Production

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Production

Methods of production 

  • Creating goods and services 
  • Job production - items are made indivually and finished before one is started
  • Batch production - items are made together. Each batch is finsihed before the other batch 
  • Flow production - identical, standardised items are produced on an assembly line 

Choosing a production method

  • Depends on the type of item and the size of the market
  • Small firms - job production - each customer has individual needs - costs less
  • Group orders - batch production 
  • Mass produce - flow production
  • Economies of scale lead to lower unit costs and prices
  • Fow production offers economies of scale and low costs for a one-size-fits-all product 
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Ethics

What is ethical behaviour?

  • Carefully consider the implications of what they are doing and the effect it might have on the community and the environment
  • About doing the right thing - act in ways that stakeholders consider to be fair and honest 
  • Impact - who does my decision affect or harm?
  • Faimess - will my decision be considered fair by those affected 
  • Some believe being ethical increases costs and reduces profits
  • Fairtrade Foundation has built an ethical brand image - customers are prepared to pay more 
  • Not being fairtrade can result in bad publicity 

Pressure groups 

  • Stakeholders can influence the business 
  • Pressure groups = organisations set up to try influence what we think about a buisness
  • Writing letters to MPs, contacting the press,organising marches,running campaigns
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Business environments

Social costs and the environment

  • Resources such as timber are used to manufacture goods
  • Forms noise and pollution
  • Land is lost 
  • Ethical businesses are careful to minimise the impact of their behaviour on the environment
  • Government laws are used to protect the environment - must have planning permission

Social benefits

  • Social benefits are business activities that have a beneficial or favourable impact on people or places 

 

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Location

The improtance of location

  • Location = the place where a firm decides to site its operations - have a big impact on costs and revenues
  • Customers - is the location convenient for customers?
  • Staff - are there sufficient numbers of local staff with the right skills willing to work at the right stage?
  • Support sevices - are there services offering specialist advice,training and support?
  • Cost - how much will the premises cost
  • Infrastructure refers to the facilities that support everyday economic activity 
  • An efficient transport network enables staff to get to work easily 
  • Grants - to help with the cost of setting up a business - does not need to be repaid
  • Loans - which are repayable over mabny years at low rates of interest
  • Tax breaks - firms may be made exempt frm paying business rates
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