Production processes

• Production management

  Refers to all the activities in managing the transformation process.
• Production

  Is the process of changing inputs such as labour services into goods and services to sell.
• Job Production

  A method of production in which a product is supplied to meet the exact requirements of a customer. Eg. Suit fitting
• Flow Production

  Occurs when an item moves continuously from one stage of production to the next.
• Specialisation

  Occurs when individuals focus on a limited number of tasks.
• Technical EOS

  When cost per units fall as a result of a business using machinery in production.
• Unit Cost

  The average cost per unit.

  Total cost of production / Number of products made
• Lean Production

  A production method that aims to minimise waste.
• Watse

  Unwanted materials from production or faulty products with little value.
• JIT = Just In Time production


  Holds as little stock as possible, as items are ordered just in time to be used.
• Kaizen

  Means 'continuous improvement'. An approach that aims to achieve change from a series of small steps.
• JIC = Just In Case production


  Involves a business holding buffer stocks, just in case there is a sudden increase in demand.
• JIT production

  Advantages:

  • Low storage costs
  • Less waste of space for storage
  • Less danger of theft or having to reduce the price to sell

  Disadvantages:

  • Less likely to get bulk discounts
  • Difficulty with supplier heavily affects the business
  • Unable to meet unexpected rises in demand
• JIC production

  Advantages:

  • Can meet sudden increases in demand
  • Lower risk if there are issues with suppliers
  • Bulk discounts

  Disadvantages:

  • Holds stock that may go out of date or have reduce the price to sell
  • Higher storage costs