Production Management and Environmental Protection in Business
ITEM 6: Area of Production
Production Process
In charge of designing the production process, transforming input to output. Produce in accordance with technical specifications to minimize costs and protect the environment.
Definition: Development of goods or services obtained through the combination of productive factors that serve to cover needs.
Technology
How to combine productive factors to produce. Different ways of producing a good.
Productivity
Yield in the production process. It is the relationship between the quantity produced and the factors of production employed.
Efficiency
Criteria for classifying technologies:
- Technical Efficiency: Technologies that are more capable of making the same factors of production will be more efficient or that manufacture the same thing in less time.
- Economic Efficiency: Serves to unbalance. If you have two equally efficient technologies, taking into account the cost of each, it will be more efficient than producing the same thing that is cheaper.
Costs Depending on the Quantity Produced
- Fixed Costs: Costs involved in business regardless of the quantity produced, even when these costs do not exist. Are constant and always the same. For example, the local rental.
- Variable Costs: In terms of production, higher production, higher costs.
- Average Costs: The unit cost.
- Marginal Cost: Relationship between rising costs over which increases production. Is the cost caused by the last unit produced. Is the slope of the tangent line.
Costs of a Company that Manufactures More Than One Product
- Direct: Caused by the product itself, taking into account its size.
- Indirect: Costs that can be applied to all products manufactured and are considered a part. These costs are industrial and commercial administrative, financial and general business.
Income
Calculated by calculating the value of their sales. Total revenues are the product of unit price and quantity sold.
Deadlock or Threshold of Profitability
The amount of production that makes a company obtain economic performance equal to 0, where neither win nor lose. B° = IT-CT.
Production Management
Factors to Consider in the Production Department
- Capacity: Maximum amount of production that can meet a company due to the limitation that it has with its productive factors. For example, as much as increased labor if I have only one machine production is limited.
- Demand for the Product: The amount of product to be sold is determined by demand, i.e., the interests of customer buying. No matter how good the product, if you do not like it, it will not sell.
- Economic Environment: All surrounding a company’s conditions.
Planned Production
- Strategic Plan: Long-term forecast of production of the company.
- Sales Forecasting: Sales potential.
- Master Production Plan: Material needs and production costs to make.
- Production Program: Determining the orders and the conditions and deadlines to suppliers and customers.
Control Planning
- Operational Control: Monitor the production technique.
- Economic Control: Control of production costs.
Quality in Business
A set of features and technical specifications that define a product.
Quality Management
Does not look for high quality but just what the product needs. Can be carried out through:
- Inspection techniques
- Process control
- Integrated quality management with the participation of all areas of business
- Total quality expanded the concept of quality to the organization as a whole taking into account staff and client expectations, fostering teamwork.
Environmental Protection
Environment
It is essential that the elements on the environment are fully integrated into all business activity.
Environmental Management
Driven by 4 factors:
- Regulations, legislation increasingly tough environmental impact.
- Through the civil or criminal liability of the company.
- Company: Society welcomes those companies that take into account environmental protection and rejects those that do not.
- Economic factors can help improve economic performance by offering advantages over competitors.
- Business ethics: values and principles of the company should incorporate this environmental awareness.
Externalities or Social Costs
The impact that the company could have on the environment. Can be positive or negative. In the case of environmental impact and no weight charges borne by the company but on society.
Environment: Business Opportunity
Business opportunities arise around the environment in two ways:
- Reduction of environmental impact: Control and treatment of pollution treatment and cleaning technologies, recycling.
- Environment: Creating clean technologies, waste reduction.