a293 Flashcards

1
Q

define productivity

A

the quantity of products a business can produce in a given amount of time using its existing resources

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2
Q

define efficiency

A

a measurement of how effective a business is at producing a good in terms of time quality and waste

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3
Q

define mechanisation

A

when machinery is used in a business but labour is still required to work the machines e.g. combine harvester

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4
Q

define automation

A

when machinery is used and a computer controls it. Workers programme and supervise the work that machines do

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5
Q

what does CAD stand for and what does it mean

A

computer aided design- using a computer to design products

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6
Q

what does CAM stand for and what does it mean

A

computer automated manufacture- the machines used to make a product are controlled by a computer

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7
Q

what does CIM stand for and what does it mean

A

computer integrated manufacture- every aspect of production including finance and stock control is controlled by a computer

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8
Q

advantages of technology in business:

products

A

-large amounts can be made which can lead to economies of large scale production

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9
Q

what happens to the productivity of workers when there is technology in business - advantage

A

it improves and the output per each worker increases and so labour costs fall for each product

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10
Q

why can quality of production be improved with machines - advantage

A

because machines are less likely to make mistakes which may attract new customers

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11
Q

how can technology make production flexible- advantage

A

machines can be programmed to produce a variety of products

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12
Q

why are machines safe for humans- advantage

A

because they can do repetitive or dangerous jobs

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13
Q

give a very big disadvantage for having technology in business

A

it is very expensive to buy and install machines

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14
Q

why is have technology a DISADVANTAGE for workers and the business

A
  • workers may need training in order to learn how to work with the machines which is bad for the business as this can cost a lot of money
  • the business may have to recruit skilled workers
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15
Q

having technology in business can make some workers …..

disadvantage

A

redundant

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16
Q

why is having technology good for the long run

A

becuause it may increase the sales of the business sand it will be cheap to produce each product

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17
Q

why is technology bad for the short run

A

it is very expensive

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18
Q

define: quality product

A

a product or service that meets customer’s expectations and is therefore ‘fit for purpose’

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19
Q

define: quality standards

A

the expectations of customer expressed in terms of the minimum acceptable production or service standards

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20
Q

why is checking quality important

A
  • customers may not want buy ‘poor’ quality products
  • customer may buy from another producer
  • gives business a bad reputation
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21
Q

if a product is bad quality why is this bad for production

A

because it may disrupt production and may stop the whole thing as the business cannot let any problems happen to the other products

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22
Q

give 3 methods of quality control

A
  • traditional quality control- quality control vs quality assurance
  • total quality management (tqm)
  • kaizen- continuous improvement
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23
Q

define quality control

A

a system of checking the quality of finished goods

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24
Q

what does quality control check

A

completed goods for faults, Quality inspectors measure or test every product, samples from each batch, or random samples.

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25
what is the aim of quality control
to ensure the business is achieving
26
What happens to BreakEven if costs increase
Their breakeven goes up so you would have to sell more
27
What happens to BreakEven if costs go down
Breakeven goes down so you would have to sell less to cover costs
28
If price goes up what happens to breakeven
Breakeven goes down
29
If price goes DOWN what happens to Breakeven
It goes up so you would have to sell more
30
Why do businesses use breakeven (3)
- helps to workout forecast sales and work out how to make enough profit - may help to get a loan from the bank - make judgements about prices and costs
31
What are the limitations of breakeven (2)
- forecast figures could be different in reality | - number of competitors may change- so business may have to change price
32
Limitations of breakeven: why might the firm reduce prices
To sell at high levels of output and to actually sell something
33
Limitations it breakeven: as firm gets bigger ...
As the firm gets bigger they may beed to buy more machines, get bigger premises or take on extra staff
34
Limitations of breakeven: products
Some products may need to be sold at different prices and BE only works for one product
35
What happens if a business is selling more than their breakeven level of sales
It is making a profit
36
If a business is selling less than their breakeven level of sales what do they make
A loss
37
Give 3 advantages of small scale production
- you can offer a personal service (coffee shop) - specialised products made - can charge lots of money
38
Give 2 advantages of large scale production
- average costs of producing goods will be lower than firms who produce on a small scale - business will be able to sell goods at a lower price and make a higher profit margin on each product sold
39
What is economies of scale
The advantages of producing large quantities of output. These advantages should reduce unit cost
40
What is breakeven
A business will breakeven when it sells enough products so that its total sales revenue is equal to its total costs (the business is not making a profit or a loss)
41
What is TECHNICAL economies of scale
When a business saves on production costs by using better methods and equipment
42
What is MANAGERIAL economies of scale
When a business employs specialist managers who improve efficiency
43
What is FINANCIAL economies of scale
When a business does not have to pay out as much money to raise finance e.g. lower interest payments therefore lower costs
44
What is RISK-BREAKING economies of scale
When a business has a range of products or services, so it is not dependant on one product
45
What is PURCHASING economies of scale
When a business is given a discount for buying large quantities (bulk buying) therefore lower costs and higher profit margins
46
What is MARKETING economies of scale
When a business saves on advertising and transport costs
47
What is diseconomies of scale
When a business becomes too big and average costs start to rise
48
2 reasons why diseconomies of scale occurs
- management and control problems- decisions take a long time - workers may lack motivation- workers may feel left out or not worthy enough (industrial relations problems)
49
Why is it important to calculate average cost
- helps to decide what price to charge | - to make a profit- price must be more than average cost
50
Lower costs =
Higher profits
51
Lower costs means profit can br lowered =
More sales, still make a profit and take customers away from rivals
52
How to reduce average costs (3)
- reduce variable costs per unit e.g find cheaper materials but i must not affect quality - increase efficiency of labour- more jobs per hour - achieve economies of large scale production
53
What are variable costs (2)
- money spent on items that are directly linked to the number of items made and sold - variable costs DO change with output
54
What is variable cost per unit
The variable cost of making one product
55
Give 3 examples of variable costs
- raw materials - parts and components - stock and ingredients
56
What are foxed costs
- money spent on items that are needed no matter how many goods or services - foxed costs DO NOT change with output
57
Give 4 examples of fixed costs
- rent - insurance - bills - salaries
58
Give the 3 main methods of increasing sales revenue
- increase selling price - decrease selling price to increase quantity sold - increase quantity sold without changing the price(more advertising)
59
What is PEICE ELASTIC
A change in price which results in a greater change in demand (lose lots of customers)
60
What is PRICE INELASTIC
A change in price which results in a smaller change in demand (less customers lost or none at all)
61
What does lowering or raising prices depend on (3)
- number of competitors - is the product a luxury or a necessity - how much people spend on the product out of their income
62
JIT-what can be done to avoid problems with the supply of stock (4)
- hold a small buffer stock - locate close to suppliers - computerised order systems - thoroughly check suppliers for reliability before working with them
63
3 benefits if JIT
- costs are reduced- no warehouse - stock does not go out of date - stock should not run out
64
3 problems of JIT
- huge reliance on suppliers you need excellent coordination between business and suppliers - stock control must be excellent - if delivery of stocks are delayed production will stop