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business/ geo <3 > business keyword paper 2 > Flashcards

business keyword paper 2 Flashcards

1
Q

(total) fixed costs

A

sum of all the fixed costs

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2
Q

(total) sales revenue

A

price x quantity

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3
Q

(total) variable costs

A

variable costs per unit x quantity

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4
Q

advantage and disadvantage of batch production

A

-can be mechanised= less labour
-workers less motivated with repetitive work

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5
Q

advantage and disadvantage of e-commerce

A

-access to global market
-designing and updating websites = expensive

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6
Q

advantage and disadvantage of face to face selling

A

-seller can persuade customers to buy more
-expensive

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7
Q

advantage and disadvantage of flow production

A

-produce larger quantities = bulk buy raw materials = lower costs
-high costs = machinery = can break down

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8
Q

advantage and disadvantage of job production

A

-motivated workers
-skilled labour and craftsmen are expensive

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9
Q

advantage and disadvantage of quality assurance

A

-costs reduced = less waste
-time consuming

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10
Q

advantage and disadvantage of quality control

A

-customer will not receive a substandard product
-wasteful = costs high

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11
Q

advantage and disadvantage of telesales

A

-seller can answer questions instantly
-cold-calling

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12
Q

advantages of technology on production

A

-work 24/7= do not need breaks
-increase productivity (output per hour)
-safer, more precise

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13
Q

after-sales service

A

advice and help given to customers after they have bought a good

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14
Q

as described

A

means that goods must be as the business described them

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15
Q

automation

A

a production process involving machinery that is controlled by a computer

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16
Q

average fixed costs

A

(total) fixed costs / quantity

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17
Q

average rate of return (ARR) & 3 step equations

A

a method of measuring and comparing the profitability of an investment over the life of the investment
1~calculate total profit from investment=total income from investment - cost of investment
2~calculate average profit from investment = total profit from investment/number of years of investment x 100
3~average profit from investment / cost of investment x 100

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18
Q

batch production

A

process of production where small quantites of products are made over a short period of time and then switched to another product

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19
Q

break-even forecast

A

prediction about the break-even quantity based on estimates of future sales, revenues and costs

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20
Q

break-even point

A

total revenue=total costs
the point where the business makes neither a profit nor a loss

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21
Q

break-even quantity & equation

A

amount a business must sell to earn enough revenue to just cover its costs so that it does not make a profit nor a loss
FC / price - VC (per unit)

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22
Q

cash flow forecast

A

document used to plan for money coming into the business and out of the business. if cash outflow is higher than cash inflow the cash in hand will decrease

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23
Q

closing balance & equation

A

amount of cash left at the end of the month and it becomes the opening balance at the start of the next month
net cash flow + opening balance

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24
Q

consumer laws

A

area of law which protects the customers of a business through the consumer rights act of 2015

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25
Q

crowdfunding

A

Money is donated or invested by sponsors through an appeal to the public

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26
Q

customer engagement

A

contact between the business and the customer

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27
Q

customer service

A

area of business that deals with customer enquiries

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28
Q

e-commerce

A

the selling and buying of products online

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29
Q

expenses

A

the costs of operating a business

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30
Q

expenditure

A

money that the business pays out

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31
Q

face to face selling

A

direct contact between the buyer and seller

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32
Q

factors influencing location

A

-costs of premises
-proximity to market OR competitors
-availability of labour

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33
Q

finance function

A

often found in larger businesses and manages the finance for future planning and decision making

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34
Q

fit for purpose

A

means that goods must do what they are meant to do

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35
Q

fixed costs

A

costs that dont vary with the level of output e.g rent

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36
Q

flow production (mass production)

A

production of one product that takes place continuously using a production line

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37
Q

gross profit & equation

A

-difference between the money received from selling products and the cost of making them
-total revenue - costs of sales

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38
Q

gross profit margin & equation

A

-tells a business how profitable it is
-gross profit / total revenue x 100

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39
Q

job production

A

process of production where products are made for a specific customer

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40
Q

limitations of break-even

A
  • just a prediction
  • doesnt take into accounts discounts
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41
Q

limitations of cash-flow forecasts

A

-prediction = things may change e.g. prices
-data may be based on inaccurate information

