business unit 4 vocabulary

Question 1

productivity

Answer 1

the output measured against the inputs used to create it

Question 2

productivity formula

Answer 2

quantity of output / quantity of input

Question 3

labour productivity formula

Answer 3

output over a given period of time / number of employees

Question 4

buffer inventory level

Answer 4

inventory held to deal with uncertainty in customer demand and deliveries of supplies

Question 5

lean production

Answer 5

techniques used by the business to cut down waste and therefore increase efficiency, for example, by reducing the time it takes for a product to be developed and become available for sale

Question 6

kaizen

Answer 6

a Japanese term meaning continuous improvement through the elimination of waste

Question 7

just-in-time JIT

Answer 7

a production method that involves reducing or virtually elimination of waste inventories of the finished product. supplies arrive just at the time they are needed

Question 8

job production

Answer 8

where a single product is made at a time

Question 9

batch production

Answer 9

where a quantity of one product is made, then a quantity of another item will be produced

Question 10

flow production

Answer 10

where large quantities of a product are produced in a continuous process. it is sometimes referred to as mass production

Question 11

automation

Answer 11

where equipment used in the factory is controlled by a computer to carry out mechanical processes
eg. spraying paint on a car
the production line will consist mainly of machines and there are only a few people needed to ensure everything runs smoothly

Question 12

mechanization

Answer 12

where production is done by machines but operated by people
eg. printing process

Question 13

computer aided design CAD

Answer 13

a computer software that draws items being designed more quickly and allows them to be rotated to see the item from all sides, it is used for designing are products or restyling existing ones

Question 14

computer aided manufacture CAM

Answer 14

where computers monitor the production process and control machines or robots on the factory floor

Question 15

computer integrated manufacturing CIM

Answer 15

the total integration of computer aided design CAD and computer aided manufacture CAM. the computers that design the products are linked directly to the computers that aid the manufacturing process

Question 16

electronic point of scale EPOS

Answer 16

used at checkouts where the operator scans the bar code of each item

Question 17

electronic funds transfer at point of scale EFTPOS

Answer 17

where the electronic cash register is connected to the retailer’s main computer and also to banks over a wide area computer network

Question 18

fixed costs

Answer 18

costs which do not vary the number of items sold or produced in the short run. they have to be paid whether the business is making any sales or not. they are also known as overhead costs

Question 19

variable costs

Answer 19

costs which vary directly with the number of items sold or produced

Question 20

total costs

Answer 20

fixed costs + variable costs

Question 21

average cost per unit

Answer 21

the total cost of production divided by the total output. also known as unit cost

Question 22

economies of scale

Answer 22

the factors that lead to a reduction in average costs as a business increases in size

Question 23

diseconomies of scale

Answer 23

the factors that lead to an increase in average costs as a business grows beyond a certain size

Question 24

break even level of output

Answer 24

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

Question 25

break even charts

Answer 25

graphs which show how costs and revenues of a business change with sales. they also show the break even level of output

Question 26

revenue

Answer 26

the income during a period of time from the sale of goods and services

Question 27

total revenue formula

Answer 27

quantity sold x price

Question 28

break even point

Answer 28

the level of sales at which total costs = total revenue

Question 29

contribution

Answer 29

selling price - variable costs

Question 30

break even formula

Answer 30

total fixed costs / contribution per unit

Question 31

quality

Answer 31

to produce a good service which meets customer expectations

Question 32

quality control

Answer 32

the checking for quality at the end of the production process, whatever it is the production of a product or service

Question 33

quality assurance

Answer 33

the checking for the quality standards throughout the production process, whether it is the production of a product or service

Question 34

total quality management TQM

Answer 34

the continuous improvement of products and processes by focusing on quality at each stage of production