The Production Function

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  • The Production Function
    • Definition
      • Technical relationship between product output and input of factors of production. It states the amount of product that can be obtained from every combination of factors assuming most efficient methods are used
    • Role of Production Function
      • Production manager must decide location. Industrial area will contain: pool of labour with particular skills, educational institutions geared to the needs of businesses and suppliers of raw materials and semi-finished products
      • Factory layout involves: location of plant, machinery in right place and grouping of departments for efficient production, suit needs of product. Factors that must be remembered: cost, available space, safety and comfort of workers
      • Materials go in one end undergo a series of changes and finished product comes out at the other end
      • Factory will be divided into different departments where they are responsible for a part of the finished product
      • Important to predict future demand for product correctly as later additions to capacity are expensive
      • Manager talks to purchasing manager on how many to produce, what materials to used and determining order of production- scheduling. Scheduling depends on type of production process (batch, jobbing or mass)
      • Work study- attempts to find quickest and most efficient way of doing a job by studying aspects layout of workplace, design of tools. Time measurement- aims setting standard time for each activity in production process

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