business flashcards

Question 1

what are the social factors that affect a business

Answer 1

consumer beliefs, fashion trends, changes in lifestyle.

Question 2

what is added value

Answer 2

the difference between the cost of making the product and the price that you are selling it at.

Question 3

advantages of added value

Answer 3

enables you to make a profit, can charge a higher price, higher price will give a better perception of the quality of your product/service.

Question 4

disadvantages of added value

Answer 4

an increase in the price may reduce sales

Question 5

what are the advantages of added value for the stakeholders.

Answer 5

the stakeholders get a unique product, shareholders benefit from an increase in profit because they then get greater dividends

Question 6

what is capacity utilisation

Answer 6

capacity utilisation is all about using scarce resources that the business has in the most efficient way.

Question 7

what is the formula for calculating capacity

Answer 7

actual or current level of output/ maximum capacity possible x 100

Question 8

why do businesses use operations management

Answer 8

because it gives the business a sense of direction and can be used to motivate employees and so the operation can remain under control.