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11 Cards in this Set
- Front
- Back
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What is added value? |
Added value is the increase in a product's value that a business creates during the production process. |
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How is added value calculated? |
The difference between: Cost of raw materials & Selling Price |
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How might added value be increased? |
• Purchasing cheaper raw materials • Improving efficiency of the production process • Raising the price of the product • Achieving brand status • Offering additional services with a product • Improving customer access or convenience |
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What are the three types of production? |
• Job production • Batch production • Flow / mass production |
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What is job production? |
When a single item is produced based on customer specifications. Unique products are created, made one at a time. It is labour intensive and needs skilled workers. Examples of projects that would use this are:
• Wedding dresses • Football stadiums • Custom made suits • Bridges |
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What are the advantages and disadvantages of job production? |
Advantages: • High quality products matched to customer needs • Employee satisfaction (personal achievements, interesting tasks) Disadvantages: • Increased production times • More expensive products |
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What is batch production? |
Manufacturing a limited number of identical products. A batch will be made, production stops, gets reorganized, and a new batch of a different product will be made: • A batch of Size 12 of clothing would be manufactured, then a batch of Size 14 would be made. |
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What are the advantages and disadvantages of batch production? |
Advantages: • Lower unit costs and higher output • Allows a business to aim at niche markets Disadvantages: • Semi-skilled workers with reliance on financial rewards • Time is lost when production has to be reset |
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What is flow/mass production? |
Continuous production of an identical product batch - the product will flow from one stage of production to the next. Examples are: • Fizzy drinks • Televisions • Mobile phones • Newspapers |
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What are the advantages and disadvantages of flow/mass production? |
Advantages: • Lower labour costs and unit costs • Large quantities produced, can be sold at a lower price Disadvantages: • Breakdowns can halt the production line • Expensive machinery • Limited product range |
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What are the factors that affect the type of production that a business uses? |
• The product • Cost of labour • Cost of capital • Money available for investment • Technology • Workforce skill • Market size • Customer requirements |
