Business Theme 2 Key Definitions 2.4

All of the key terms for business 2.4

Job Production

One off items to meet the needs of each individual customer

e.g. Wedding Cakes

Batch Production

Identical Items produced in batches, going through the same production line

e.g. Bakeries

Flow Production

Along an assembly line in continuous process

Cell Production

A form of flow production where the production line is split into cells

Kaizen

Continuous Improvement

Productivity

A measure of the efficiency in the production process

output/number of workers

Capital Intensive Production

Large % of total costs are ties up in purchasing machinery

Labour Intensive Production

Labour costs make up for a high % of total costs

Capacity

The maximum amount of resources that can be utilised

Capacity Utilisation

A measure of the % of potential output being achieved

Current output/Maximum possible output x 100

Under Utilisation

Demand is less than the total capacity

Over Utilisation

Demand is Greater than the capacity available

Quality assurance

Checking quality at each stage of the production process

Quality Circles

Quality circles are informal groups of workers who volunteer to meet and discuss issues with the businesses processes/products

Quality Control

A team who make sure all products are up to the right quality at the end of the production process

Just in Time

Ordering stock so it arrives just as current stock runs out

Just In Case

Holding buffer stock incase stock runs out early

Buffer-Stock

Stock that is held back as reserves in case there are any issues