3C - Characteristics of a manufacturing business

Question 1

Manufacturing businesses

Answer 1

Use resources and raw materials to produce a finished physical good

Characteristics:
- Tend to have highly automated processes that are capital-intensive
- Production and consumption of the product occur at separate times
- Often have a low degree of customer contact during production
- Outputs produced are tangible
- Outputs produced can be stored as inventory
- Produce standardised goods through mass production

Question 2

Service Business

Answer 2

Provide intangible products, usually with the use of specialised expertise

Characteristics:
- Tend to have production processes that are labour-intensive
- Production and consumption of the service occur simultaneously
- Tend to have a high degree of customer contact during production as it occurs simultaneously with consumption
- Outputs produced are intangible
- Outputs produced cannot be stored as inventory
- Services are usually not standardised and instead tailored specifically to fulfil individual customers’ needs

Question 3

Sims

Answer 3

• Both aim to optimise their operations to produce high-quality outputs at a low cost of production
• Both have to deal with suppliers during the process of managing operations
• Both can utilise forms of technology in their operations systems
• Both aim to optimise efficiency and effectiveness in their operations