Edexcel Business A Level Revision

Flow production - Items flow along the production line in a continuous process making high volumes of the exact same product. Once one task is finished the next task is started immediately, therefore time taken on each task must be the same. FLOW PRODUCTION ADVANTAGES DISADVANTAGES Costs per unit of production are reduced through improved work and material flow Very long set up time and reliant on high quality machinery, so if machinery breaks and therefore breaks the flow, production will be shut down Suitable for manufacture of large quantities High raw materials and finished stocks unless lean production is used Capital intensive which means it can work constantly without the interference of employees Goods are mass produced which means there is no customisation to meet specific needs for customers Less need for training and skill as most work is done by machines Uses specialist machinery so investm...

Maximum capacity - the maximum amount of output achievable if all resources are fully utilised. Capacity Utilisation - measures what proportion or percentage of the theoretical maximum possible outcome is actually produced. Under - utilization of capacity - means that some resources are not being used and production is not as high as it could be Over - Utilisation - means that the business is trying to produce more than its capital equipment was design for Unit costs - TOTAL COSTS (FC + VC) / CURRENT OUTPUT Within an individual business, capacity utilisation shows how much of the company's resources are actually in use. If all available resources, all labour, machinery and space are in use at any one time, the business cannot produce any more output and is said to be at 100% capacity utilisation. In the long run capacity CAN BE INCREASED by acquiring more resources e.g. bigger premises, more machinery, introducing a 3rd shift In the long run capacity CAN BE REDUCED...