Edexcel A Level Business - 2.4.1: Production, productivity, and efficiency

Batch production

where you complete one operation at a time on all units before moving to the next

Capital intensive

Production methods that use machinery more relative to labour

Capital productivity

The amount of output each unit of capital (one machine) produces

Cell production

Involves producing a family of products in a small self-contained unit (a cell) within a factory

Division of labour

Specialisation in specific tasks or skills by an individual

Downsizing

The process of reducing capacity, usually by laying off staff

Efficiency

Producing a level of output where average cost is minimised

Flow production

Large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line

Job production

A method of production that involves employing all factors to complete one unit of output at a time

Kaizen

A Japanese term that means continuous improvement

Labour intensive

Production methods that make more use of labour relative to machinery

Labour productivity

The amount of output each unit of labour (one worker) produces

Lean production

An approach to operations that focuses on the reduction of resource use

Outsourcing

Giving work to sub-contractors to reduce costs

Production

The transformation of resources into goods or services

Productivity

The output per unit of input per time period

Specialisation

In business, the production of a limited range of goods

Standardisation

Using uniform resources and activities or producing a uniform product

capacity utilisation?

The current output of a factory measured as a percentage of the total maximum potential output.

capacity utilisation formula?

Current output/maximum possible output x100

buffer stocks?

Stock held by a business to cope with unforeseen circumstances e.g. sudden increase in demand, break down in supplies

lead time?

the delivery time from the re-order being placed and the stock arriving 

re-order levels

the amount at which a new order for stock is triggered 

just in time (jit)

A lean production technique used to minimise stock holdings at each stage of the production process 

qaulity controll?

The checking of a good or service before it is delivered to a customer i.e. at the end of the production process 

quality assurance?

The checking of a product or service at each stage of its production e.g. as it travels along a production line

total quality management (TQM)

TQM is an attitude towards quality assurance in which each employee is a link in the chain and treats the next link as if they were an external customer