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Business AS AQA

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  1. 1-1-the-nature-and-purpose-of-business as
    3 主题
  2. 1-2-forms-of-business as
    5 主题
  3. 1-3-the-external-environment as
    5 主题
  4. 2-1-management-and-leadership as
    3 主题
  5. 2-2-management-decision-making as
    4 主题
  6. 2-3-the-role-and-importance-of-stakeholders as
    3 主题
  7. 3-1-marketing-objectives as
    1 主题
  8. 3-2-understanding-markets-and-customers as
    5 主题
  9. 3-3-making-marketing-decisions as
    2 主题
  10. 3-4-the-marketing-mix as
    7 主题
  11. 4-1-operational-objectives as
    2 主题
  12. 4-2-operational-performance as
    1 主题
  13. 4-3-efficiency-and-productivity as
    3 主题
  14. 4-4-quality as
    1 主题
  15. 4-5-inventory-and-supply-chain-management as
    3 主题
  16. 5-1-financial-objectives as
    2 主题
  17. 5-2-financial-performance as
    6 主题
  18. 5-3-sources-of-finance as
    3 主题
  19. 5-4-cash-flow-and-profit as
    1 主题
  20. 6-1-human-resource-objectives as
    1 主题
  21. 6-2-human-resource-performance as
    1 主题
  22. 6-3-organisational-design as
    3 主题
  23. 6-4-human-resource-planning as
    4 主题
  24. 6-5-motivation as
    1 主题
  25. 6-6-improving-employer-employee-relations as
    2 主题
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Exam code:7131

Using capacity efficiently

  • Efficiency means producing with the fewest possible resources

    • Using less time, labour, materials or energy

Why efficiency matters

  • Lower costs per unit

    • Spending less on inputs increases profit margins or allows lower selling prices to compete better with rivals

  • Higher competitiveness

    • Efficient firms can respond quickly to orders, which attracts and retains customers

  • Better use of resources

    • Cutting waste frees up cash and reduces a business’s environmental impact, meeting both financial and sustainability objectives

Ways to use capacity efficiently

Way

Explanation

Example

Streamline the workflow

  • Put jobs and machines in the sequence they are done so items move forwards, not back and forth

  • McDonald’s arranges its kitchens in a U shape

  • Burgers travel in one smooth line, cutting serving time

Invest in automation

  • Let robots, conveyor belts and machinery handle jobs people would otherwise do by hand

  • Amazon uses robots that fetch items from shelves for packers, speeding up each order and reducing walking time

Train staff

  • Teach staff to switch workstations and spot problems early so the production line keeps moving when a worker is absent or a fault emerges

  • Starbucks baristas learn to make drinks, take payments and restock shelves, preventing delays at busy times

Introduce just-in-time (JIT) inventory management

  • Have materials and components delivered right before use instead of storing weeks of stock

  • Toyota’s factories receive car seats hours before installation, saving warehouse space and cash

Preventive maintenance

  • Regular checks on machinery and small repairs stop big breakdowns that halt production

  • FedEx services its aircraft engines on a tight schedule, keeping planes flying and parcels on time

Difficulties increasing efficiency

  • Improving efficiency in production is not always easy

  • Difficulties can arise for a range of reasons

Flowchart showing difficulties of increasing efficiency: high upfront costs, employee resistance, quality and safety issues and supply chain issues.
Difficulties of increasing efficiency include employee resistance to change and high upfront costs

Why increasing efficiency can be difficult

Difficulty

Why it makes efficiency gains hard

Example

High upfront cost of new equipment

  • Modern robots or faster machines can save money in the long run, but the initial cash outlay is large and risky — especially if sales are uncertain

  • Greggs shelved plans for fully automated sandwich lines in 2021

  • The £100m cost was too high after the business suffered losses during the pandemic

Employee resistance to change

  • New methods may alter job roles or require fresh skills

  • Staff and trade unions can slow or block changes if they fear job cuts or tougher targets

  • Royal Mail faced strike threats when introducing automated sorting machines, delaying their introduction for several years

Supply chain bottlenecks

  • A factory cannot run faster if key parts or materials arrive late or in short supply

  • Ford repeatedly paused car production in 2021 because the global microchip shortage meant factories lacked these essential components

Quality and safety trade‑offs

  • Increasing production speed without proper checks risks defects or accidents

  • Firms may have to slow back down to fix errors, wiping out any efficiency gains

  • Boeing accelerated 737 MAX assembly in 2018, but quality issues forced extra inspections and rework

  • This increased costs and delayed deliveries

Efficiency and labour productivity

  • Labour productivity is the amount of output each worker produces in a given period of time

    • Higher productivity means the same team turns out more products in the same working hours

  • Labour productivity is expressed in units and is calculated using the following formula:

Labour space productivity space equals space fraction numerator Total space output over denominator Number space of space workers end fraction

Worked Example

Green Man Fisheries prepares a wide range of high-quality seafood dishes that it sells to restaurants. Its most popular product is dressed crab.

Its 12 workers produced 1,404 boxes of dressed crabs in May. In June, the business employed one more worker, and output increased to 1,677 boxes of crabs.

Calculate the difference in labour productivity between May and June.

[3]

Answer:

Step 1: Calculate labour productivity in May

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