Source A
GreenTech Solutions is a manufacturer of eco-friendly home appliances. The company has recently expanded its production capacity to meet growing demand. GreenTech uses a combination of job production for custom orders and flow production for standard products. The company has invested heavily in automation and robotics to improve efficiency and reduce costs. This investment has allowed GreenTech to increase its output while maintaining high-quality standards. The company's management is considering further automation to stay competitive in the market.
Source B
| Production Method | Output (units) | Labour Cost (£) | Machine Cost (£) | Total Cost (£) |
|---|---|---|---|---|
| Job Production | 500 | 25,000 | 5,000 | 30,000 |
| Batch Production | 2,000 | 40,000 | 10,000 | 50,000 |
| Flow Production | 10,000 | 60,000 | 20,000 | 80,000 |
| Total | 12,500 | 125,000 | 35,000 | 160,000 |
a) Define the term 'production'. [2 marks]
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Production is the process of creating goods and services to satisfy consumer needs. It involves the conversion of raw materials and resources into finished products.
b) Calculate the total cost per unit for each production method using Source B. [3 marks]
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Job Production: £30,000 / 500 units = £60 per unit Batch Production: £50,000 / 2,000 units = £25 per unit Flow Production: £80,000 / 10,000 units = £8 per unit
c) Explain how technology has changed production methods at GreenTech Solutions. [4 marks]
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Technology has changed production methods at GreenTech Solutions by introducing automation and robotics. This has increased efficiency and reduced costs. Automation allows for faster and more consistent production, while robotics can handle tasks that are dangerous or repetitive for human workers. This has enabled the company to increase its output and maintain high-quality standards.
d) Analyse the benefits and limitations of each production method used by GreenTech Solutions. [6 marks]
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Job Production: Benefits: Customisation, flexibility, and high-quality products. Limitations: High cost per unit, slow production, and limited output. Batch Production: Benefits: Moderate customisation, faster production than job production, and lower cost per unit. Limitations: Higher cost per unit than flow production, and limited flexibility. Flow Production: Benefits: Low cost per unit, high output, and consistent quality. Limitations: Limited customisation, inflexibility, and high initial setup costs.
e) Evaluate the impact of further automation on GreenTech Solutions' production methods. [5 marks]
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Model Answer: Further automation could significantly improve GreenTech Solutions' production methods. It could increase efficiency, reduce costs, and improve product quality. However, it may also lead to job losses and require significant investment. The company should consider the long-term benefits and potential challenges before making a decision. Level of Response: Level 1 (1-2 marks): Basic identification of potential impacts. Level 2 (3-4 marks): Clear analysis of both benefits and limitations. Level 3 (5 marks): Detailed evaluation with justified recommendations.