Earnshaw is a company that buys raw materials and components in bulk. It uses them to manufacture furniture using flow production methods. Productivity in the factory is high. Currently Earnshaw has high costs of holding stock. The Managing Director wants to introduce lean production methods.

1. (a)What is meant by 'productivity'?[2]
2. (b)Identify two advantages to Earnshaw of buying raw materials in bulk.[2]
3. (c)Identify and explain two features of flow production.[4]
4. (d)Identify and explain three benefits to Earnshaw of using lean production methods.[6]
5. (e)'If Earnshaw is to grow in the future then its unit production costs must fall'. Do you agree? Justify your answer.[6]