Economies And Diseconomies Flashcards
Scale
Size of a business
Economies of scale
Financial advantages of producing something in very large quantities
Diseconomies of scale
Rising average cost when a business becomes too big
Internal economies of scale
Cost benefits than an individual firm can enjoy when it expands
External economies of scale
Cost benefits that all firms in the industry can enjoy when the industry expands
Production
Transformation of goods into a finished product
Job production
Method of production that involves employing all factors to complete one unit of output at a time
Batch production
Method that involves competing one operation at a time on all units before performing the next
Flow production
Large scale production of a standard product where each operation on a unit is performed continuously on after the other, usually in a production line
Process production
Form of flow production where materials pass through a plant where a series of processes are carried out in order to change the product
Labor intensive production
Production methods that make more use of labor relative to machinery
Capital intensive production
Production methods that make more machinery relative to labour,
Productivity
Rate at which goods are produced and the amount produced, especially in relation to the work time and money needed to produce them
Labor productivity
Output per worker in given period of time
Flex time system
System in which people work a fixed number of hours each week or month, but can change the times at which they start and finish each day
Downsizing
Process of reducing capacity, usually laying off staff
Outsourcing
Contracting out if work that might otherwise have been performed within the organization to other businesses
Quality
Features of a product that allow it to satisfy customer needs
Quality control
Making sure that the quality of a product meets the quality standards
Total quality management
Managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business
Quality assurance
Working methods hat take into account customers wants when standardizing quality, it often involves guaranteeing that quality standards are met
Unique selling point
Feature of a product that no other similar products have, used in advertising to try to persuade people to buy it
