Mini-Lesson
Operations management
This mini-lesson covers Cambridge Section 4 — Operations management : production of goods and services , methods of production, costs, scale and break-even , and achieving quality .
production methods costs & break-even quality
how a business produces goods and services efficiently
Work through each screen, answer the questions as you go (some are wordy, some are calculations) and collect ⭐ stars. Press Start when you're ready.
4.1 Production
Production of goods & services
Production turns inputs into outputs (goods or services). Key ideas:
Productivity = output ÷ number of workers. Higher productivity lowers unit costs.Efficiency — using resources with least waste.Lean production & JIT — cutting waste and stock.
Methods: job (one-off), batch (groups), flow (continuous line).
Quick check
Which production method?
? A bakery makes 200 identical loaves, then switches the ovens to make 200 identical rolls. Which production method is this?
Batch production ✅
Job production ❌
Flow production only ❌
One-off production ❌
Calculate
Your turn — productivity
1 A team of 5 workers makes 2,000 units a week. Calculate labour productivity (output per worker).
units
Check ✓
Hint: labour productivity = output ÷ workers = 2,000 ÷ 5.
4.2 Costs & scale
Costs, scale & break-even
Cambridge distinguishes cost types and uses break-even:
Fixed costs stay the same as output changes (rent).Variable costs change with output (materials per unit).Economies of scale lower average cost per unit as a firm grows.
total costs = fixed costs + variable costs
break-even (units) = fixed costs ÷ (price − variable cost per unit)
Calculate
Your turn — total costs
2 A firm has fixed costs of $5,000 and variable costs of $3 per unit. It makes 2,000 units. Calculate total costs.
$
Check ✓
Hint: total costs = fixed + (variable × units) = 5,000 + (3 × 2,000).
Calculate
Your turn — break-even
3 A product sells for $18 , has a variable cost of $8 per unit, and fixed costs are $6,000 . Calculate the break-even output.
units
Check ✓
Hint: break-even = fixed costs ÷ (price − variable cost) = 6,000 ÷ (18 − 8).
Sort it
Fixed cost, variable cost, or a quality method?
Tap an item, then the group it belongs to.
4.3 Quality
Achieving quality production
Customers expect a consistent standard:
Quality control — inspecting the finished product to catch faults.Quality assurance — building quality in at every stage to prevent faults.Total quality management (TQM) — everyone is responsible for quality.
Why it matters: good quality reduces waste and returns, protects reputation and can justify a higher price.
Match it
Match the term to its meaning
Tap a statement on the left, then the correct term on the right.
Calculate
Your turn — contribution per unit
4 A product sells for $18 and its variable cost is $8 per unit. Calculate the contribution per unit.
$
Check ✓
Hint: contribution per unit = price − variable cost per unit = 18 − 8.
Calculate
Your turn — average cost
5 Total costs are $12,000 to make 3,000 units. Calculate the average cost per unit.
$
Check ✓
Hint: average cost = total costs ÷ number of units = 12,000 ÷ 3,000.
Quick check
Control or assurance?
? A firm trains every worker to check their own work at each stage so faults never reach the end of the line. Which approach is this?
Quality assurance ✅
Quality control by final inspection only ❌
Ignoring quality ❌
Job production ❌
Quick check
Economies of scale
? As a factory grows and buys materials in bulk, its average cost per unit falls. What is this an example of?
Economies of scale ✅
Diseconomies of scale ❌
A cash-flow crisis ❌
Unlimited liability ❌
Recap
The big ideas to know
Production: job/batch/flow; productivity = output ÷ workers; lean production & JIT
Costs: total costs = fixed + variable; economies of scale lower average cost
Break-even (units) = fixed costs ÷ (price − variable cost); contribution = price − variable cost
Average cost = total costs ÷ number of units
Quality: control (inspect) vs assurance (build in) vs TQM (everyone responsible)
You've covered Cambridge Section 4 — Operations management. Press Finish to see your score.
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