Production and productivity(2.4.1)

Question 1

What is production?

Answer 1

the transformation of resources ( e.g raw material components and processes) into finished goods or services

Question 2

What are goods?

Answer 2

physical products
e.g bikes, shirts

Question 3

What are services?

Answer 3

non physical items such as hair dressing, tourism

Question 4

Main methods of production

Answer 4

job production
batch production
flow production
cell production

Question 5

What is job production?

Answer 5

producing one item at a time as ordered by the customer

Question 6

Job production advantages

Answer 6

higher quality product
motivated and higher skilled workers
customised products can be ordered

Question 7

Job production disadvantages

Answer 7

production is slow
labour costs are high

Question 8

What is batch production?

Answer 8

groups of the same product are produced before moving onto a group of different products

Question 9

Batch production advantages

Answer 9

workers can specialise
production can take place as the previous batch starts running out

Question 10

Batch production disadvantages

Answer 10

requires careful coordination to avoid shortages
money is tied up in stock as completed products need to be stored

Question 11

What is flow production?

Answer 11

continuous manufacturing of standardised products usually on the production line

Question 12

Flow production advantages

Answer 12

low unit costs due to economies of scale
rapid production
usually highly automated (capital intensive)

Question 13

Flow production disadvantages

Answer 13

customisation is difficult
capital equipment can be expensive to purchase

Question 14

What is cell production?

Answer 14

workers are organised into multiskilled teams and each team is responsible for a part of the production process

Question 15

Cell production advantages

Answer 15

often more efficient than other methods as workers share their skills and expertise
motivation is usually high as employess work as a team

Question 16

Cell production disadvantages

Answer 16

requires extensive recognition of production processes
team efficiency may be reduced by weak workers

Question 17

What is productivity?

Answer 17

the output per input (person or machine) per hour

Question 18

Types of productivity

Answer 18

labour productivity
capital productivity

Question 19

What is labour productivity?

Answer 19

the measure of the output per worker during a specified time period

Question 20

Labour productivity equation

Answer 20

labour productivity = output/number of workers

Question 21

What is capital productivity?

Answer 21

the measure of the output per capital employed
e.g machinery during a specified period of time

Question 22

Capital productivity equation

Answer 22

capital productivity = output/number of machines

Question 23

Factors that influence productivity

Answer 23

skills and educated staff
investment in capital equipment
employee motivation
business working practice

Question 24

Skills and educated staff - factors that influence productivity

Answer 24

well trained and educated workers are likely to be able to make useful contributions to decisions that improve productivity
workers are more autonomous so the need for supervision is reduced
contributions from knowledgeable staff are likely to lead to improvements in productivity

Question 25

Investment in capital equipment - factors that influence productivity

Answer 25

increased automation can improve levels of output and quality well chosen machinery is less likely to make mistakes than humans machinery and technology can operate for long periods without a break as long as it is properly maintained

Question 26

Employee motivation - factors that influence productivity

Answer 26

motivated workers tend to be more productive financial incentives linked to output may increase workers productivity non financial incentives may include workers in decision making and increase their commitment and productivity

Question 27

Business working practices - factors that influence productivity

Answer 27

flexible and adaptable workplaces cam improve the commitment of workers and allow a business to respond to a change in demand hours and locations of work can be adapted to better meet the need of workers and demand work stations may be used for various purposes with careful planning and training

Question 28

What is efficiency?

Answer 28

the ability of a business to use its production resources as cost effective as possible

Question 29

Efficiency equation

Answer 29

average cost per unit = total costs / number of units

Question 30

Factors that influence efficiency

Answer 30

standardisation of the production process relocation of downsizing investment in capital equipment restructuring the organisation outsourcing adoption of lean production techniques

Question 31

Standardisation of the production process - factors that influence efficiency

Answer 31

occurs when all staff use the same components and techniques in the production process training of workers in minimised bulk buying of components reduces variable costs production lead time is reduced customisation of products is not usually possible

Question 32

Relocation or downsizing - factors that influence efficiency

Answer 32

moving production to a cheaper or smaller location can reduce fixed costs labour intensive businesses may look for lower wage location capital immensive locations may look for lower rents and land costs relocation is very disruptive and will incur significant short term costs

Question 33

Investment in capital equipment - factors that influence efficiency

Answer 33

purchasings or upgrading machinery and technology can increase the rate of output lower costs and improve quality

Question 34

Restructuring the organisation - factors that influence efficiency

Answer 34

reducing the level of staff or reorganising staff can better match labour costs as levels of management are removed redeployment can motivate workers by providing opportunities for staff to take on a new role which will develop their skills and experiences

Question 35

Outsourcing - factors that influence efficiency

Answer 35

tasks may be goven to other specialist businesses that can complete it at a lower cost allows a business to focus on improving the efficiency of its core competencies

Question 36

Adoption of lean production techniques - factors that influence efficiency

Answer 36

an approach to production that involves the reduction of all types of wastage (time resources and space) kaizen means that improvements are made continuously just in time involves the holding of little or no stock which minimises storage costs

Question 37

Labour intensive production

Answer 37

predominantly uses physical labour in the production of goods and services delivery of services is usually more labour intensive than manufacturing in countries where labour costs are low labour intensive production is common small scale production is likely to be labour intensive

Question 38

Capital intensive production

Answer 38

predominately 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 captial intensive