Show Menu

IB Business Management Unit 5.2 - Operations Mgmt Cheat Sheet by

Topic 5.2 Business Management Cheat Sheet for First Assessment 2024.

Job production

Creating a product from start to finish that is tailor made to meet customer requir­ements – usually one-off or unique items (e.g. violin, painting)
Only one person or group’s job to complete entire product
Small firms are likely to use job production

Advantages and Disadv­antages of Job production

High quality and uniqueness
High motivation of workers
More flexib­ility
Labor intensive and expensive
Time consuming due to customer requir­ements
Long workin­g-c­apital cycle (due to slow produc­tion)
Minimal economies of scale

Batch production

Producing limited number of identical products (batch) at a time (e.g. chocol­ates, CPUs, breeding)
Usually used when level of demand is not clear and the business produces a range of products

Advantages and Disadv­antages of Batch Production

Technical and purchasing economies of scale
Specia­lis­ation – better quality and produc­tivity
Variety – reduce risks of producing single product
Inflex­ibility – can’t stop once started
Storage costs
Boredom – reduced motivation

Flow/mass production

Continuous production process of standa­rdized products
Flow/mass are usually interc­han­geable
Generally capital intensive
Flow produc­tion: sequence of steps to create product (e.g. newspa­per­s/m­aga­zine)
Mass produc­tion: manufa­cturing large amounts of standa­rdised products (e.g. Chips)

Advantages and Disadv­antages of Flow/Mass

High production scale at low cost due to economies of scale
Initial high costs is spread over high volume of units
Standa­rdized quality (assuming low defect rate)
Low cost for workers
Low motivation
Breakdowns cause major delays
Inflexible – no reworking or custom­ization
High initial set-up, running, and replac­ement costs
Requires effective storage

Cell production

Modern adaptation of assembly line
Parts of production are delegated to teams or cells for completion
Any member of team can contribute to the task
Cells work indepe­ndently but rely on each other to achieve targets

Advantages and Disadv­antages of Cell Production

Certain degree of autonomy in decision making
Improved standards of quality
↳ Greater sense of respon­sib­ility and accoun­tab­ility in team
Higher levels of motivation (team working, empowe­rment, etc.)
Output may be lower
Higher chances for intra- and intergroup tension and conflict
Capital intensive to initiate and sustain

Labour and capital intensity

Labour intensive
Greater proportion of labour cost than capital cost
Job production and service sector is often labour intensive
Offers person­alised service but may have more HR issues
Capital intensive
High proportion of capital costs compared to labor cost
Leads to increased levels of output and produc­tivity
Needs sufficient demand to justify capital investment
Homogenous products; may have no USP
Standa­rdi­sation means low profit margins and high fixed costs
Choice depends on:
Relative cost and substi­tution
Market size
Aims and objectives of the organi­zation

Combining methods of production

Businesses usually combine the different methods of produc­tion, e.g. Burger King: uses batch production (making burgers in batches) and job production (custo­mizable burgers for custom­ers).
Possib­ility of custom­iza­tion, flexib­ility, and lower costs


No comments yet. Add yours below!

Add a Comment

Your Comment

Please enter your name.

    Please enter your email address

      Please enter your Comment.

          Related Cheat Sheets

          Nature of Business and Accounting Cheat Sheet
          IB Business Management Unit 1 - Introduction to BM Cheat Sheet
          IB Business Management Unit 5.1 - Operations Mgmt Cheat Sheet

          More Cheat Sheets by fatimaaaa

          IB Business Management Unit 1 - Introduction to BM Cheat Sheet
          IB Business Management Unit 5.1 - Operations Mgmt Cheat Sheet