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Imran

0450-22-M-J-12-3e

Mahnoor

TOPIC QUESTION - PAPER 1

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Mahnoor

March 2, 2026 at 10:56:24 PM

May/June 2022

Version 2

4.0 Operations Management

4.1 Production of Goods and Services

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YOUR ANSWER

Flow production relies on capital intensive method, this reduces reliance on labour lowering wage cost, Furthermore machines donot require rest, production can operate 24 hours a day, maximizing total output, spreading fixed cost among high number of units, lowering average fixed cost, which can be passed on to customers through lower prices, making business accessible to mass market leading to high sales volumes, However If a machine breakdown, production line halts which leads to a massive output loss, and urgent repairs require high maintainance expenditure, reducing businesses profit margins,
Moreover batch production can also be used which provides a variety of products which can be altered according to customers taste and needs, attracting customers, increasing market share, However after every batch the machine needs to be reseted which delays productions and leads to high output loss and reduced efficiency
Flow production is the best method to use for a manufacturing business because it enables mass production at the lowest possible cost per unit. By utilizing capital-intensive methods and continuous 24/7 operation, it maximizes output while minimizing labour costs. This allows the business to benefit from significant economies of scale, offering products at competitive prices to access a large market share.

Grade: 

6/6

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