2.4.1 Production, Productivity, and Efficiency

• Production is the process of transforming raw materials and resources into finished goods and services
• Match the production method with its key feature:

  Job Production ↔️ High flexibility

  Batch Production ↔️ Moderate quantities

  Flow Production ↔️ Automated processes

  Cellular Manufacturing ↔️ Specific product families
• Choosing the right production method is crucial for efficiency and meeting customer demands.
• Flow production is characterized by high output, automated processes, and lower costs
• What is job production typically used for?

  Unique, custom products
• What type of production method is suitable for bakeries?

  Batch Production
• Productivity measures how efficiently inputs are converted into outputs
• The formula for productivity is Total Output divided by Total Input.
• If a factory produces 1000 units using 100 hours of labor, what is the productivity?

  10 units per hour
• High efficiency minimizes waste and maximizes output
• Technical efficiency focuses on using resources to achieve maximum output with minimal input.
• Allocative efficiency ensures resources are allocated to produce goods and services that meet consumer demand
• Productivity is calculated as Total Output divided by Total Input
• High efficiency leads to cost savings and higher profitability.
• Match the type of efficiency with its description:

  Technical Efficiency ↔️ Achieving maximum output with the least input

  Allocative Efficiency ↔️ Producing goods consumers desire most

  Economic Efficiency ↔️ Combining technical and allocative efficiency
• If a factory's profit equals its cost, its efficiency score is 1
• Production is the process of transforming raw materials into finished goods or services
• Order the production methods from most flexible to least flexible:

  1️⃣ Job Production

  2️⃣ Batch Production

  3️⃣ Cellular Manufacturing

  4️⃣ Flow Production
• Job production creates unique, custom products one at a time.
• Technical efficiency involves achieving maximum output with the least input
• An efficiency score of 1 signifies that resources have been used effectively to generate profit.
• Productivity measures the efficiency of converting inputs into outputs
• Match the concept with its focus:

  Production ↔️ Creation of goods/services

  Productivity ↔️ Efficiency of conversion

  Efficiency ↔️ Best possible results