Production and operations management, including quality and location
Domain 5: Production and operations management, including quality and location
This section tests production methods, productivity, quality and the factors that influence where a business locates.
Core rules
- Job production: one-off, customised output (e.g., a tailored suit). Batch production: groups of identical items (e.g., bread batches). Flow/mass production: continuous, standardised output (e.g., bottled drinks).
- Productivity = output ÷ input. It rises with better training, technology or organisation, not simply by working longer hours.
- Economies of scale lower unit cost as output rises; diseconomies can raise it through poor communication or industrial relations.
- Quality control inspects finished output and rejects defects. Quality assurance builds quality into every process. TQM involves all staff in continuous improvement.
- Location factors: proximity to market, raw materials, labour, transport, power, government incentives, competitors and climate. Footloose industries can locate widely.
Worked example
A bakery can make 1,200 loaves in a 10-hour day with 6 workers. Labour productivity is 1,200 ÷ (6 × 10) = 20 loaves per labour hour. If training raises output to 1,440 loaves with the same hours, productivity becomes 24 loaves per labour hour. The bakery locates near a town because bread is perishable and heavy; proximity to customers matters more than being near wheat farms.
Traps
Do not confuse quality control with quality assurance. Do not say flow production suits customised wedding cakes. Do not calculate productivity using only total output when the question asks per worker or per hour. Do not list location factors without linking them to the specific business.