The following factors will influence whether a business adopts one of the four methods of production considered - that is job, batch, flow or flow production with the development to mass customization.
SIZE OF THE MARKET
If the market is very small, such as for designer clothes, then job production is likely to be used. Flow production is most efficiently adopted when the market for similar or identical products is very large and consistent throughout the year. If mass production is used in this way, then mass marketing methods will also have to be adopted to sell the high output levels that can be manufactured. Even in a market for mass produced items, such as cars, there may be market niches that will allow smaller manufacturers to survive by making one-off products or batches of identical goods before changing the design or style for another model. If the market demands a large number of units, but at different times of the year, for example textbooks at the start of the academic year, then batch production might be most appropriate.
THE AMOUNT OF CAPITAL AVAILABLE
A purpose-built flow production line is difficult and expensive to construct. Small firms are unlikely to be able to afford this type of investment and are more likely to use job or batch production.
AVAILABILITY OF OTHER RESOURCES
Large-scale flow production often requires a supply of relatively unskilled workers and a large, flat land area. Job production needs skilled crafts people. If any of these resources are unavailable, or very limited in supply, then the production method may have to be adapted to suit available resources, given the market constraint referred to above.
MARKET DEMAND FOR PRODUCTS ADAPTED TO CUSTOMER REQUIREMENTS If firms want the cost advantages of high volumes combined with the ability to make slightly different products for different markets, then mass customization would be most appropriate. As was seen above, technology is giving firms the...
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