1.5.5 Business Choices

Question 1

Opportunity costs

Answer 1

Is the cost of missing out on the next business alternative

Question 2

Opportunity costs can be both….

Answer 2

Monetary and non monetary

Question 3

To make a choice, businesses must consider

Answer 3

Risk vs reward, potential sales from each idea, competitive landscape, timings

Question 4

2 types of opportunity costs

Answer 4

Personal opportunity costs, opportunity costs of developing business ideas

Question 5

Trade off

Answer 5

Arises when more of one thing results of having less of another

Question 6

Examples of trade offs in businesses

Answer 6

• less market research - less successful product launch
• higher quality standards - more quality control and assurance costs
• higher advertising online - reduced on tv
• choose lower risk investment - gain lower rewards

Question 7

Example objectives of marketing department

Answer 7

Have a dedicated, well trained and highly motivated sales team and achieve or succeed their monthly or weekly sales targets

Question 8

Example objectives of production department

Answer 8

Sustain efficiency by having the most up to date machinery and have a highly motivated production team

Question 9

Example objectives of human resource department

Answer 9

Employ the right people for the jobs available and foster and maintain food industrial relations

Question 10

Example objectives of finance department

Answer 10

Maintain a positive cash flow for the business and manage a businesses finances efficiently

Question 11

Positive consequences of investing in a marketing department

Answer 11

Increased team size, increased motivation, possible sales increase, improved training

Question 12

Negative consequences of investing marketing department

Answer 12

Demotivation of other departments, less efficient production, poorer human resource management, possible cash flow problems

Question 13

Positive consequences of products department

Answer 13

Additional workers, new machinery, increased motivation and output

Question 14

Negative consequences of investing in production department

Answer 14

Demotivation of other departments, possible loss of sales, poorer human resource management, cash flow problems

Question 15

Positive consequences of investing in Human Resources department

Answer 15

Better staff management, increased motivation, additional workers, better selection procedure

Question 16

Negative consequences of investing in human resource department

Answer 16

Demotivation of other departments, fewer new sales, poorer financial management, less efficient production

Question 17

Positive Consequences of investing in finance department

Answer 17

Additional workers, equipment upgrade, increased motivation, better cash flow management

Question 18

Negative consequences of investing in a finance department

Answer 18

Demotivation of other departments, poorer sales, ineffective selection process, inefficient production