Final answer:
Group technology is used in manufacturing to group similar parts, allowing for a reduction in setup time and cost, especially in JIT production systems. It involves selecting production technologies that offer the lowest total cost, and the decision may vary between more machines and less labor or vice versa depending on machine costs.
Step-by-step explanation:
Group technology is a manufacturing practice where similar parts are grouped together to take advantage of their similarities in design and production. This approach is often used in Just-In-Time (JIT) production systems to reduce setup time and cost. By organizing the production floor into cells that handle groups of similar products or components, companies can more quickly switch between tasks without extensive downtime or reconfiguration, thus optimizing the flow of goods and reducing waste.
When a company is considering a JIT conversion, utilizing group technology becomes advantageous. For instance, if a firm is choosing between different production technologies, it should opt for the one that has the lowest total cost. In scenarios where machine hours become cheaper, there often is a shift towards using more machines and less labor, known as capital-intensive production. Conversely, if the cost of machines rises, firms would likely shift towards using less capital and more labor, which is known as labor-intensive production.