16 Identify and explain two possible advantages to SENG of using lean production. [4]

[BASEL Moderator]

SENG manufactures cameras. Last year its market share increased by 2% to 18%. Production is capital intensive. This allows SENG to use lean production methods such as just-in-time. Cameras have a short product life cycle. SENG spends $200m each year on extension strategies. The Marketing manager thinks that an increase in market share will lead to higher profits.

16 Identify and explain two possible advantages to SENG of using lean production. [4]

Possible KN Points:
• Saves storage costs
• Reduces the risk of obsolete stock
• Saves space
• Lower rent as less space needed
• Reduction in waste
• cutting out some processes
• Better use of equipment