A manufacturer of emergency torches has been asked to supply 30 000 units to a relief organisation within two months. Its manager can use existing workers o...
Question 1 Report
A manufacturer of emergency torches has been asked to supply 30 000 units to a relief organisation within two months. Its manager can use existing workers on overtime, recruit temporary workers, or introduce an automated battery-fitting machine. The business has sufficient factory space, but the machine would require staff training and a large initial payment.
(a) Identify one fixed cost of buying the automated machine. [1]
(b) Explain one advantage of automation for this order. [2]
(c) Explain one disadvantage of automation for the business's workers. [2]
(d) Calculate the output per day needed to make 30 000 torches in 50 production days. [1]
(e) Which production process is likely to be used for this large order of identical torches? [1]
(f) Explain one reason why quality control is important for emergency torches. [1]
Answer Details
(a) A fixed cost is the purchase or installation cost of the automated machine [1]. This cost is incurred even if output later changes.
(b) The machine can fit batteries quickly and consistently [1]. This increases output or reduces unit labour costs when producing a large order of identical torches [1].
(c) Workers may need retraining or some jobs may be lost [1]. This can reduce morale or create redundancy costs for the business [1].
(d)
\[\text{Required output per day}=\frac{30000\text{ torches}}{50\text{ production days}}=600\text{ torches per day}\]
600 torches per day [1].
(e) A large order of identical torches is likely to use flow production or mass production [1].
(f) Quality control is important because a faulty torch may fail in an emergency, harming customers and damaging the business's reputation [1].
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