2.4 resource management Flashcards
(45 cards)
Define job production
This is production of a single unique unit
What may an example be of job production
A wedding cake
Ads and dis of job production
Ads:
- highly flexible
- high profit margins
Dis:
- High unit costs
- Labour intensive- high labour costs
Define batch production
A method where a specific number of identical items are produced together
What is an example of batch production
A bakery producing donuts
Ads and dis of batch production
Ads:
- Highly flexible, allows for the production of different products or variations of the same product (catering to the customers needs)
- benefit from some economies of scale
Dis:
- Can be expensive if making many small batches
- Increased lead times as each batch must finish before the next can start
Define flow production
Involves a highly automated production process which produces large quantities of identical products
Example of flow production
car manufacturing plant
Ads and dis of flow production
Ads:
- achieves economies of scale
- High levels of productivity
Dis:
- set-up costs are expensive
- Low motivation of workers
- Breaks in production is costly
Define cell production
Involves a production line whereby a single product will go through a number of stages
Why can cell production be a better alternative to flow production
- Workers are more motivated operating as a team
- Production is more flexible
- Waste is minimised
Define labour intensive production and examples
High level of human input in the production process, e.g. high specialist, personal, high levels of skill required
Define capital intensive and provide examples
High level of capital investment, e.g. use of machinery, mass production and efficient production
What does capital and labour intensive link to
Labour- Job/cell production
Capital- Flow production
How can we measure productivity
Calculating labour productivity which measures the output per employee in a certain time period
How to calculate labour productivity
Total output (in a time period) / number of employees
How can a business improve its productivity
- Education and training, to improve skills of workforce
- Motivating workers, work faster and harder
- Capital intensity, introducing automation to increase output
- Specialisation, an employee becomes a specialist in a specific role
What is the disadvantage of increasing productivity
There can be a trade-off as while increasing productivity can improve the competitiveness of a business due to the cost per unit being reduced, but high levels of output can cause stress and burnout. This can lead to the quality or customer service to decrease leading to increased product returns and complaints
Define efficiency
Making the best use of all the resources of a business. (minimal waste)
Average unit costs will also be at their lowest
How to calculate unit cost
Total costs / total output
How are productivity and efficiency connected
Greater productivity means the workforce is more efficient and allows more resources to be devoted to production
When efficiency falls, wastage and unit costs rise
What are the advantages of improved efficiency
- Labour productivity increases
- Unit costs fall
- Resources can such as labour, expertise and time can be reallocated
- Profit margins increase
- Ability to charge lower prices to improve competitiveness
What are some ways a business can reduce waste
Transport- unnecessary movement of the product or materials
Motion- unnecessary movement of people
Overproduction- making products that cannot be sold easily
Over processing- adding features that add no value
Defects- faulty products
Inventory- don’t hold too much stock
Define capacity utilisation
The extent to which a business is using its product capacity
The maximum a business can produce over a period of time given the resources available
