Increasing Efficiency and Productivity

Flashcards covering key concepts related to increasing efficiency and productivity, based on your lecture notes.

How is efficiency generally measured?

By the inputs used to generate output.

What is the outcome when a process becomes efficient?

It uses fewer inputs to produce a given output, and unit costs should fall.

How can efficiency be described in terms of resource use?

Using resources effectively.

What is a primary way a business can increase efficiency?

Increase labour productivity.

Name three methods to increase labour productivity.

Offer incentives, provide training, and invest in machinery.

How can extending the overall scale of production help increase efficiency?

It can lead to economies of scale.

What does choosing an optimal mix of resources involve?

Deciding between capital-intensive (machinery) and labour-intensive (employees) production methods.

What production methods can be introduced to increase efficiency?

Lean production, including TQM, JIT, and Kaizen.

Besides specific production methods, what general tool can businesses use to increase efficiency?

Using technology.

What are economies of scale?

They arise when unit costs fall as output increases.

What are diseconomies of scale?

The disadvantages an organisation experiences due to an increase in size, resulting in a decrease in efficiency and an increase in unit costs.