Chapter 11:The Production Function

Systems

An orderly arrangement of parts to achieve a specific outcome.

Production planning

The plan used in the production process to decrease cost, time, and increase output.

Production control

Managing individual tasks in the production process for the best result.

Routing

Determining the best and cheapest sequence of operations.

Scheduling

Working out the time required for each production task.

Loading

Assigning work to workers and machines.

Dispatching

Converting planning into action with instructions for material movement.

Following-up

Ensuring scheduling and production systems run according to plan.

Inspection

Checking the quality of the process and final product.

Corrective action

Involves adjustments to the planning process.

Safety management

Includes essential safety precautions in the workplace.

Occupational Health and Safety Act

Outlines health and safety roles of stakeholders.

Quality control

Inspection of the final product to meet required standards.

Quality management systems

Framework to manage key processes meeting standards.

SABS

South African Bureau of Standards maintaining standards in South Africa.

Workplace Safety Reasons:

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Ensuring compliance with laws and regulations to avoid penalties.

Workplace Safety Reasons:

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Demonstrating care for workers' well-being and health.

Workplace Safety Reasons:

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Preventing lawsuits, fines, and financial troubles due to accidents.

Workplace Safety Policy:

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Document outlining safety management measures and controls.

Workplace Safety Policy:

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Safety warnings and signs to inform employees of workplace dangers.

Workplace Safety Policy:

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Required and accessible kits with trained personnel for emergencies.

Workplace Safety Policy:

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Ensuring no hazardous substances, providing training on safety.

Workplace Safety Policy:

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Safety measures when handling machinery to prevent injuries.

Workplace Safety Policy Purpose:

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Establishing and maintaining a safety-focused environment in the business.

Workplace Safety Policy Purpose:

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Identifying those responsible for health and safety matters.

Workplace Safety Policy Purpose:

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Explaining how hazards will be controlled based on risk assessment.

Workplace Safety Policy Aspects:

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Acknowledging the right to a safe and healthy work environment.

Workplace Safety Policy Aspects:

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Recognizing the need to meet OHSA standards and prioritize safety.

Workplace Safety Policy Aspects:

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Reviewing and improving safety policies regularly for effectiveness.

Precautionary Measures for Machinery:

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Ensuring employees are trained and follow safety protocols.

Precautionary Measures for Machinery:

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Providing and mandating protective clothing and equipment for workers.

Occupational Health and Safety Act (OHSA) Purpose:

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Safeguarding employees' health, safety, and welfare in the workplace.

Occupational Health and Safety Act (OHSA) Requirements:

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Establishing and maintaining a secure work environment for employees.

Occupational Health and Safety Act (OHSA) Requirements:

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Outlining duties of various parties regarding health and safety.

Quality Control Definition:

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Process of maintaining consistent high-quality goods or services.

Raw Materials for Furniture Manufacturer

Includes timber (wood), hardware, and paint used in the production process.

Direct Labour Cost

Wages paid to workers directly involved in the manufacturing process, such as production line workers.

Fixed Overhead Expenses

Costs like factory rent, utilities, salaries, depreciation, insurance, and vehicle installments that do not vary with production levels.

Variable Overhead Expenses

Costs like electricity, telephone, indirect raw materials, and indirect labor that fluctuate with production output.

Total Production Cost Calculation

Sum of primary cost (material + direct labor) and overhead expenses (fixed + variable).

Unit Cost Calculation

Total production cost divided by the number of units produced.

Profit Calculation

Revenue minus total costs, where revenue is selling price multiplied by the number of units sold.

Break-Even Point

The level of revenue at which total costs equal total income, indicating the start of profit accumulation.

Contribution Margin

Selling price minus variable cost per unit, used to calculate the break-even point.

Break-Even Point Formula

Fixed costs divided by contribution margin, determining the number of units needed to cover costs.