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42
Q

liquidity

A

ability of a business to pay its short-term debts which must be paid

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43
Q

loan

A

fixed amount of money given to a business by the bank that has to be repaid over time with interest

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44
Q

location

A

place where a business is sited

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45
Q

logistics

A

management of the transportation and storage of goods

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46
Q

loss

A

when costs are greater than revenue

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47
Q

margin of safety

A

the amount by which a business’ actual output is greater than its break-even output

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48
Q

negative cash flow

A

when during one month more cash is flowing out of the business than flowing in

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49
Q

net cash flow

A

difference between all the cash entering the business and all of the cash leaving the business.
total inflow - total outflow

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50
Q

net profit & equation

A

-money left after deducting all the costs
-total revenue - costs of sales - expenses

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51
Q

net profit margin & equation

A

-proportion of sales revenue once costs are paid
-net profit / total revenue x 100

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52
Q

opening balance

A

amount of cash at the beginning of the month that was the closing balance of the previous month

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53
Q

overdraft

A

an arrangement with a bank that a business can spend more money than it has in its account

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54
Q

owners capital

A

money from savings put into the business by the owner

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55
Q

positive cash flow

A

when during one month more cash is flowing into the business than flowing out

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56
Q

procurement

A

management of purchasing within a business

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57
Q

product knowledge

A

detailed knowledge of a product that staff use to persuade a customer to buy

58
Q

product processes

A

the three methods of production - job, batch and flow

59
Q

profit / loss

A

total revenue - total costs

60
Q

retained profit

A

profit that is not distributed to shareholders as dividends

61
Q

proximity

A

means ‘near to’ - how near it is to something
e.g. proximity to market

62
Q

quality

A

how well the product meets the needs and expectations of the customer

63
Q

quality assurance

A

approach that involves the whole business focusing on quality thus aiming to prevent quality problems arising

64
Q

quality control

A

a system for inspecting the quality of products produced and that they are of good standard

65
Q

recalls

A

when a fault occurs with a product and the business asks for the product to be bought back so it can repaired or replaced

66
Q

retained profits

A

profit that is not distributed to shareholders as dividends

67
Q

returns

A

goods which customers take back to the shop because there are problems with the quality of them

68
Q

sale of assets

A

goods owned by the business that can be sold to raise money

69
Q

satisfactory quality of goods

A

how the goods are made will reflect the price - a high priced good must be of high quality

70
Q

share issue

A

new shares are sold to raise money

71
Q

telesales

A

sales completed over the phone

72
Q

total costs

A

total VC + total FC

73
Q

trade credit

A

when the business has the goods/services to sell and agrees to pay at some time later

74
Q

uses of break-even

A

-plan how much time produce
-plan the price to charge

75
Q

uses of cash-flow forecast

A

-anticipate periods of cash shortages
-provide targets

76
Q

variable costs

A

costs that vary with the level of trade e.g. ingredients for food

77
Q

variable costs (per unit)

A

total variable costs / quantity

78
Q

what does the consumer rights act 2015 include

A

-satisfactory quality = goods shoudlnt be faulty or damaged
-as described = goods must match any description shown to customers
-fit for purpose = unusable

79
Q

role of the finance function

A

-provide financial info to inform future decision making
-make payments
-analyse financial performance

80
Q

why is finance needed

A

-to pay rent
-hire staff
-to expand
-for marketing

81
Q

advantages and disadvantages of a loan

A

-long term and helps with all the costs of setting a business up
-money available immediately
-interest must be paid

82
Q

advantages and disadvantages of overdraft

A

-meet short term cash flow problems
-repayment is only due when the business closes or when it no longer needs it
-flexible
-interest must be paid

83
Q

advantages and disadvantages of trade credit

A

-no interest if repaid with the agreed time limit
-have goods to sell before paying for them
-goods must be paid for even if they dont sell

84
Q

advantages and disadvantages of retained profit

A

-no need to repay
-business may not have made enough profit
-owners will not get profit as income

