This maybe used when demand for a firm’s product or service is more regular than a one off.  An example might be furniture where a batch of armchairs is made to a particular design.  Production is divided into a number of operations.  A particular operation is carried out on all of the products in one batch.  The batch then moves onto the next operation.

Cadbury’s use   batch production when making dairy milk bars.  Below, list the operations involved in the production of a batch of dairy milk bars.

These operations will be performed on every batch of choclate.  There is some standardisation, because each bar in the batch will be the same.  However it may be possible to vary each batch.  Fruit and or nuts could be added, or different size/ shaped bars could be made.

A great number of products are made using this method, particularly in the manufacture of components and foodstuffs.  Goods can be produced in either small or large batches depending upon the level of demand.  Obviously the larger the batch, the lower the average cost will be due to the existence of economies of scale.

Further Reading

Food producers play safe with nuts