Completion

Question 1

Objectives of financial function

Answer 1

1. To maximise profit by keeping expenses as low as possible
2. To increase profitability
3. To make sure the business has enough cash to cover expenses (liquidity)
4. To maintain a good ratio between own and borrowed capital
5. Budgeting

Question 2

Types of stock

Answer 2

Raw materials: products from the primary sector
Semi finished goods: bought with the aim of manufacturing into finished product
Finished goods: ready to be sold to the consumer to satisfy needs
Perishable stock: keep in cold storage
Dangerous material: must be stored according to prescribed rules
Maintenance stock: used/ consumed in the business
Capital goods: machines, equipment and tools used in the manufacturing process

Question 3

Diseconomies of scale

Answer 3

When the benefits of buying in bulk are no longer in place. Caused by lack of raw materials, communication.

Question 4

Aspects relating to production planning

Answer 4

1. Optimum manufacturing plant scale

2. Factory layout

Question 5

Optimum manufacturing plant scale

Answer 5

1. Size of factory
2. Law of increasing returns on diminishing costs
3. Capacity planning

Question 6

Factory layout

Answer 6

1. Logical flow of production
2. Workstations close to all materials
3. Use of ALL space
4. Future alterations
5. Safety standards compliance

Question 7

Equipment and machines in the plant

Answer 7

Depends on:

• price and maintenance costs
• availability of spare parts
• lifespan of machine
• resale value
• training and safety

Question 8

Advantages of automation

Answer 8

• lower labour costs
• faster production
• better quality
• workers can be retrained to learn new skills
• less issues with labour law

Question 9

Disadvantages

Answer 9

• workers may lose their jobs
• worker dissatisfaction
• high capital investment
• cost to retrain
• products need further refinement after machine processing