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Stock exists in 3 types:
Works in progress
Holding too much
Not having enough
Stock ready to go
Money can be
Stock can go out of
fashion or spoil
Can‟t fulfil orders
Production may stop
Factors of Production
Land – all natural resources used in
Labour – all people used in production
Capital - all items used to make other
things in production
Enterprise – the art of bringing together the
other factors of production and being
Methods of Production
How do we select a method of
The nature of the product itself
Is it labour or capital intensive?
Describe the Factors of Production for:
Royal Bank of Scotland
Job Production concentrates on
producing one product from start to
finish. Once one product is complete,
another can begin.
It is extremely labour intensive
Job Production +/High quality product
Workers involved in
process from start to
likely to be high
Production time may
machinery may be
higher as specialist
equipment may be
Batch production enables items to be
created in bulk („a batch‟)
General purpose equipment and
methods are used to produce small
quantities of items that will be made and
sold for a limited time only
Commonly used in food production
Batch Production +/Allows flexible
Stocks of partfinished goods can be
held and completed
Production runs of
small batches can
be expensive to
If production runs
are different there
may be extra costs
and time delays in
setting up different
Aka continuous production, flow
production enables products to be created
in a series of steps.
Large amounts of goods produced and is
highly capital intensive (machinery,
Cars are massed produced for a
large market using flow production
Flow Production +/Economies of scale
production lines save
time and money
High set-up costs of
Quality systems can
be built into the
Prepare a presentation which compares
the different methods of production:
Ensure you have appropriate text, images
Include some advantages & disadvantages
Also include a short quiz to test other
What is quality?
Why is quality important?
Definitions of Quality
“The standard of something as measured
against other things of a similar kind; the
degree of excellence of something.” – Oxford
"Quality in a product or service is not what
the supplier puts in. It is what the customer
gets out and is willing to pay for.“ - Peter
"Degree to which a product/service fulfils
customer requirements.“ - ISO 9000:
"Number of defects per million opportunities.“
- Six Sigma
“Quality is everyone‟s
- W. Edwards Deming
Employees – Investors in People
Raw Materials – GIGO
TQM - Quality Management
Total Quality Management
Commitment - Everyone is involved in
Get it right first time - aims for zero
defects & wastage
Kaizen – continuous improvement
Other Quality Methods
ISO 9000 is an international standard. Inspectors check if the company:
can answer these questions.
Does it have a quality policy?
Is the policy understood by employees?
Does it make decisions about quality systems based on recorded data
Are the Quality systems regularly evaluated?
Do they have records of where raw materials & products were sourced?
Does it communicate with customers about product information,
inquiries, orders, feedback, and complaints?
Does it plans new product development, with appropriate testing at
Does it regularly review performance?
Does it deal with past & potential problems?
As part of Literacy across learning, you will
prepare and present a solo talk on this
does Quality mean to you?”
Ethical and Environmental
Firms now have to socially responsible.
They can do this by:
Low pollution levels
Fair employee working conditions
Pay workers a fair wage