85
Q

advantages and disadvantages of retained profit

A

-no need to repay= cheap
-flexible
-business may not have made enough profit
-owners will not get profit as income

86
Q

advantages and disadvantages of sale of assets

A

-no interest
-good if selling off old equipment or stock
-may be difficult to sell
-may take time to sell

87
Q

advantages and disadvantages of owners capital

A

-doesnt affect ownership/control
-readily available
-no interest
-owners risk savings
-leaves owner without any money for personal things

88
Q

advantages and disadvantages of a new partner

A

-new skills
-job sharing
-share profits
-decision making shared

89
Q

advantages and disadvantages of share issue

A

-new investors= more money
-no interest
-share of profits
-owners must share ownership

90
Q

advantages and disadvantages of crowdfunding

A

-new supporters can contribute a lot of money to the business
-no interest
-might not earn enough money
-if money is raised through investments than ownership will be shared

91
Q

total costs

A

fixed costs + variable costs

92
Q

importance of cash

A

-to pay fixed costs
-to pay employees
-to prevent business failure

93
Q

uses of cash flow forecasts

A

-planning tool= businesses can plan ahead
-to anticipate periods of cash shortages
-provide targets

94
Q

factors affecting choice of finance

A

-amount needed
-why its required
-legal status of business
-circumstances of business

95
Q

what is internal finance

A

raising funds from within the business
E.g owners capital, retained profit, selling unwanted assets

96
Q

what is external finance

A

raising funds from outside the business
E.g. overdraft, trade credit, loans, share issue, new partner, crowdfunding

97
Q

advantages and disadvantages of a mortgage

A

-bank loan just for the purchase of buildings and land
-can borrow a lot of money
-can be paid back in instalments
-interest still must be paid
-if payments are missed, property can be repossessed

98
Q

how is quality measured

A

-level of product returns
-customer complaints
-customer loyalty
-customer satisfaction rates

99
Q

what factors influence business locations

A

-cost of premises
-proximity to consumer footfall
-availability of labour

100
Q

role of procurement

A

-choosing suppliers
-ordering goods
-identifying goods to buy

101
Q

direct procurement

A

buying raw materials that are used in the making of the product or delivery of the service

102
Q

indirect procurement

A

buying maintenance contacts, admin stationary, marketing advert space, ICT

103
Q

how are suppliers chosen

A

-quality
-reliability= speed and flexibility
-value for money

104
Q

self-service

A

business procurement team buy a range of commonly used goods through suppliers

105
Q

e-marketplace

A

the business can register as a buyer and invites suppliers to submit their quotes for the supplies

106
Q

e-auctions

A

reverse auctions where many sellers bid to supply one buyer, prices go down with each bid rather than rising

107
Q

stages of choosing suppliers

A

1) identifying goods and services to buy
2)choosing suppliers
3)ordering goods and services
4)receiving deliveries

108
Q

what impacts the decisions of choosing suppliers

A

-time= if its late, there may be less production
-costs
-customer service= repeat service, lower costs

109
Q

logistics

A

transportation of raw materials and finished goods

110
Q

supply chain

A

the network of organisations that get products to customers
1)suppliers of raw materials
2)manufacturers
3)wholesalers/retailers
4)customers

111
Q

what is the consumer rights act

A

gives consumers the legal right to either get a refund for goods that are unsatisfactory, unfit for purpose or not as described or get it repaired

112
Q

supply chain management

A

ensures the right quantity of goods are in the right place at the right time, provided with right quality at the right price

113
Q

benefits of a good supply chain

A

-improved reputation
-customer satisfaction increased
-increased efficiency

114
Q

interest rates

A

refers to the costs of borrowing money or the reward for saving money, expressed as a %

115
Q

inflation

A

the average increase in prices of goods/services

116
Q

ethics

A

principal of knowing right decisions from wrong ones in business

117
Q

ethical considerations a business makes

A

-treatment of workers e.g. child labour, forced labour
-treatment of suppliers= fair trade
-sourcing e.g. ethical sourcing

118
Q

forced labour

A

any work/service which people are forced to do against their will under the threat of some form of punishment

