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Flashcards in Higher Business Management Deck (6)
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1

STORAGE:
centralised + decentralised

CENTRALISED STORAGE:
all the stock is stored in one central area.

DECENTRALISED STORAGE:
all the stock is stored in different locations throughout the organisation depending on where the items are to be used.

2

STORAGE:
centralised + decentralised
Advantages + Disadvantages

CENTRALISED
ADVANTAGES:
- improved security
- supervised by specialist staff
- agreed procedures for issue/receipt
-agreed procedures for ordering
- bulk ordering/ storage may be cheaper
- increased efficiency in distribution
CENTRALISED
DISADVANTAGES:
-time wasting to go to and from stores
-cost of specialist staff
-cost of dedicated storage area

DECENTRALISED
ADVANTAGES:
- stock always 'on hand' when required
- orders of stock will reflect actual usage
- faster turnover of smaller amounts of stock reduces likelihood of deterioration/decay
DECENTRALISED
DISADVANTAGES:
- less rigid control - theft and loss more likely
- takes up space in production areas

3

METHODS OF PRODUCTION

JOB PRODUCTION:
here each 'job' is completed in its entirety before another job is completed. Thus, a single product is made at a time.

BATCH PRODUCTION:
all stages in the production process are completed at the same time. Products will have a marked degree of similarity, although different ingredients may be used for different products.

FLOW PROUDCTION:
this process uses the production line and the product passes through various stages along the line with component parts being added at each stage.

4

CAPITAL-INTENSIVE PRODUCTION

Capital-intensive production involves producing products that primarily use machinery and equipment to produce products.

Capital-intensive production can utilise either automation or mechanisation.

Automation: refers to production being fully automatic. This involves the use of computer aided manufacture to control fully automated assembly lines that use robotics.
Mechanisation: refers to labour and machines working together to produce products. A traditional example is a machinist operating a sewing machine in a textile factory.

5

LABOUR-INTENSIVE PRODUCTION

Labour-intensive production involves humans doing most of the work. This is most common in job production.

6

LABOUR-INTENSIVE PRODUCTION:
advantages + disadvantages

ADVANTAGES:
- labour is less expensive than capital intensive
- humans can use initiative and creativity, something that is often lacking in automated systems
-there's a constant supply of labour, often skilled labour, available in areas of the country with manufacturing traditions.
-employees are motivated as they are not 'giving up' tasks to machines
DISADVANTAGES:
- the business is at high risk of human error, resulting in waste. faulty products and disgruntled customers
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