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 

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

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 

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