Production of goods and services
Methods of production
| Method | What it is | Good for |
|---|---|---|
| job | one item at a time, to order | a wedding cake, a ship |
| batch | a group of the same item, then switch | bakeries, clothes sizes |
| flow | non-stop on a moving line | cars, drinks |
- Productivity = output per worker/machine in a set time. Raise it with training, better machines, motivation and organisation.
Practice
Making a single ship to order is an example of:
A one-off item made to order is job production; flow production is non-stop.
Practice
Productivity measures:
Higher productivity (more output per worker) lowers the cost per item.
Lean production & technology
- Lean production cuts waste (time, materials, space, effort) while keeping quality.
- Just-in-time (JIT) — materials arrive as needed, so little inventory is held: saves storage cost, but a late delivery stops production.
- Automation makes production faster and cheaper, but machines cost a lot and can replace jobs.
Practice
A drawback of just-in-time (JIT) is that:
JIT holds almost no inventory, so any delivery delay halts production.
You've got it
Key idea
- production methods: job (one-off), batch (groups), flow (non-stop)
- productivity = output per worker; raise with training, machines, motivation
- JIT holds little inventory (cheap but risky); automation = faster but costly