2.4.1 Production, productivity and efficiency Flashcards
(36 cards)
What are the 4 production methods?
Job
Batch
Flow
Cell
What is production?
the transformation of resources (e.g. raw materials) into finished goods or services
What is job production?
Producing one item at a time as ordered by the customer to meet specific preferences
What’s an advantage and disadvantage of job production?
A- Higher profit margin for bespoke products
D-Requires skilled staff so labour cost is high
What’s batch production?
Groups of the same product are produced, before moving on to a group of different products
What’s an advantage and disadvantage of batch production?
A-can make a variety of products with different features
D-time consuming when switching between batches
What is flow production?
a product is created in a series of stages on.an assembly line
What’s 2 advantage and disadvantage of flow production?
A-economies of scale
A-Highly automated so low labour cost
D-Machinery can be expensive so high start up
What is cell production?
Work place is divided into cells. Each cell contains multi-skilled teams each responsible for a particular part of the production process
What is an advantage and a disadvantage of cell production?
A- High efficiency as specialists focus on each part
D-Labour cost high as more human involvement and skilled staff needed
What does productivity measure?
the amount a worker or machine produces in a time period
What is the formula for productivity?
total output/number of employees or machines
Why is productivity important?
It measures a firm’s performance, by producing more a firm can produce more goods per unit of input
What 3 factors influence productivity?
-Specialisation and division of labour
-Motivation of workers
-Intro of new technology
What is specialisation and division of labour and how does it influence productivity?
business divide production into several tasks, each employee focuses on a specific task so they become more efficient so they spend less time to produce product, and less waste
What is education and training and how does it influence productivity?
Increases production as workers can perform tasks more efficiently
What is Motivation of workers and how does it influence productivity?
employees drive and commitment they bring to the work place, increases productivity as staff work harder
What are working practices and how do they influence productivity?
Rules a business implements to improve working conditions, which helps enhance productivity as staff have what they require to perform a task
What is labour flexibility and how does it influence productivity?
Flexible work hours to accommodate employee needs (eg finish at 2 to pick up kids) this means they’re more likely to be motivated when working which increases productivity
What is new technology and how does it influence productivity?
Speeds up processes and reduces the amount of errors
What is the link between productivity and competitiveness?
Higher productivity directly contributes to a company’s ability to compete effectively in the market by reducing costs, improving quality, and fostering innovation
What is efficiency?
The ability of a business to use its production resources as cost-effectively as possible
When is maximum efficiency achieved?
When cost per unit is at its lowest due to economies of scale
(producing lots at once to increase efficiency which decreases the cost per unit) however costs may rise due to diseconomies of scale
What is meant by economies of scale?
Business increases prodcution to become more efficient to decrease cost per unit