119
Q

advantages and disadvantages of ethical behaviour

A

-better reputation, customer loyalty, lower costs (workers have better conditions so productivity increases)
-lower profit (paying higher costs), investments may be lower, time consuming to write ethical invoices

120
Q

environmental considerations

A

-sustainability= businesses have an ethical duty to make sure there are enough natural resources for the future e.g. using renewable sources
-waste disposal e.g. reduce, reuse, recycle
-pollution
-climate change

121
Q

advantages and disadvantages of being environmentally friendly

A

-lower costs (using renewable energy), higher sales, may gain subsidies from the gov
-production costs may be higher, capital costs higher for eco-friendly equipment

122
Q

economic climate

A

the general condition of the uk economy

123
Q

economy

A

the production of services and consumption of goods and services and the supply of money

124
Q

inferior goods

A

as consumer incomes fall, demand for these goods rises
-cheaper + targets for lower socio-economic groups

125
Q

normal goods

A

as income rises, customers buy more normal goods
-e.g. restaurants, cinemas, nike etc

126
Q

gross domestic product

A

measure all the products and services sold in the country

127
Q

boom economy

A

when the business in the country are doing well, GDP is high, unemployment is low so incomes are high

128
Q

economy in recession

A

GDP is falling, unemployment is high so income is low

129
Q

economic factors

A

-changing prices & impact on goods demanded= recession= unemployment + rising costs so prices increase so customers switch brands
-changing levels of incomes & impact on goods demanded= disposable income
-changing levels of employment & impact on goods demanded= unemployment-lower income, normal good sales fall
-changing levels of employment & impact on recruitment= larger pool of applicants
-impact on wage costs= willing to work for less= higher profit
-impact on training= costs increase due to untrained employees

130
Q

globalisation

A

the process by which the world is becoming more interconnected as a result of increased trade between countries
-increased production of goods and services around the world

131
Q

impacts of globalisation

A

-growth of MNCs (business that has operations in more than one country e.g. toyata)
-influences on business locations
-international branding = recognisable brands + customer loyalty
-how businesses compete internationally = consumers now have more info on products and prices e.g. sales taxes

132
Q

benefits of having a global brand

A

-higher sales + profits
-packaging + marketing is same
-access to economies of scales

133
Q

advantages and disadvantages of globalisation in the uk

A

-greater access to foreign markets (sales are lower in one country but high in another), access specialist skills
-struggle to compete on cost for goods as wage rates are high, suffered from structural unemployment based on loss of industries

134
Q

interdependent

A

two or more businesses are dependent on each other to trade (involves all 4 dpts)

135
Q

business operations dpt

A

-dpt depends on the size and industry its in though most businesses will have a marketing, HR, and finance dpt
-internal customer concept= the input of one dpt is the output of another therefore they are interdependent on each other

136
Q

business operations dpt

A

-dpt depends on the size and industry its in though most businesses will have a marketing, HR, and finance dpt
-internal customer concept= the input of one dpt is the output of another therefore they are interdependent on each other

137
Q

finance dpt (interdependent)

A

-they will prepare the accounts of the business
-Marketing= finance dpt set advertising budgets
-HR= finance dpt set HR budget so they know how many staff to hire

138
Q

HR dpt (interdependent)

A

-they will interview and hire new candidates
-marketing= hire new marketing research staff
-finance= pay wages

139
Q

marketing dpt (interdependent)

A

-will decided products made, carry out market research and advertise
-finance= sales forecasts that help set budgets
-HR= promotional staff may be needed

140
Q

impacts of business risks

A

-business failure= if they fail to plan for the future, may risk losing out to competitors
-failure in start-up plans= high costs + UK tax system
-financial risks for owners (entrepreneurial risks)
-lack of security for owners

141
Q

impacts of business risks

A

-business failure= if they fail to plan for the future, may risk losing out to competitors
-failure in start-up plans= high costs + UK tax system
-financial risks for owners (entrepreneurial risks)
-lack of security for owners

142
Q

impacts of business rewards

A

-business success= awards, fame, survival, growth, money
-keeps all the profit
-control= own boss= makes all the decisions

business/ geo <3 (10 decks)

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