01 Identify two disadvantages to Ruby of using job production. [2]

[BASEL Moderator]

Ruby is a sole trader. She produces handmade, individually designed greetings cards using job production. High quality cards are important to Ruby’s customers. Ruby has 3 part-time employees who are paid an hourly wage rate. Ruby is thinking of changing from an hourly wage rate to a piece rate system, where the employees are paid depending on the quantity of products they make. Ruby thinks this will help to improve the motivation of her workforce. During festivals and celebrations she receives a higher number of orders.

01 Identify two disadvantages to Ruby of using job production. [2]

Possible KN Points:
• Skilled labour costs more
• Costs are higher as it is often labour intensive
• Lower output OR production can take longer
• No economies of scale (likely)
• Products are made to order so mistakes can be expensive to correct