Page 216 - Cambridge IGCSE Business Studies
P. 216
Cambridge IGCSE Business Studies Section 4 Operations management
Revision checklist Exam practice questions
● The production process takes 1 The table below shows the data for two companies which
inputs such as land, labour manufacture printers for use with computers. Both companies
and capital and converts these use fl ow production techniques.
into goods and services for use
by other businesses or for sale Production data Company A Company B
to the final consumer. Units produced per week 8,000 9,600
● The process of converting Number of workers 25 40
inputs into outputs might use
Labour productivity See question 1(b) 240 units per week
job, batch or flow production
Average weekly wage $160 $150
methods.
Profit per unit $24 $23
● The introduction of lean
production techniques and The directors of Company B are deciding whether or not to introduce
new technology into the
new technology into the production process. They have a report from
production process has
the Operations Director explaining the advantages and disadvantages of
brought many advantages,
doing so.
and some disadvantages,
for businesses, consumers a What is meant by ‘fl ow production’? [2]
and workers.
b Calculate the labour productivity for Company A. [2]
● Productivity measures
the efficiency of labour or c Identify and explain one advantage and one disadvantage of
capital and any improvement fl ow production. [4]
in productivity will reduce the
d Identify and explain two possible reasons why the labour
214 cost of producing each unit
of output. productivity for Company B is lower than that for Company A. [6]
● Most businesses hold e Do you think the directors of Company B should introduce new
inventories. The level of technology into the production process? Justify your answer. [6]
inventories held needs
careful management 2 Nice ‘n’ Spicy produces ready-made meals using the batch
to minimise the costs production method.
of holding and not
The company has been asked by a large national supermarket chain
holding them.
to supply it with one of their most popular dishes. It would need
5,000 units per week for the next 12 months and, if the product proves
popular, further orders will be placed.
Nice ‘n’ Spicy would need to invest in a new fl ow production line for this
order.
The Operations Director, Nasreen, realises this new order will increase
the raw materials she needs for production. She is thinking about
introducing just-in-time inventory management.
a What is meant by ‘inventories’? [2]
b Identify two inputs of the production process. [2]
c Identify and explain two advantages to Nice ‘n’ Spicy of batch
production. [4]
d Identify and explain two benefi ts to Nice ‘n’ Spicy of
just-in-time inventory management. [6]
e Do you think Nice ‘n’ Spicy should accept the order from the
supermarket chain? Justify your answer. [6]
Total available marks 40
