Production of goods and services

Identify and explain two reasons why batch production is appropriate for BB.

Feb/March 2017

HCB makes cars in country X. Its factory employs 200 workers. New technology has caused the business to change its production method. HCB’s Managing Director is thinking about how it can act more ethically. She knows that other firms in country X have begun importing cars. Rising inflation has led to an increase in the interest rate in country X.

Feb/March 2023

Explain one benefit and one drawback to RW of using flow production.

Feb/March 2023

Javid is a company which produces a variety of luxury chocolates by using batch production. During the last year, profit has decreased because competition has grown. To reduce costs, the Finance Director has proposed that the company brings new technology into the production process. The Human Resources Director is uncertain that workers would gain from the introduction of new technology.

May/June 2015

Samah and Selina are thinking about buying ingredients from a different supplier named ABC (see Appendix 2). Identify and explain one advantage and one disadvantage to FF of switching to ABC.

May/June 2015

At a small factory, Rafiq works as the Operations manager. The business produces a range of soft drinks by batch production. Last year, Rafiq successfully brought in just-in-time inventory control after receiving an idea from one of the 40 employees. Because the business is preparing to expand, Rafiq believes that moving to flow production would be sensible.

May/June 2016

Saltan manufactures a range of cars. Inventory levels are too high, so the firm intends to cut output at its factory. Staff were informed that the business has to shrink its workforce as competition is rising. The trade union is unhappy that 360 of the 1200 skilled full-time employees at Saltan are due to be made redundant. A trade union spokeswoman commented: 'Saltan ought to shorten the hours of all employees instead of cutting the number of jobs.' Saltan's Operations Director is weighing up methods to raise efficiency in the factory.

May/June 2016

GKK manufactures plastic bottles for a variety of products, from food to chemicals. It sources its raw materials from a low-cost country. GKK has a broad organisational structure with a short chain of command, so delegation is possible. The Government intends to bring in new legal controls to safeguard the environment. The Operations manager commented: ‘The Government may meet one of its objectives, but what impact does that have on GKK? This is a competitive market, so prices matter.’ He aims to raise efficiency and intends to adopt lean production.

May/June 2017

TUKAN produces a variety of soft drinks through flow production. Employees are paid well, but they receive no non-financial rewards. A large proportion of staff leave the business each year. A reason often given for leaving is that they have no part in decision-making. In the last year, TUKAN’s revenue rose by $25m, yet profit did not rise. The Managing Director said: ‘The economy is currently in the growth stage of the business cycle. Even so, efficiency has to improve. Lean production methods could be useful. We also need to hire a new Operations manager who may have ideas about this.’

May/June 2017

JNK manufactures pottery such as plates and bowls for the mass market, and it does so by using batch production. Quality control matters. JNK employs 30 unskilled workers, all of whom are paid the legal minimum wage. To maintain motivation, JNK makes use of job enrichment. Because demand has risen, JNK is considering replacing its old machines with new technology. The Managing Director believes that some of the low cost materials bought by JNK may have been made using child labour. A competitor of JNK has lately brought in a new ethical policy.

May/June 2019

EGT makes a wide range of teas in different flavours. It operates batch production. The tea leaves, which are the chief raw materials, are supplied by local farmers. Because factory space is restricted, EGT cannot run an automated production line. The factory’s ageing machines frequently stop working. One employee handles quality control. EGT does not gain from economies of scale. The Human Resources manager recognises that poor motivation is an issue among its 80 employees. She intends to apply her understanding of Maslow’s hierarchy of needs to raise motivation. The owners want output to rise, but they cannot afford to relocate EGT to another site.

May/June 2019

Explain two reasons why FO needs to manage all of its resources efficiently when producing goods.

May/June 2021

WLT makes carpets and ships 40% of its products overseas. Globalisation has brought both chances and dangers for WLT. Its production method enables WLT to benefit from specialisation. Every one of its 60 employees knows that quality assurance matters. WLT’s directors are weighing up the most effective way to improve efficiency.

May/June 2023

KCL makes paper that is used to produce newspapers and books. KCL keeps a large inventory level and purchases all raw materials, including wood, from nearby suppliers. Quality control matters. The Operations Director is thinking about methods to raise efficiency in the factory. Pressure groups are attempting to shape KCL’s decisions so that the business does not generate more external costs than external benefits.

May/June 2023

Explain four causes of changes in consumer spending patterns for a product.

May/June 2024

NCE uses flow production in 4 factories to make cars. The Human Resources Director at NCE believes that strong induction training supports high productivity. Factory X is the most efficient of the factories. In the previous year, the new car market shrank by 20%. NCE must now make 400 workers redundant at another of its factories. “I am glad NCE is a large business,” said the HR Director. “I think a small business would not be able to survive in this competitive market.”

Oct/Nov 2015

PYG is a private limited company located in country A. PYG manufactures metal cans for food products by using flow production. The Operations Director has been reviewing the operations data in Table 1. In the previous year, PYG had difficulty replacing the 15 production workers who left the company. Most of PYG’s output is exported. The Operations Director believes that relocating production to another country could create more advantages than disadvantages.

