4.1 - production of goods n services Flashcards
(31 cards)
production
process of converting factor of inputs into final goods and seevices
productivity
amount of output one worker can make
increase in productivity = increase production
: total output / total input
efficiency
the comparison between what is really being produced with what
can be produced taking into account the same amount of resources
factors affecting labour productivity
- education, training, skills of workers
- working environment / condition
- salaries/wages
- type of technology used
- health, age
- management, style, company’s policy
factors affecting capital productivity
- technological process
- maintenance of machinery
- skills of workforce
- age of machine
factors affecting land productivity
- weather,land,location
- richness of soil, soil erosion
- war, natural disasters
how to increase efficiency
- set realistic goals and targets for employees
- set reasonable deadlines for achievement of goals and targets
- set clear policies on the use of internet & social media in workplace
- increase automation
- train workers to be more skilled
lean production
- an approach to management that focuses on cutting out waste, while ensuring quality
- aims to cut costs by making business more efficient
lean production approaches to
- doing simple things well
- doing things better / continuous improvement
- involving employees in the continuous process of improving, to avoid waste
job production
where items are made INDIVIDUALLY
- each item finished before next one starts
- products made specifically to order
job production advantages
- product meet exact requirement of customer = customer satisficatioj
- good quality products
- company get more money , charge more for specialized product
- more varied jobs , staff motivation - job satisfication
job production disadvantages
- skilled labour is costly
- total cost is high
- time consuming
batch production
where groups of items are made TOGETHER
- each batch is finished before starting a next one
batch production advantage
- less time consuming
- cheaper costs of production
- workers won’t be bored
- reduces risk on concentrating of 1 product
batch production disadvantages
- equipment must be reset between batches: to ensure correct production
- warehouse space required , which increases storage costs
- product can’t be personalised
flow production
identical, standardised item are produced on ASSEMBLY LINE
usage of automation and robotisation
flow production advantages
- low costs
- workers become better at the job : doing the same thing
- only need to be trained in one task
- little training needed (little need for skilled workers)
flow production disadvantages
- lack of employees (not needed)
- capital costs may be high
- if one machine breaks down, the whole production line have to be post poned
productivity vs efficiency
productivity
- increases output w the same number of inputs
efficiency
- increases output by reducing the costs - cutting out waste
just in time inventory
a production and inventory control system in which materials
are purchased and units are produced only as needed to meet actual
customer demand
just in time inventory advantages
- lower storage and holding costs
- reduced waste and no longer used inventory
- improved cashflow and working capital efficiency
just in time inventory disadvantages
- high reliance on supplier performance
- vulnerability to supply chain disruptions (delays)
- hard to handle sudden demand
- no backup stock (incase of emergencies)
computer aided design
capability to design product in 3D
designs are then sent to computer aided machines to form
computer aided design advantages
- ideas can be drawn and developed quickly
- designed can be viewed from all angles and with a range of materials
- some testing and customer feedback can be done before costly
production takes place
