2.4

• What is job production?

  One-off, customized products
• What is batch production?

  Groups of identical products
• What is flow production?

  Continuous production of standardized products
• How is labour productivity measured?

  Output ÷ Labour hours
• What is capital productivity?

  Output ÷ Capital employed
• What does total factor productivity measure?

  Output ÷ (Labour + Materials + Capital + Energy)
• What is the formula for asset turnover ratio?

  Revenue ÷ Total assets
• What is the formula for stock turnover ratio?

  Cost of goods sold ÷ Average inventory
• What does capacity utilisation measure?

  The extent to which a business uses capacity
• How is capacity utilisation calculated?

  (Actual output ÷ Maximum possible output) × 100
• What is a consequence of under-utilisation?

  Higher unit costs due to fixed costs
• What is a consequence of over-utilisation?

  Increased wear and tear on equipment
• What is Just-in-Time (JIT) inventory management?

  Minimizing inventory by receiving goods as needed
• What is an advantage of JIT?

  Reduced inventory costs, improved cash flow
• What is a disadvantage of JIT?

  Risk of stock-outs, reliance on suppliers
• What are buffer stocks?

  Extra inventory held to prevent stock-outs
• What is quality control?

  Inspecting finished products to ensure standards
• What is quality assurance?

  Implementing processes to prevent defects
• What are the key principles of Total Quality Management (TQM)?

  • Customer focus
  • Continuous improvement
  • Employee involvement
  • Data-driven decision making
• What is benchmarking?

  Comparing processes to industry best practices
• What are quality standards?

  Criteria to ensure product quality