2.4.1 (C) Efficiency Flashcards
1
Q
Define efficiency
A
Making the best use of resources within a business
2
Q
How do you calculate unit costs
A
Total costs
——————
Total output
3
Q
What are some benefits of improved efficiency
A
- labour productivity increases
- unit costs fall
- resources can be reallocated
- profit margins increase
- ability to charge lower prices
4
Q
What is waste
A
Anything that doesn’t add value to the product
5
Q
What are the 7 wastes a business is able to reduce on
A
- Transport
- inventory
- defects
- waiting
- over processing
- over production
- unnecessary movement of people
