Different types of production process

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5 Terms

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Production

the transformation of resources into finished goods or services

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The method of production used by a business will depend upon a number of factors

  • The level of output required to be produced

  • The nature of the product

  • Whether the product is standardised or customised

  • The level of automation used in production

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Job Production

Manufacturers produce one product at a time as ordered by the customer

  • High quality product

  • Motivated and highly skilled workers

  • Customised products can be produced

  • Production is slow

  • Labour costs are high

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Flow production

Continuous manufacturing of standardised products, usually on a product line

  • Low unit costs due to economies of scale (occurs when increasing output by a business leads to lower long-run average costs)

  • Rapid production

  • Usually highly automated (capital intensive - predominatly using machinery in the production of goods/services)

  • Customisation is difficult

  • Capital equipment can be expensive to product

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Batch production

Groups of the same product are produced as a batch e.g. 1000 blueberry muffins

  • Workers can specialise

  • Production can take place as the previous ‘batch’ starts running out

  • Requires careful coordination to avoid shortages

  • Money is occupied in stock

  • Completed products need to be stored