Methods of Production

• Procurement


  Obtaining/purchasing goods or services from external sources to be used during production process or sold on
• Supply chain


  Complex system of businesses, people, activities, information and resources all involved in the movement of goods and services from source to consumer
• Warehouse


  Where a finished product or resources are stored before being bought/used
• Production


  The process of changing inputs such as labour services into goods and services that can be sold
• Job production


  Manufacture of an individual good from start to finish. Each product is different and offers a unique good for the consumer or meets specific consumer requirements
• Two advantages and disadvantages of job production


  Advantages

  • Unique, suited to customer specification
  • Higher quality, products are made individually and more time is spent on creating them

  Disadvantages

  • Expensive, workers are more skilled and have higher wages
  • Time-consuming, good requires more attention to detail
• Batch production


  When a small number of identical products are made at once. Each batch goes through one stage of the production process before moving onto next stage
• Two advantages and disadvantages of batch production


  Advantages

  • More products produced, allow for higher sales
  • Costs for producing each product (unit costs) are lower

  Disadvantages

  • Quality is not as high compared to job production, less time and care is taken on individual products
  • High level of stock may be needed, materials have to be stored which is expensive
• Mass/flow production


  Goods are produced continuously usually on a production line. Partly finished goods move along the assembly line with parts being added through the process
• Two advantages and disadvantages of mass/flow production


  Advantages

  • Produces similar/identical goods, production is quicker
  • Reduces unit costs of production, benefit from economies of scale

  Disadvantages

  • Lack of flexibility, flow production produces identical products, cannot change the product to fit customer requirements
  • Bored workers, could lead to lower quality due to less motivation