Ch 16,17,18,20, 21

1. Earnshaw is a company that buys raw materials and components in bulk. It uses them to manufacture
furniture using flow production methods. Productivity in the factory is high. Currently Earnshaw has high costs
of holding stock. The Managing Director wants to introduce lean production methods.

(a) What is meant by ‘productivity’?

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(b) Outline any two drawbacks of using of flow production.

Feature 1:

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Feature
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(c) Explain two benefits to Earnshaw of using lean production methods.

Benefit 1: ...................................................................................................................................................................

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Explanation:

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Benefit 2:
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Explanation:

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2. Sharma Machine manufactures motorcycles. The company is product orientated. Sharma Machine holds a lot
of stock. The owner, Ishant, wants to increase productivity. Also the company plans to open an additional
factory to satisfy increased demand. ‘Expansion should mean economies of scale’ said Ishant. ‘The right
location for the new factory is going to be important if the business is to remain competitive.’ Break-even level
for the new factory needs to be calculated.

(a) Outline two possible problems for Sharma Machine of holding a lot of stock.

Problem 1:

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Problem 2:

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(b) Explain three methods that Ishant could use to increase productivity.

Method 1:
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Explanation:

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Method 2:

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Method 3:

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(c) How important is the right location for the new factory in helping Sharma Machine to remain competitive?
Justify your answer.

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