Production of goods and services: productivity, lean production, inventory and production methods

Learning objectives

Work out labour productivity (the output of a period shared out per employee) and say what a rise or a fall in it means

Explain why an efficient business has an advantage and how efficiency can be raised, for example with more automation and technology or with better-trained workers

Describe lean production — cutting out waste — and its two methods, just-in-time (JIT) inventory control and Kaizen, and weigh what a business gains and risks by using them

Give the reasons a business keeps inventory and what decides how much of it to keep

Weigh the three methods of production (job, batch and flow) and choose the right one for a product you are given