Unit 203 Outcome 1 Scales of Production Questions

Why are economies of scale significant?

• A. They lead to higher costs for products.

• B. They make businesses less competitive.

• C. They allow businesses to reduce cost per unit as production volume increases.

• D. They make production slower.

Answer explanation

Economies of scale are significant because they allow businesses to reduce cost per unit as production volume increases. This means that as a company produces more of a product, the average cost of producing each unit decreases, leading to higher efficiency and potentially lower prices for consumers.

As the amount of production increases, what usually happens to the prices of a product?

• A. They rise exponentially.

• B. They stay the same.

• C. They generally decrease.

• D. They become unpredictable.

Answer explanation

As the amount of production increases, the prices of a product generally decrease. This is because economies of scale come into play, allowing producers to lower their costs per unit as they produce more. As a result, they can pass on these cost savings to consumers in the form of lower prices.

Which of the following is a type of production method?

• A. number production

• B. Flow production

• C. Batch production

• D. Kaizen method

What exactly is a jobbing shop?

• A. A workshop where one can buy jobs.

• B. A workshop where single pieces or small batches are produced.

• C. A workshop specializing in large jobs.

• D. A design and improvement workshop.

Answer explanation

A jobbing shop is a workshop where single pieces or small batches are produced. Production by skilled and specialist machinists. Cost and labour intensive e.g. grinding and gear manufacturing. Single or very small batch production by skilled and specialist machinists.  Work Labour intensive. It focuses on creating custom or specialized items in limited quantities, rather than mass production. This type of workshop is ideal for handling unique or small-scale projects, as opposed to large-scale or design-focused workshops.

Why is one-off production considered an expensive method?

• A. Because it benefits from economies of scale.

• B. Because it is based on mass production.

• C. Due to the unique design and often manual labour involved for each product.

• D. Because it uses cheap materials.

Answer explanation

One-off production is considered an expensive method because each product requires a unique design and often involves manual labour. This results in higher costs compared to mass production using economies of scale, where the same design is produced in large quantities, reducing the overall cost per unit.

What role does CNC play in batch production?

• A. It helps improve product quality.

• B. It removes all manual labour.

• C. It automates and controls machinery and tools.

• D. It helps reduce costs.

Answer explanation

CNC, or Computer Numerical Control, plays a crucial role in batch production by automating and controlling machinery and tools. This technology allows for precise, consistent operations, which can significantly improve efficiency in a batch production setting. It does not necessarily remove all manual labor or reduce costs, but it does enhance product quality through its precision.

What is a major downside to mass production?

• A. It allows for a lot of customization for individual products.

• B. It results in unique and distinct products every time.

• C. It can lead to large quantities of unsold inventory.

• D. It is always the most expensive method of production.

Answer explanation

Mass production is a manufacturing process that produces high volumes of the same product. While it can be cost-effective, a major downside is the potential for large quantities of unsold inventory. This can occur if demand for the product decreases or is overestimated, leading to financial losses. The other options are incorrect as mass production typically limits customization and does not result in unique products each time.

Which type of labour is primarily used in mass production?

• A. Highly specialized craftsmen

• B. No labour is needed

• C. Semi-skilled or unskilled labour

• D. Skilled labour

Answer explanation

Mass production primarily uses semi-skilled or unskilled labour because it involves repetitive tasks that do not require specialized skills. Highly specialized craftsmen and skilled labour are more suited for custom or intricate work, while mass production focuses on efficiency and cost reduction. No labour is needed is incorrect, as human involvement is still necessary in various stages of mass production.

Economies of scale are essential because they:

• A. Increase the variety of products available.

• B. Ensure products are handmade.

• C. Result in decreased average costs with increased production.

• D. Prioritize individual customization.

Answer explanation

Economies of scale are essential because they result in decreased average costs with increased production. As a company produces more units, the cost per unit decreases, allowing the company to achieve greater efficiency and competitiveness. This concept does not directly relate to increasing product variety, ensuring handmade products, or prioritizing individual customization.

Which production method is best suited for producing unique, customized items?

• A. Mass production

• B. One-off production

• C. Batch production

• D. Continuous production

Answer explanation

One-off production is best suited for producing unique, customized items because it involves creating a single, tailor-made product according to specific customer requirements. Unlike mass, batch, or continuous production methods, one-off production focuses on individual customization and uniqueness, making it the ideal choice for creating bespoke items.