LunaStone Ceramics (LSC) is a small manufacturer of premium ceramic tableware. It currently uses job production: each restaurant client chooses the shape, glaze and logo placement for plates and bowls. LSC’s skilled employees enjoy the creative work, and customers pay high prices for unique designs. However, production is slow and delivery times are increasing.

A national hotel chain has offered LSC a two-year contract to supply a standard range of plates for 40 hotels. The chain wants consistent quality, faster delivery and a lower price per unit. LSC’s operations manager proposes changing part of the factory to batch production, using standard moulds and producing each colour range in separate batches. Some employees are concerned that this will reduce creativity and make the business less differentiated.

Harbour Stitch (HS) is a small manufacturer of premium laptop bags made from recycled sailcloth. HS currently uses job production: each customer chooses the bag size, lining and strap style, and one craft worker makes the whole bag. HS has strong online reviews for quality and uniqueness, but some customers complain about slow delivery.

A chain of university bookstores has offered HS a monthly contract for a standard laptop bag in two colours. To supply the contract, HS would change part of its operations from job production to batch production. The operations manager has prepared the following forecast data.

For this question, treat the two columns as alternative total monthly operating scenarios. The proposed figure of 360 bags is HS's total proposed monthly output and sales, not an additional 360 bags alongside the current 180 bags. The proposed figures use batch-production costs; no separate volume or costs are provided for any job-production activity retained alongside this scenario. The profit calculations should be treated as estimated operating profit before any refund, replacement, repair or disposal costs resulting from returned bags, because these costs are not provided.

The owner of HS is concerned that accepting the contract may damage the brand's image as a producer of unique handmade bags.

UrbanSprout (US) produces indoor herb-growing kits for apartment owners. US currently uses batch production to make three kit varieties: basil, mint and chilli. Demand is seasonal and retailers sometimes return unsold kits. A national supermarket has offered US shelf space if it can supply one standardized “starter kit” at a lower price throughout the year.

US is considering replacing most batch production with a mass/flow production line for the starter kit. The marketing director believes lower prices will increase sales, but the operations manager is worried about the loss of variety and the high fixed and initial installation costs.

For this question, treat the stated monthly sales figures as the units sold and assume that the variable costs apply to these units. Use these figures for operating-profit calculations. Treat the unsold percentages as separate indicators of waste or returns and do not use them to adjust the stated sales volumes or variable costs. The one-off installation cost of the proposed line, financing details and contract duration are not provided; consider how this missing information affects the decision.

FreshFork Foods (FFF) produces chilled vegetarian ready meals for independent grocery stores. It currently uses batch production. Each morning, FFF makes one batch of spinach lasagne, then cleans and resets the equipment before producing lentil curry and vegetable noodles. This allows FFF to offer variety, but changeovers are time-consuming and some batches are left unsold at the end of the week.

A large supermarket group has offered FFF shelf space for one product, vegetable noodles, in 120 stores. The supermarket requires high and consistent weekly output. FFF’s finance director wants to invest in a flow production line for vegetable noodles only. The sustainability manager is worried that flow production could lead to overproduction and increased food waste if demand forecasts are inaccurate.

ModuHome Ltd (MHL) makes modular shelving units for apartments. It currently uses batch production to produce shelves in three standard sizes and four colours. MHL sells through furniture retailers, but online competitors are gaining market share by allowing customers to personalize furniture.

MHL’s marketing director proposes mass customization through a new website. Customers would choose a standard shelf size, colour, handle style and optional engraved nameplate. The basic components would still be produced in batches, but final assembly and engraving would take place only after an online order is received. The operations director argues that MHL should instead move toward mass/flow production of one low-cost standard shelving unit for retailers, because many customers still mainly want cheap and fast furniture.

QuietCube (QC) manufactures soundproof meeting pods for offices and schools. QC currently uses job production because each pod is designed to fit a customer’s room. Demand has increased as more organizations adopt hybrid working, but QC’s delivery times are long and skilled carpenters are difficult to recruit.

QC is considering changing to mass customization. Under this method, QC would use standardized modular panels produced in advance, while customers could still choose selected features such as size, colour, door position and acoustic finish. The change would require investment in computer-controlled cutting equipment and an online ordering system.

The finance director has prepared the following monthly forecast data.

QC’s operations director argues that mass customization is a creative production process that could disrupt the market. The human resources manager is concerned that some skilled carpenters may leave if their work becomes less varied.

UpTurn Furnishings (UF) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

UF restores unwanted office furniture and sells it at low prices to community centres and low-income families. It is a social enterprise: any surplus is reinvested into training formerly unemployed people in carpentry, upholstery and safe use of tools. UF currently uses job production because each donated item is different and customers often ask for one-off sizes or finishes. A local government grant is available if UF can increase output and reduce waiting times within 18 months.

Resource 2 — Selected operations information

Resource 3 — Social-media statistic

A video showing UF turning a damaged cabinet into a low-cost study desk received 41 000 views in two weeks. In an online poll, 62% of respondents said they would buy a simple standard desk if the price was lower, but many comments praised UF for producing “something unique from waste”.

Resource 4 — Quotation from UF’s founder

“We must not become a normal furniture factory. The method we choose has to train people well, keep furniture out of landfill and still make products families can afford.”

Harvest Kitchen Hub (HKH) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

HKH collects surplus vegetables from farms and supermarkets and turns them into low-cost frozen meals for older people and families on low incomes. HKH also provides paid kitchen work and language support for refugees. It currently uses batch production in a rented community kitchen, producing different recipes on different days. A hospital group has offered HKH a three-year contract to supply standard vegetable meals if HKH can deliver much larger and more consistent volumes.

Resource 2 — Selected operations and finance information

Resource 3 — Social-media statistic

HKH’s “meals from food that would be wasted” campaign was shared 8 600 times. A waiting list of 1 300 households has developed, but comments show that some customers value culturally familiar recipe choices.

Resource 4 — Quotation from the hospital procurement manager

“We need safe, reliable, standardized meals at a predictable price. We cannot redesign the menu every week.”

AccessPack Alliance (APA) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

APA designs school backpacks for children with mobility, sensory and medical needs. It operates as a social enterprise: profits fund free fitting sessions and donations to special-needs schools. APA currently uses job production, with each backpack designed after a meeting with a family and an occupational therapist. Demand has increased after national media coverage. APA is considering mass customization using a standard backpack base with selectable strap positions, pocket modules, fabric textures and medical-device attachments ordered through an online system.

Resource 2 — Selected operations information

Resource 3 — Social-media statistic

A parent’s video about an APA backpack being fitted around a feeding tube reached 1.2 million views. In an online survey, 74% of parents wanted to choose strap and pocket positions, but only 18% said their child required a fully one-off design.

Resource 4 — Quotation from an occupational therapist

“Choice is important, but an incorrect fit can exclude a child from school activities. APA must not trade expert fitting for speed alone.”