Production and Operations: notes

Types of Production

• Primary: taking raw materials from nature, such as farming and mining.
• Secondary: making goods from raw materials, such as turning maize into mealie meal.
• Tertiary: providing services, such as transport and banking.
• Value addition: making a product worth more by processing it. Groundnuts made into peanut butter sell for more.

Factors of Production

• Land, labour, capital and enterprise. Land includes natural resources; labour is workers; capital is money and machines; enterprise is the organiser who takes the risk.

Methods of Production

• Job production: one item made to order, such as a wedding dress.
• Batch production: a group of identical items, such as a tray of loaves.
• Flow production: continuous making on a line, such as bottling soft drinks.

Efficiency and Control

• Productivity: output per worker or per hour.
• Quality control: checking goods meet the standard.
• Stock control: the reorder level is the stock level that triggers a new order, so the shop never runs out.
• Location: choose a site near customers, workers, suppliers and transport.
• Health and safety: protective clothing, fire exits and training prevent accidents.