business paper 2

• Job production


  A method of production where products are made individually
• Job production


  • A bridge
  • A piece of artwork
  • An item of furniture
  • A hand-made item of clothing
• Advantages of job production

  • The item is likely to be of a high quality and is a one-off, bespoke item (i.e. designed to meet the individual needs of the customer)
  • The business can often charge a high price and make a good profit
• Disadvantages of job production

  • Can be a high cost method of production, especially if it requires especially skilled workers to produce the item
  • Production may be slow and the customer may have to wait for the product
• Batch production


  A method of production where one type of product is made and then production is switched to make a different product
• Advantages of batch production

  • Batches can be varied to meet the needs of different customers
  • There are no storage costs if goods are made to order
  • It is cheaper than job production
• Disadvantages of batch production

  • Machines need re-setting between different batches, which costs money
  • Stocks of raw materials may be needed – extra costs
  • Tasks may be repetitive and boring for workers, leading to motivation and staff retention problems
• Flow production


  Production of one product that takes place continuously using a production assembly line. It is sometimes called mass production.
• Advantages of flow production

  • Large quantities are produced for sale
  • The business may gain economies of large-scale production which can reduce unit costs
  • Use of machinery/automation can reduce costs
  • Use of computer controlled machinery allows some variation in products
• Disadvantages of flow production

  • Mass-produced goods may not be of high quality
  • The business may need to store large stocks of materials ready for use on the production line
  • Production can be disrupted, for example, by a mechanical break-down
  • Tasks may be repetitive and boring for workers, leading to motivation and staff retention problems
• Cadbury's has enough demand for its chocolate bars to be able to manufacture them using flow production
• Cadbury's does not use batch production, which would involve making one type of bar and then switching to another type of chocolate bar
• Cadbury's produces its chocolate bars using flow production


  Benefit: Allows large quantities to be produced for sale
• Cadbury's produces its chocolate bars using flow production


  Possible problem: Mass-produced goods may not be of high quality
• Automation


  A production process involving machinery that is controlled by a computer rather than a person
• Robotics


  The use of robots in the production process
• Examples of how technology can be used in production

  • Automation
  • Computers
  • Robotics
• Advantages of using technology in production

  • Machines can replace workers, reducing costs
  • Worker productivity is increased as computers help them to work faster and produce more, reducing costs
  • Waste is reduced as machines are usually more accurate than humans
  • Production can be flexible as machines can be programmed to change what is produced
  • Technology can operate 24/7 and never needs time off work, again reducing costs and increasing output
  • Human safety is improved as machines can do dangerous jobs
  • New technology can lead to new products for businesses to sell
• Disadvantages of using technology in production

  • The business may need to recruit skilled labour to program the computers which control production
  • Workers may need to be retrained to work with the new technology and training costs money
  • Machines can break down, disrupting production
  • New technology may be expensive to buy
  • Customers may not like automation, for example, automated telephone response systems
  • The storage of data about customers must meet the requirements of data protection laws
• Manchester Airport uses an automated system for handling passengers' baggage


  Advantage: Reduces costs by automating a repetitive task
• Manchester Airport uses an automated system for handling passengers' baggage


  Disadvantage: Baggage still needs to be manually transferred onto the plane, so the system is not fully automated
• Quality


  A good or service that is fit for purpose, complies with legal requirements, and meets customer expectations
• Benefits of providing quality goods and services

  • The business gains a good reputation
  • Waste is reduced
  • The number of goods which are 'rejects' is reduced
  • Satisfied customers will buy in the future and recommend the business to others
• Quality


  A product (goods or service) being fit for purpose
• Quality goods and services


  • Fit for purpose
  • Comply with relevant legal requirements
  • Meet customer expectations
• Benefits of providing quality goods and services

  • The business gains a good reputation
  • Waste is reduced
  • Reduces the number of 'rejects'
  • Satisfied customers will buy again, recommend, and not develop a poor reputation
• According to the 2006 American Customer Satisfaction Index, Papa John's does better pizza than larger rivals Pizza Hut and Domino's in a survey of the quality of pizzas and service provided in the restaurants
• John H. Schnatter, Papa John's founder and executive chairman: '"We have a fundamental belief that if you serve a superior quality pizza with excellent service and value, consumers will recognize the difference and reward you with repeat business"'
• Quality control


  A physical inspection by an inspector or machine to check each product is of a sufficiently high standard
• Quality assurance


  An approach that involves the whole business focusing on quality with the aim of preventing quality problems from arising
• Advantages of quality control

  • Stops poor quality goods and services being sold
  • Production can continue while inspection takes place
  • Producing good quality products will improve reputation
• Disadvantages of quality control

  • It does not prevent waste
  • Inspection can be costly
  • It does not encourage workers to be responsible for quality
• Advantages of quality assurance

  • It should reduce wastage and costs
  • All workers are responsible for quality which may motivate them
  • If quality goods and services result it will improve the reputation of the business
• Disadvantages of quality assurance

  • Workers may be stressed by the responsibility of having to check the quality of their own work
• Face-to-face selling


  When the buyer and seller meet, e.g. in a shop
• Telesales


  The buyer buys from a telesales worker by phone
• Advantages of face-to-face selling

  • Can increase sales
  • Useful where customers like advice and personal service
  • Can help sales in business-to-business selling
  • The customer can bargain with the seller
• Disadvantages of face-to-face selling

  • May not always be convenient for customers
  • If the customer bargains, profits may be reduced
  • Retailer costs are high if expensive shops are needed
• Advantages of telesales


  • Can increase sales
  • Customers can ask questions and bargain
  • May cost less than selling from a shop
• Disadvantages of telesales


  • Costs involved such as a warehouse and payment to telesales workers
  • Sellers may 'cold call' which can be a nuisance to customers