Rotalac Plastics Ltd
1. It is batch production because they are producing on a relatively large scale but they are also producing to orders. They are producing in bulk but they are producing lots of different products. They do not produce goods just in case as they don’t receive the order for the same product on a regular basis. It is not flow production because they produce lots of different products and it is not job production because they produce multiple products at once. 2. One advantage is that workers are specialised to swap the equipment efficiently between changing the batches. They need to clean the machinery and set it so that it makes the next order. This is an advantage because if they swap between machinery faster then productivity would increase. This means they could get through more orders in the same amount of time which means that fixed cost per unit is reduced. One disadvantage is the workers are specialised which means they will be more expensive to employ and they might need additional training at the company and that costs money. This is a disadvantage because that money could be invested in other things in the business. 3. Having the tool made would make it job production because they have received an order and would be specifically changing their equipment to suit an order. Also as it would take people a lot of time to order the new tool and it would cost money to buy the new tool. 4. One advantage of making customers pay for the tools for unusual goods is that it means the customer is more likely to go back to the business on multiple occasions as they have already paid the initial cost of buying the tool. This is an advantage because it means Rotalac will have more orders which will increase their revenue. Another advantage of making the customer pay for the tools is that if Rotalac pay for the tool and the customer doesn’t put in repeat orders then Rotalac have not lost the money on buying the tools. If they did pay for the...
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