revision

• What does the term "production" refer to in a business context?

  The amount or level of production refers to how many products are produced or how many customers are served.
• How is productivity defined in a business?

  Productivity is how much a business produced in relation to its resources.
• What is labour productivity?

  Labour productivity is the productivity measured in relation to the people employed.
• Why is labour productivity important for comparing businesses?

  It enables a business to compare its level of production with that of competitors who have different resources available to them.
• Why is improving productivity crucial for managers?

  Productivity is the best way a manager can measure the performance of their production department.
• What does improving productivity imply for a business's resource use?

  It means that a business is making more efficient use of resources and reducing their costs.
• How can automation affect production efficiency?

  A more automated approach to production should improve efficiency.
• What are some ways to improve productivity?

  Buying new technology or making use of existing technology.
• What are the benefits and limitations of using technology in production?

  Benefits:

  • Technology does not require additional costs like wages.
  • Can operate 24 hours a day.
  • Reduces unit costs.

  
  

  Limitations:

  • Requires a high initial investment.
  • May reduce employee motivation.
  • Technology can become outdated quickly.
• How can improving employee motivation affect productivity?

  Improving motivation can often improve the level of output for each employee, thus increasing productivity.
• How can training improve employee productivity?

  Improving the skill level of employees through training can reduce mistakes and help them produce more quickly.
• What role does effective management play in productivity?

  A good manager increases employee motivation and ensures efficient resource use through good organization.
• What is the benefit of improving a business's productivity?

  It reduces the cost of producing each unit, thereby increasing the profit margin for each item made.
• What is job production?

  • Each product is produced individually.
• What are the advantages and disadvantages of job production?

  Advantages:

  • Products meet exact customer requirements.
  • Variation in tasks keeps employees motivated.
  • Ability to charge premium prices.

  
  

  Disadvantages:

  • Requires many skilled employees, increasing costs.
  • Time-consuming as products are tailored.
  • Cannot benefit from economies of scale.
• What is batch production?

  • Products are made in small quantities of identical products in groups.
• What are the advantages and disadvantages of batch production?

  Advantages:

  • Flexible, allowing a range of products.
  • Offers variety to employees, avoiding repetition.

  
  

  Disadvantages:

  • Requires a range of machinery.
  • Time-consuming when switching between batches.
  • Increases production costs due to holding raw materials.
• What is flow production?

  • Large quantities of standardized products are made; this process is capital intensive.
• What are the advantages and disadvantages of flow production?

  Advantages:

  • Increases productivity through machinery.
  • Economies of scale from bulk ordering.

  
  

  Disadvantages:

  • Repetitive work can bore employees.
  • High initial investment and maintenance costs.
  • Inflexible to changes in customer demands.
• What is lean production?

  • A method that aims to reduce waste and improve efficiency.
• What are the advantages and disadvantages of lean production?

  Advantages:

  • Higher labour productivity and reduced costs.
  • Less stock reduces holding costs.
  • Employee suggestions can improve motivation.

  
  

  Disadvantages:

  • Expensive to implement.
  • May struggle with sudden demand spikes.
  • Delays in decision-making can occur.
• What factors affect the most suitable method of production?

  The type of market, skill level of employees, business resources, and nature of the product.
• What production method is suitable for a mass market?

  Flow production is the most suitable for a mass market.
• What is the average cost in production?

  Average cost is total cost divided by the number of units produced.
• What are economies of scale?

  Cost advantages that a business gains when expanding in size.
• How do technical economies of scale benefit a business?

  They allow businesses to invest in better technology that increases productivity and reduces waste.
• How do purchasing economies of scale work?

  Larger businesses can place bigger orders for raw materials, reducing the cost per unit.
• What are managerial economies of scale?

  Bigger businesses can afford to hire specialist managers to make better decisions.
• How do financial economies of scale benefit larger businesses?

  Larger businesses can borrow more money and negotiate cheaper interest rates.
• How do marketing economies of scale work?

  A large business can spread its total marketing spend over a large output, reducing average unit costs.
• What are diseconomies of scale?

  Diseconomies of scale are cost disadvantages when a business is expanding in size.
• How does poor communication affect larger businesses?

  Poor communication can result in employees carrying out tasks incorrectly, leading to waste of resources.
• What is the impact of lack of commitment from employees in a growing business?

  It can decrease motivation and lead to lower productivity.
• How does weak coordination affect large businesses?

  It makes it harder to coordinate employees and resources efficiently.
• What is the break-even point in business?

  The break-even point helps determine how much needs to be produced and sold to cover costs.
• What is the margin of safety in relation to break-even analysis?

  The margin of safety indicates the amount of sales above the break-even point.
• What is a limitation of using break-even charts?

  They assume that variable costs stay the same, ignoring factors like economies of scale.
• What is another limitation of break-even analysis?

  It assumes that the selling price will remain the same for all products sold.