Flight Food (FF) FF is a large secondary sector business that supplies airlines with in-flight meals. Meals are manufactured using batch production. A different variety of meal is made each hour with a five minute changeover time between batches. FF makes use of Just in Time (JIT) to manage inventory wherever possible. Trucks arrive each hour and deliver the materials needed for production. The market for airline meals is very competitive. FF uses market segmentation when deciding which meals are most likely to appeal to different airlines. FF must adapt to changes in tastes and the demands of each airline. FF is a labour intensive business. The workers are employed with short-term (six month) employment contracts. They are only offered new contracts if they meet their production targets. Table 2.1 shows some production data for FF's two work teams. Table 2.1: Worker data for FF Team A Team B Number of workers 100 50 Productivity (per worker per day) 300 meals 240 meals The Board of Directors of FF is considering changing the manufacturing process to flow production. This would require purchasing Computer Aided Manufacturing (CAM) equipment and using a capital intensive production process. Production targets would no longer be used for employees because the machinery would be set at a specific production rate. Sabrina, the Operations Director, has put forward the following advantages for moving to flow production: • more products made each hour • lower employment costs • improved quality. Ben, the Human Resource Director, is worried about the change from a labour intensive process to a capital intensive process.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. [2] A correct definition
2. [1] A partial, vague or unfocused definition
3. [0] No creditable content
4. Businesses that manufacture raw materials (or assemble components) into finished goods
5. [1] Example or some other way of showing good understanding
6. [1] Understanding of segmentation
7. [1] Understanding of a market
8. Dividing the total population that might demand a product or service into smaller sections where people share certain characteristics. For example, a soft drinks manufacturer might segment their market by age groups.
9. [2] Correct answer with or without correct working
10. [1] Correct calculation of total day shift meals or total night shift meals
11. [0] No creditable content
12. Answer = 42 000 meals
13. 1000 workers X 30 meals = 30 000 meals (day)
14. 500 workers X 24 meals = 12000 meals (night)
15. FF may have reduced revenue from having less meals to sell to airlines.
16. FF may have higher costs than the competition – very competitive market.
17. FF may not be able to afford the capital for mass production.
18. Low productivity may make the decision to move to mass production more appealing.
19. May lead to dismissing some of the 500 night-shift workers.
20. May lead to tougher targets for the workers.
21. Risk of running out of stock
22. More planning needed
23. Must have good relationship with supplier
24. No backup inventory in case of a supply chain problem
25. Poor quality products may lead to major disruption
26. No spare finished stock just in case
27. Staff morale is the job satisfaction, outlook, and feelings of well-being an employee has within a workplace setting.
28. Staff welfare is about keeping workers healthy and safe.
29. Some workers may be made redundant – this is likely to affect the morale of the workers still employed by FF.
30. A move to capital intensive may lead to a less satisfying job for the employees of FF – less variety of meals, etc.
31. Employees may lose the 5 minute changeover time – may have H&S implications - working longer hours, more intensive etc.
32. Employees may see that there is even less job security (already low with 6-month contracts).
33. The loss of production targets may improve staff morale because there is less pressure to produce.
34. The speed of production will be set by the machinery which may put workers under undue pressure, or to produce at an unrealistic rate.