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A-Level Edexcel Business 2.4 Resource Management - Coggle Diagram
A-Level Edexcel Business 2.4 Resource Management
capacity utilisation
capacity utilisation = (actual output/maximum output) x 100
how effectively a business uses its available production capacity
a business should be aiming for 80-90% capacity utilisation to maximise efficiency, lower unit costs, maintain flexibility and reduce strain on processes
the more units made means reduces the unit costs as - fixed costs are spread over more units, which lowers unit costs
methods of production
batch production
where goods are produced in groups or batches, with each bath going through one stage of production before moving onto the next
each stage will be completed before moving onto the next stage
higher output reduces unit costs, while production remains customisable and machinery can be used for efficiency
planning and coordination must be effective as delays between batches can slow production
job production
where a single product is made to meet specific customer requirements- often customised and produced one at a time
more labour intensive- highly skilled workers
expensive for the consumer
high quality
production costs are much higher
flow production
a continues process where identical products are made on the assembly line
usually used to produce large quantities of a standardised product- e.g.- cars
larger production results in lower unit costs due to economies of scale and output can be produced much more quickly
however products are standardised requiring large capital investment to set up, whilst workers perform repetitive tasks
high investment cost as machinery is expensive
cell production
where production is organised into small teams (cells) responsible for completing a specific part of the process
productivity is the measure of output produced per unit of input, such as labour or capital over a given period
labour productivity = (output during a period/ number of employees)
capital productivity = (output during a period/ number of machines)
efficiency is the ability to maximise output whilst minimising waste, time and resources in a production process
to improve efficiency, businesses can outsource, increase capacity utilisation invest in tech, and implement lean production
stock control charts
poor stock control can result in overstocking, which increases costs or stock shortages leading to missed revenue opportunities
lean production
originated in Japan after WW2- in toyota
the recourses they had they had to ensure they resources wernt being wasted
aims to maximise efficiency and eliminate waste
just in time
the business only receives inputs (e.g. raw materials) when they are exactly needed in the production process
by only receiving the inputs exactly when they are needed, waste (such as products going out of date) is eliminated
allows the business to hold less inventory, reducing costs on things such as where houses to store stock
in order for it to work, close relationships have to be maintained with key stakeholders (employees and suppliers)
kiazen
is continues improvement approach where small, ongoing changes are made to improve efficiency quality and processes
as this leads to significant changes and improvements over time
toyota reports that because of kiezen they receive over 1 mill new ideas annually
for it to be a success it must be embedded into the culture of a business where all employees embrace it
example- employees are able to stop the production line if they identify a defect to address the issue immidently
minimising waste and maximising efficiency
quality
quality control
regularly check and test products throughout production to identify and correct defects
quality assurance and total quality management
is a company wide approach ensuring contious improvement, employee involvement and customer focus in all areas
a proactive process that ensures products pr services meet specified standards
this can be acheived through:
all staff take responcibility for quality checks
employess are empowered
skilled employees are able to fix quality issues
quality circles are small groups of employees who meet regularly to identify and solve workplace quality issues