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  2.  
  3. PEARSON (PEARSON)
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  5. Business
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  7. Unit 2 - Managing business activities

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Summary Production, Productivity and Efficiency
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Describes the different methods of production (e.g. batch or flow production), the advantages and disadvantages of each type of production, and how to chose the type of production. Also explains efficiency and productivity, and capital intensive and labour intensive production.

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  • September 28, 2020
  • 3
  • 2019/2020
  • Summary

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Theme 2 Topic 1
Production, Productivity and Efficiency Revision
Methods of Production
Production – creating goods and services. Managers have to decide on the most efficient way of organising
production for their particular product.

Job Production – items are made individually, and each item is finished before the next is started. E.g. designer
dresses.

Batch Production – groups of items are made together. Each batch is finished before starting a new block of
goods. E.g. a baker produces 50 white loaves and when they are finished, they make 50 brown loaves.

Flow Production (Mass Production) – identical, standardised items are produced on an assembly line. E.g.
most cars are mass produced in factories using conveyor belts – it is very capital intensive. Workers have
specialised jobs.

Cell Production – where each cell or production unit is responsible for the production of a complete item

Advantages Disadvantages
 Products are of a high quality,  Very time consuming and difficult
bespoke/unique to speed up production
 Allows some variety in production  Production is costly
Job Production  Can charge a high price  Skilled labour is expensive
 Motivated workers – more  Wide range of tools may be
productive and less absenteeism required

 Allows some variety in production  Difficult and time consuming to
 Fewer skilled workers are required change production line
 Flexible – can be changed  Breakdown of machinery can
 Can be mechanised cause major problems
 Employees become good at their  Machinery may need to be reset,
Batch Production job as they are specialised or ingredients changed
 Batches may have to be moved
during production process
 Work can be repetitive
 If one batch takes too long the
whole production line is held up.
 Little lost production time  Breakdown of machinery can
 Fewer skilled workers are required cause major problems
 Division of labour and  High cost of storing stock
specialisation  Huge cost of machinery
Flow Production
 Able to operate 24 hours a day  Work is repetitive so workers may
 Can bulk buy raw materials to be less motivated
make larger quantities  Very inflexible
 Less mistakes made


Choosing a Production Method
The best method of production depends on the type of product being made and the size of the market:

 Job Production is used by small firms in the service sector (e.g. plumbers because each customer has
different needs) and businesses in niche markets
 Batch Production – used to meet group orders e.g. a machine could be set to make 100 size 10
dresses and then be adjusted to make 100 size 8 dresses
 Flow Production – used to mass produce everyday standardised items e.g. toothpaste.

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