Production facilities: location, capacity and inventory

Before you read

Key terms

1. Choose the Russian equivalents from the right-hand column for the following English terms and word expressions.

1) production capacity	a) достаточная мощность
2) insufficient capacity	b) полная мощность
3) sufficient capacity	c) запасная (резервная) мощность
4) under-employed capacity	d) производственная мощность
5) excess capacity/overcapacity	e) неиспользованная мощность
6) spare capacity	f) избыточная производственная мощность/излишек производственных мощностей
7) full capacity	g) недостаточная, неполная мощность

2. Match up the words on the left with the definitions on the right.

1) components	a) a shop or a store which sells to the final customer or end-user
2) subcontractor	b) the financial advantages that a company gains when it produces large quantities of products
3) utilities	c) the rate of output that can be achieved from a production process
4) retailer	d) insufficient supply to meet demand
5) wholesaler	e) the pieces or parts that make up a manufactured product
6) capacity	f) keeping things for use in the future
7) delivery	g) services supplied to houses, factories and public buildings, such as electricity, gas, water and sewage, and telephone lines
8) demand	h) a company providing goods or services for another organisation
9) shortage	i) provision of the customer with something that has been ordered
10) discount	j) a business’s stock of raw materials, component parts, supplies, work in process, or finished products
11) storage	k) an intermediary between producers and retailers, who stocks goods, and delivers them
12) inventory	l) price reduction
13) lead time	m) the amount of a commodity that consumers are willing and able to purchase at a specified price
14) economies of scale	n) the time between the original design or idea for a particular product and its actual production.

Think ahead

1. Imagine that you are starting up a new business and you need to construct a new plant. Think of the problems you may encounter.

2. An expanding engineering firm needs to move to a new site. What factors should be considered in the choice of location?

3. “No company executive should expect to be employed in one location all of his/her working life”. Do you agree? Give your reasons.

4. How can location influence a company’s profitability?

Text 2.3 Skim the text and check whether your assumptions were correct. Then scan the text and do the tasks given in the comprehension section.