Unit 4.1: Production of Goods & Services (Key Terms)

Key Terms

Lean Production

Lean Production

the production method to eliminate the 8 wastes so customers can get the best product

8 Wastes

movement, transportation, extra-processing, over-production, talent, defects, waiting, inventory

Just-in-Time (JIT) System

a business controls its inventory very carefully to avoid delays with product delivery

Production

the creation of a product or the delivery of a service that satisfies the consumers’ needs or wants

Labor-Intensive Production

when businesses use more labour in places where wages are low

Capital-Intensive Production

when businesses use more technology, such as machines and robots, to produce because of high wage costs

Productivity Formula

productivity = quantity of outputs/quantity of inputs

Labour Productivity

labor productivity = outputs (over a period of time)/number of employees

Kaizen

employees are involved in finding ways to eliminate waste and improve the production process

Cell Production

when the production process is organised into separate, self-contained units called “cells” and each cell is responsible for making a part of the finish product

Just-in-Case (JIC) System

stocking extra supplies just in case there’s an order in fear of not having enough

Job Production

a method of production whereby products are made according to the customer’s specifications so each product is unique

Batch Production

the process in which products are made in groups of the same item and they go through the production process together

Flow Production

producing a large number of standardised products in a continuous process, along a production line

Computer-Aided Design (CAD)

the use of specific software to design products

Computer-Aided Manufacturing (CAM)

when computers monitor the production process and control the machines

Electronic Points of Sale (EPOS)

where the operator scans the code on the product to register the prices when consumers are shopping and helps the business to monitor stock

Electronic Payments

where customers pay with their debit or credit card by using a device

Online Banking

enables people to buy goods or pay for services online

Automated Teller Machine (ATM)

customers can withdraw money from their accounts with a bank card and PIN number

Pull System

when production is based on actual customer demand and orders from dealers trigger production

Labour Turnover Formula

turnover = (# of leavers per year/# of employees per year)100%