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buisness flashcards (Y9, Y10, Y11) > Buisness unit 4.1, 4.2, 4.3, 4.4 > Flashcards

Buisness unit 4.1, 4.2, 4.3, 4.4 Flashcards

1
Q

what are fixed costs?

A

the costs that do not change with the number of items sold or produced e.g rent, management salaries, loans, morgage

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2
Q

what are variable costs?

A

the costs that do change with the number of items sold or produced e.g raw material costs, piece rate labour

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3
Q

how do you calculate total costs?

A

total variable cots + total fixed costs

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4
Q

how do you calculate average cost?

A

total costs of production/total output

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5
Q

how do you calculate total revenue?

A

price x quantity sold

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6
Q

how do you calculate profit?

A

total revenue - total costs

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7
Q

what is the breakeven level of output ?

A

the quantity of goods that must be produced/sold for total revenue to equal total costs

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8
Q

what is the breakeven formula?

A

fixed costs/contribution per unit
(contribution = selling price - variable cost per unit)

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9
Q

what is the formula for contribution?

A

selling price - variable cost per unit

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9
Q

what is the margin of safety?

A

the amount by which current sales exceed the breakeven point

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10
Q

what is the formula of margin of safety?

A

current sales - breakeven point
(BEP = fixed costs/contribution per unit)

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11
Q

what are the drawbacks of breakeven?

A
  • breakeven calculations may be inaccurate if the selling price changes over time
  • assumes the fixed costs never change with output, eventually they will increase if the business has to move to a bigger factory as rent costs will increase
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11
Q

what are the benefits of breakeven? (3)

A
  • managers can read off the graph how much profit/loss the business has made at any level of output
  • allows the business to see the impact on the breakeven point if the business decides to increase the selling price/decrease variable costs
  • allows business to see the margin of safety to determine if they are at high/low risk of making a loss
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12
Q

what is lean production?

A

techniques used to cut down on a waste of resources leads to increase efficiency

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13
Q

how to achieve lean production? (2)

A
  • just in time stock control (onlt get recources when needed from suppliers)
  • kaizen
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14
Q

what is just in time stock control? (lean production)

A

only reciving resources from suppliers when they are needed –> reduces the amount of stock and storage costs

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14
Q

whats kaizen? (lean production)

A

small groups of workers meet together regularly to discuss problems of excess waste and solutions to reduce it

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14
Q

what are the benefits of lean production? (3)

A
  • less storage costs of inventory
  • less money tied up in inventory
  • quicker production of goods and services
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15
Q

whats production?

A

the total output of a buisness in a given period of time

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16
Q

whats productivity?

A

output measured against the input used to create it

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17
Q

how do you calculate productivity?

A

output/quantity of input

18
Q

what does efficiency lead to for your business?

A

lower average costs which means businesses can decrease their process to be more competitive or make more profit per unit

19
Q

how can a buisness increase efficiency? (3)

A
  • replace employees with more machinery —> producing more goods per hour
  • motivate employees to be more efficient
  • train employees so that they have more skills to become more efficient
20
Q

what are the methods of production? (3)

A
  • job production
  • batch production
  • flow production
21
Q

what is job production?

A

where a single unique product is made at a time

22
Q

what are the benefits and drawbacks of job production? (2,2)

A

benefits =
- unique selling point so they can charge a higher price
- workers are doing varied tasks so they are not bored, increasing motivation
drawbacks =
- skilled labour is often used so higher costs need to be paid to skilled labour
- time consuming so lower productivity and efficiency

23
Q

what is batch production?

A

where large quantities of a product are produced, then a quantity of another slightly different item will be made,

24
Q

what are the benefits and drawbacks of batch production? 2,2

A

benefits =
- production can be easily changed leading to more choices for consumers
- offers some variety to workers compared to flow production
drawbacks =
- machines have to be reset between production batches, causing a delay and a reduction in efficiency
- machinery breakdowns will cause a decrease in efficiency

24
Q

what is flow production?

