C) Batch production

- This is a method that falls between job and mass production, and may be said to be repeated production but not continuous production. It is employed where orders consist of a significant number of similar items but these orders are not sufficient to justify continuous manufacture.

- Industries offering choices of design or sophistication in their products make use of batch production, a notable one being the furniture industry. A batch of one design will be made and then a batch of another, and then perhaps the first will be run again. Labour is more skilled in this method of production than in mass production because of the variety of the work entailed, and machines are more versatile. It uses more labour, proportionately, than mass production and less machinery.

- Whether goods are made in advance of orders or subsequent to them depends not so much on the type of production method as on the situation in the market. A manufacturer using batch production will set a production run when orders for a particular item are received, but has the problem of making the run economically viable; in other words producing sufficient quantity to make the run profitable. He does this by adding a stock quantity to the ordered quantity. One of the most difficult problems in batch production is, in fact, this one of the deciding what is the economic batch size.

- Batch production can offer some of the cost saving advantages of mass production, but also allows the manufacturer to satisfy individual job orders if necessary because of his more versatile machinery and skilled workers. At no time, however, can the user of batch production methods compete in price with mass-production items.

II. Match the equivalents:

III. Answer the questions:

1. Which types of production do you know?
2. What can job production range from?
3. What kind of labour is used in job production?
4. Is machinery widely used in job production? Why?
5. Does an organization make goods for stock in job production? Why?
6. What problems does job production have?
7. Does mass production have any individuality? Why?
8. What kind of labour is used in mass production? Why?
9. What kind of machinery is used in mass production? Why?
10. Why is skilled labour required in mass production?
11. What mass-produced products can you name?
12. When can mass production be profitable?
13. Does an organization make goods for stock in mass production? Why?
14. What is usually done to increase profits in mass production?
15. How batch production can be characterized?
16. In what industries is it used?
17. What kind of labour is used in batch production?
18. Does an organization make goods for stock in batch production? Why?

IV. Match up these words with the definitions which follow:

Capacity, component, inventory, lead time, location, outsourcing or contracting out, plant, subcontractor

1. Any company that provides goods or services for another one.
2. Any of the pieces or parts that make up a product, machine, etc.
3. Buying products or processed materials from other companies rather than manufacturing them.
4. The (maximum) rate of output that can be achieved from a production process.
5. The buildings, machines, equipment and other facilities used in the production process.
6. The geographical situation of a factory or other facility.
7. The stock of any item or resource used in an organization (including raw materials, pans, supplies, work in process and finished products).
8. The time needed to perform an activity (i.e. to manufacture or deliver something).

V. After it has been decided what to manufacture, operations managers have to decide where to manufacture the different products, how much productive capacity their factories and plants should have, and how much inventory to maintain. Read 15 sentences below, and classify them under the following six headings. Some sentences may fall under two headings:

1. The consequences of insufficient capacity
2. The consequences of excess capacity
3. The advantages of large facilities
4. The disadvantages of large facilities
5. The advantages of having a large inventory
6. The disadvantages of having a large inventory
1. A long lead time may allow competitors to enter the market.
2. Average fixed cost per unit drops as volume increases because each succeeding unit absorbs part of the fixed costs, giving economies of scale.
3. Finding staff and coordinating material flow become expensive and difficult
4. If lead time increases, some customers may go to other suppliers.
5. Lost sales and market share are usually permanent
6. The working environment might worsen and industrial relations deteriorate
7. There are costs of storage, handling, insurance, depreciation, the opportunity cost of capital, and so on.
8. You can be more flexible in product scheduling, and have longer lead times and lower cost operation through larger production runs with fewer set-ups.
9. There is always the risk of obsolescence, theft, breakage, and so on.
10. You can meet variation in product demand
11. You may be under-utilizing your work force.
12. You have protection against variation in raw material delivery time (due to storages, strikes, lost orders, incorrect or defective shipments, etc).
13. You may be forced to produce additional less profitable products.
14. You can take advantage of quantity discounts in purchasing.
15. You may have to reduce prices to stimulate demand.

VI. Read the text below, and insert the words in the gaps:

Capacity, component, inventory, lead times, location, outsourcing, plants, subcontractor