3.2 Production (Operations Management)

3.2.1 Using resources to produce goods and services
Understand how resources can be used and managed to help organisations achieve their objectives • Understand the difference between production and productivity • Identify factors that increase productivity

3.2.2 Methods of production (job, batch, flow)
Explain job, batch and flow production methods • Describe the main features of different production methods • Explain the advantages of the different methods • Select and justify methods appropriate to a given situation

3.2.3 Scale of production
Understand economies and diseconomies of scale • Explain the concepts of economies and diseconomies of scale [theoretical knowledge NOT required] • Understand the reasons why economies and diseconomies occur • Identify examples of economies and diseconomies of scale

3.2.4 Lean production
• Identify and explain ways of implementing lean production methods

3.2.5 Costs and cost classification
State and explain the cost structure of a business

• Demonstrate understanding as to why the process of production generates costs

Classify costs into fixed and variable/direct/indirect

• Identify examples of different types of costs using the fixed and variable classification

3.2.6 Break-even analysis and simple costbased decisionmaking
Explain, interpret and use a simple break-even chart

• Construct a simple breakeven chart

• Interpret a given chart and use it to analyse a situation

• Show understanding of the limitations of a break even chart

3.2.7 Quality control Appreciate the importance of quality control
• Understand the concept of quality control

• Explain why quality control matters to a business

3.2.8 Location decisions
Show understanding of the main factors influencing a firm’s location and relocation decisions

• Identify and explain factors relevant to the location decisions of a manufacturing business

• Identify and explain factors relevant to the location of a service based business

• Show awareness of factors that a business considers in determining which country to locate itself

• Recommend and justify an appropriate location for a business in a given situation

3.2.9 An appreciation of how production can be made more efficient
Understand the concept of productivity

• Awareness of the concept of turning resource inputs into an output

Awareness of methods of improving efficiency e.g. automation, new technology

• Show awareness of the implication of change for production methods and labour skills