Production Methods
- Job production, where items are made individually and each item is finished before the next one is started. Designer dresses are made using the job production method.
- Batch production, where groups of items are made together. Each batch is finished before starting the next block of goods. For example, a baker first produces a batch of 50 white loaves. Only after they are completed will he or she start baking 50 loaves of brown bread.
- Flow production, where identical, standardised items are produced on an assembly line. Most cars are mass-produced in large factories using conveyor belts and expensive machinery such as robot arms. Workers have specialised jobs, for instance, fitting wheels.
Batch production is used to meet group orders. For example, a set of machines could be set up to make 500 size 12 dresses and then adjusted to make 600 size 12 dresses. Two batches have been made.
Flow production is used to mass produce everyday standardised (all the same) items such as soap powder and canned drinks. Economies of scale lead to lower unit costs and prices. Not many small manufacturers can afford the investment needed to mass produce goods. They instead opt for either batch or job production.
Just in Case
- Maximum stock level: the largest amount of items to be stored on site (500).
- Minimum stock level: the lowest amount of items to be stored on site (100).
- Reorder level: the amount at which new stock is ordered. 400 items are ordered and it takes two weeks lead time for ordered stock to arrive. There is always a buffer stock of 100 items held in case deliveries are held up or there is an unexpected large order.