Oct/Nov 2015

CGM produces high-quality shoes through job production. This production method relies on specialisation. CGM sells in a niche market. The managers at CGM recognise that every business activity generates external costs, so they always try to behave in ways that safeguard the environment. The Operations Director aims to raise profit. CGM could either purchase cheaper raw materials or bring new technology into the production process. The new technology would cost $30 000 and might cut the workforce from 30 to 26.

Oct/Nov 2017

HGH manufactures truck (lorry) engines through batch production. Quality assurance is important. Profit fell by 30% last year. After considering the information in Table 1, the Managing Director has chosen to shut one of its two factories. He stated: ‘The difficulties are high energy costs and tougher competition from imports. The Government ought to bring in measures such as import quotas to protect firms like us. If it does not, then both factories may have to close’.

Oct/Nov 2017

SOLS manufactures 5 styles of luxury men’s shoes using job production. SOLS operates in a niche market. Quality assurance matters. All inputs, including leather, are imported. SOLS uses cost plus pricing. The shoes are sold directly to customers through its website. The Managing Director said: ‘We can sell our shoes for $100 less a pair than our competitors because we have no shops.’ Demand is rising and the Managing Director must decide whether to switch to batch production.’

Oct/Nov 2018

TRB is a small firm in the secondary sector. TRB puts together computers. With the exception of the battery and the glass used for the screen, every component is brought in from overseas. 40% of its products are sold abroad. Many rival firms are moving to low-cost countries. TRB’s Operations Director believes the advantages of globalisation may outweigh the disadvantages for TRB. She is considering ways to raise factory efficiency. One possibility is to adopt lean production methods.

Oct/Nov 2018

HBN produces steel rods for the construction industry by using flow production. One method HBN relies on to motivate its 40 employees is job enrichment. Demand for steel rods has risen for HBN because of movements in the business cycle. Firms such as HBN are expected to have a policy on sustainable development. The Operations Director is looking at methods to raise steel rod output while still keeping quality high. The possible choices are shown in Table 1.

Oct/Nov 2019

YMG is a private limited company and the biggest producer of soft drinks in country Y. YMG makes 1 billion litres each year by using flow production. The Managing Director wants YMG to grow. He said: ‘My aim is to raise output to 3 billion litres during the next 5 years. This would let us begin selling our products in fresh markets in other countries. I realise import quotas and a shortage of local knowledge may create difficulties, but there are methods that could help us deal with them.’ The Managing Director also intends to put $60m into new technology to raise efficiency.

Oct/Nov 2020

NSN is a multinational company that manufactures cars. Over time, technology has altered production methods. NSN uses just-in-time inventory control in all of its factories. NSN intends to open a new factory in country Z, creating 7000 jobs. The Government of country Z has offered NSN an $80m grant. A spokesperson for NSN said: ‘Governments should support business activity. Other factors also influenced our choice to construct the new factory there, including the possible effects of economic growth.’

Oct/Nov 2021

SWB operates in the secondary sector. Each week it makes 150 000 wooden bookcases by using batch production. It sells all of its output to one customer. Quality control is important. SWB employs 240 workers, and 100 of them are part-time. To cut communication barriers, SWB’s managers use noticeboards placed around the factory and hold meetings with employees every month. The Operations Manager is thinking about bringing in just-in-time inventory control to cut the amount of waste.

Oct/Nov 2021

BEF is a sizeable business in country X. It uses flow production to make a broad range of products, including toothpaste and shampoo. At present, all of BEF’s products are sold only in country X. BEF recognises that effective internal communication methods matter. The Operations Director is examining production data. Table 4.1 gives an extract. BEF is thinking about exporting its products to country Y.

Oct/Nov 2021

Explain two advantages and two disadvantages of specialisation in a manufacturing process.

Oct/Nov 2021

Explain two advantages and two disadvantages of job production.

Oct/Nov 2021

SSG makes mobile (cell) phones through batch production. Maintaining quality control matters. SSG employs 130 workers, and every one of them gets on-the-job training. The Marketing Manager is studying cost and output information for product X. Table 1.1 shows an extract. Because product X is now at the maturity stage of the product life cycle, SSG is weighing up possible extension strategies.

Oct/Nov 2022

Explain one advantage and one drawback of using job production for BB.

Oct/Nov 2023

SNT is an ethical business. It makes a range of soft drinks through batch production. In 2023, SNT produced 300 000 bottles of soft drinks each week. Many factors influence the amount of inventory the business ought to keep. The directors of SNT plan to grow the business into new overseas markets by setting up a joint venture. They are also thinking about licensing as another method to help deal with the possible difficulties of entering these new markets.

Oct/Nov 2024

Explain two advantages and two disadvantages of CC when using batch production.

Oct/Nov 2024

Explain two advantages and two disadvantages of SA when it uses just-in-time (JIT) inventory control.

Oct/Nov 2024

KPX makes computers. The business brings in 60% of its raw materials from overseas. The Operations Director is looking at ways to apply lean production methods in KPX’s factory. The Finance Director is examining KPX’s financial information to work out the amount of its expenses. An extract appears in Table 1.1.

Oct/Nov 2025

Explain two reasons for FF using job production.

Oct/Nov 2025