A

where a large quantity of products are produced in a continuous process

25
Q

what are the benefits and drawbacks of flow production? 3,3

A

benefits =
- high output of a standard product –> higher levels of sales
- it is capital intensive which increases efficiency causing average unit costs to be lower
- as they produce a large amount of products they will be able to benefit from E.O.S
drawbacks =
- very boring system for workers –> demotivating
- as producing large amounts of products, will need a large storage space for inventory –> high storage costs
- if one machine breaks will stop whole prices –> decreasing efficiency and output

26
Q

how technology has changed production methods and productivity –> (turn around) (7)

A
  • automation
  • computer aided design (CAD)
  • computer aided manufacture (CAM)
  • computer integrated manufacturing (CIM)
  • electronic point of sale (EPOS)
  • electronic funds transfer at point of sale (EFTPOS)
  • contactless payment
27
Q

what is automation?

A

using more machinery can increase efficiency

28
Q

what is computer aided design? (CAD)

A

allows you to design products online, decreasing the costs of designing and making it physically initially

29
Q

what is computer aided manufacture (CAM)?

A

computers monitor the automated production process and robots in the factory increasing efficiency and reducing the risk of mistakes

30
Q

what is computer integrated manufacturing (CIM)?

A

CAD and CAM integrated

31
Q

what is an electronic point of sale (EPOS)?

A

allows sales assistants to scan barcodes, increasing efficiency at checkouts and so shorter ques for customers

32
Q

what is electronic funds transfer at point of sale (EFTPOS)?

A

paying by card increases efficiency at checkouts at sales and so shorter ques for customers

33
Q

what is contactless payment?

A

increases efficiency at checkout at sales and so shorter ques for customers

34
Q

what is the definition of quality?

A

tp produce a good or service which meets customer services

35
Q

why is quality important? (5)

A
  1. strong brand image
  2. helps bring customer loyalty
  3. maintains a good reputation
  4. increase in sales
  5. gives competitors advantages
36
Q

what is quality control?

A

the checking for quality at the end of the production process. doee by quality inspectors

37
Q

what are the benefits and drawbacks of quality control? (2,2)

A

benefits =
- tries to eliminate faults before the customer receives the product
- less training is required for the workers as inspectors are employed to check quality
drawbacks =
- identifies faulty products at the end but doesn’t find out the problem and so cant solve the problem
- as quality is checked at the end, the product may have to be scrapped if it now faults, causing higher costs

38
Q

what are the benefits and drawbacks of quality assurance? 2,2

A

benefits =
- tries to eliminate faults or errors at all stages of production so save costs
- lower customer complaints
drawbacks =
- expensive to train all employees to check the quality of their own work at each production stage
- relies on all employees to be committed to checking quality. if one doesn’t it will impact overall quality

38
Q

what are the benefits and drawbacks of total quality management? 2,2

A

benefits =
- it aims for zero faults and so this increases customer satisfaction
- production costs should be lower as there is less wastage from faulty products
drawbacks =
- it is expensive to train al epmaolyees to check the product or service
- relies on all employees to be committed to checking quality. if one doesn’t, it will impact overall quality

39
Q

what is quality assurance?

A

checking the standard throughout and at all stages of the production process by all employees

40
Q

what is total quality management?

A

the continuous improvement of products and processes by focusing on quality at every stage of production (aim is zero faults)

40
Q

what are the factors influencing the location of a manufacturing business? 5

A
  • proximity to customers, reduce transportation costs
  • proximity to suppliers/raw materials, reduce transport costs
  • government influence, government grants or fewer laws
  • availability of skilled labour and the wage rate of the labour
  • being close to transport to reduce transportation costs
41
Q

what are the factors influencing the location of a service business (retail) 5

A
  • proximity to customers (be in the centre to attract customers)
  • availability of labour
  • cost of rent
  • available parking for nearby customers
  • if there are competitors nearby
42
Q

what are the factors to condider when deciding which country to operate in? 5

A
  • new markets overseas
  • wage rates in that country and availability of skilled labour
  • rent and corporation taxes in that country
  • availability of government grants
  • tariffs and quotas
43
Q

what are the roles of legal controls of location decisions? 2

A
  • grants to encourage firms to locate in a certain area
  • planning permission regulations

buisness flashcards (Y9, Y10, Y11) (6 decks)

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