Production processes: job, batch and flow
Production process means the way a business organises the making of its product. Job production makes one item at a time to a customer's specification, as a wedding cake maker or a bespoke tailor does: quality and flexibility are high, unit costs are high, and the work needs skilled staff.
Before you start
Make sure you're comfortable with these topics first:
Method
- Identify the product and the customer from the case study before naming a process. A product customers expect to be unique points to job; a standard product bought in volume points to flow.
- Give the definition, then apply it to the business in the question by name. Marks for application come from the detail in the case, not from a textbook sentence.
- Analyse in a chain: the process leads to a specific cost or quality effect, which leads to an effect on profit, competitiveness or the customer.
- For a recommendation, compare at least two processes and say why the rejected one does not fit this business, using a figure from the case where one is given.
- Use unit cost properly: total cost divided by output. Flow production cuts unit cost by spreading a large fixed cost over a very large output, so it only works if the output can be sold.
- Finish with a judgement that depends on something, such as it depends on whether demand is stable enough to justify the capital cost.
Worked example
Fenwick Furniture makes hand-built oak tables to customer order. Each table takes 30 hours of a skilled carpenter's time and sells for 1,400 pounds. The owner is considering moving to batch production of three standard designs. Analyse one benefit and one drawback of that change.
- Establish the current position: this is job production, since each table is made singly to a customer's specification, and the price of 1,400 pounds reflects the skilled labour and the uniqueness.
- Choose the benefit and make it specific: batch production of three standard designs means the carpenter repeats the same cuts and joints, so time per table falls and materials can be bought in larger quantities at a discount.
- Push the chain to a business outcome: lower unit cost means Fenwick can either cut the price to reach customers who cannot afford 1,400 pounds, widening the market, or hold the price and increase the profit margin on each table.
- Choose the drawback and make it specific: the selling point of the business is that the table is made for you, so standard designs remove the feature customers are paying a premium for.
- Push that chain too: customers willing to pay 1,400 pounds may go to another bespoke maker, so Fenwick could lose its most profitable customers and end up competing on price against large furniture retailers with far lower costs.
- Reach a judgement: the change makes sense only if there is a large enough market of customers who want oak furniture but cannot afford bespoke, and the safest route may be batch production of three designs alongside a bespoke service rather than instead of it.
Practice questions
Try each question, then tap to reveal the answer.
Q1Define job production and give one example.Show answer
Answer: Producing a single item at a time to meet a specific customer's requirements. Examples include a tailored suit, a wedding cake, a custom-built house or a bespoke piece of software.
Q2State two advantages of flow production.Show answer
Answer: Very low unit costs because fixed costs are spread over a huge output and workers specialise; high output and consistent quality because machinery repeats the same task identically.
Q3Explain one drawback of batch production.Show answer
Answer: Between batches the line must be cleaned or reset, which is downtime when nothing is being produced but wages and other fixed costs are still being paid, so unit costs rise.
Q4A bakery makes 200 white loaves, then 150 wholemeal, then 100 seeded. Name the process and explain how you can tell.Show answer
Answer: Batch production. Identical items are made together as a group, then the process is switched to a different product, which is the defining feature of batch.
Q5A business making 500,000 identical plastic bottles a day has total costs of 60,000 pounds a day. Calculate the unit cost.Show answer
Answer: 60,000 / 500,000 = 0.12 pounds, or 12p per bottle.
Q6Explain why flow production is risky if demand is unpredictable.Show answer
Answer: The very large investment in machinery is a fixed cost that must be paid whether or not the output sells. If demand falls, unit costs rise sharply because the same fixed cost is spread over fewer units, and unsold stock ties up cash.
Q7Give one reason a job production business might charge a higher price.Show answer
Answer: The product is made to the customer's exact requirements and cannot be bought elsewhere, so demand is less price sensitive, and the higher price is also necessary to cover the skilled labour and higher unit costs.
Exam-style questions
Written in the style of a GCSE Business exam paper, with a full mark scheme.
Aran Bikes assembles bicycles. It currently uses batch production, making 40 of one model before changing over to another. Each changeover takes 3 hours, during which nothing is produced. The owner is considering flow production of a single model. Total fixed costs would rise from 200,000 pounds to 500,000 pounds a year, but output would rise from 8,000 to 40,000 bikes. Variable cost is 60 pounds a bike either way. (a) Calculate the total cost per bike under each method. (b) Recommend whether Aran Bikes should change to flow production. Justify your answer.
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Evaluate whether a small business that currently uses job production should move to batch production in order to grow.
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See real GCSE Business past-paper questions, with official mark schemes →
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