advantages: Stability in supply: Buffer stocks ensure a stable supply of goods which is able to respond to unexpected customer demand Price stabilisation: Buffer stocks can help prevent extreme price fluctuations as it helps the market to avoid shortages, which would result in rapid price increases Competitive advantage: By having a reliable supply of goods, businesses can gain a reputation for always being able to meet the needs of their customers Disadvantages: Cost: Holding buffer stocks can be expensive, as it requires storage facilities and inventory management systems Opportunity cost: Holding buffer stocks ties up capital that could be invested in other areas of the business Risk of obsolescence: Buffer stocks can become obsolete if the demand for a particular product or input declines

Answer 18

Opportunity cost Significant storage cost

Answer 19

Risk of stock out Unexpected increases in demand cannot be met

Answer 20

A process in which raw materials are not stored onsite, stock is ordered as required, and delivered by suppliers ‘just in time’ for production

Answer 21

Advantages: - Stockholding costs, including storage costs, are minimised - Cash flow is improved as money is not tied up in stocks - Teamwork is encouraged so employee motivation is likely to be improved - unused storage space is available for productive use Disadvantages: - Bulk buying economies of scale are not generally possible - The ability to respond to unexpected increases in demand is reduce - Unreliable suppliers (e.g. late or poor quality deliveries) can quickly halt production

Answer 22

Stock becomes obsolete unless used by a particular date Perishable stock (food and medicines) that is not used before they deteriorate will need to be thrown away Stock may be damaged as a result of poor storage conditions and may not be suitable for use in the production process

Answer 23

Increase the unit costs of production and reduce both efficiency and productivity

Answer 24

Storage: - refrigeration and protection from damage - careful stock rotation Planning: - staff training - computerised stock control - diligent forecasting Sales tactics: - reduce prices to encourage purchases - find alternative uses for obsolete stock

Answer 25

Production in which minimal resources are used in production

Answer 26

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

Answer 27

Quality control Quality assurance Quality circles Total quality management (TQM), continuous improvement (Kaizen) is a technique of TQM

Answer 28

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

Answer 29

Inspecting the quality of production throughout the production process Benefits: 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 Drawbacks: Staff training and a skilled workforce is required so labour costs may be increased Reworking may lengthen the production process

Answer 30

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

Answer 31

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

Answer 32

Kaizen is a method of TQM it 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

Answer 33

Total Quality Management Just in Time stock management Teamwork and quality circles Zero defects in manufacturing High levels of automation High levels of cooperation between workers and management Kaizen requires a long-term management commitment to change

Answer 34

Products will be of a high quality which can provide a competitive advantage Unit costs are likely to be low if a business takes a preventative approach through the use of quality assurance or TQM Low costs may allow a business to reduce its selling price to better compete with or undercut its rivals High levels of quality can be used in promotional activity and provide a unique selling point for businesses in competitive markets Successfully developing a USP for quality can ease expansion into new markets as a result of the positive reputation it creates

2.4 Resource Management Flashcards

(58 cards)