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Business > Paper 2 > Flashcards

Paper 2 Flashcards

1
Q

Give an advantage and disadvantage of job production

A

Advantage is that the item is likely to be of high quality and can be specific to the customer if they want it to be

Disadvantage is that it is very expensive and the production may be slow

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2
Q

Give an advantage and disadvantage of batch production

A

Advantage is that it is cheaper than job production and it can vary to meet different needs

Disadvantage is that it may be repetitive

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3
Q

Give an advantage and disadvantage of flow production

A

Advantage is that large amounts can be made at once

Disadvantage is that they may not be high quality and that the workers may get bored as it is very repetitive

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4
Q

What are 3 ways that technology can be used in production?

A
  1. Robotics
  2. Computers
  3. Automation
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5
Q

What is 2 advantages of technology in production?

A
  1. Machines can replace workers at a much lower price
  2. Waste is reduced as machines are usually more accurate than humans
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6
Q

What are 2 disadvantages of technology in production?

A
  1. The business needs to recruit skilled labour to work with the technology
  2. Machines can break down without warning
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7
Q

What are 2 benefits of providing quality goods and services?

A
  1. Waste is reduced
  2. The business gains a good reputation
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8
Q

What is an advantage of quality control?

A
  • Stops poor quality goods and services being sold
  • Production can continue while inspection takes place
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9
Q

What is a disadvantage of quality control?

A
  • It does not prevent waste
  • Inspection can be costly
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10
Q

What is an advantage of quality assurance?

A
  • It should reduce wastage and costs
  • All workers are responsible for quality which may motivate them
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11
Q

What is a disadvantage of quality assurance?

A
  • Workers may be stressed by the constant checking of their own work
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12
Q

What is an advantage of face to face selling?

A
  • Can increase sales
  • Can help sales in a business
  • The customer can ask questions and bargain with the producers
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13
Q

What is a disadvantage of face to face selling?

A
  • May not always be helpful for customers
  • Retailers costs are high if expensive shops are needed
  • Customers have to be there to have face to face selling so it isn’t available 24/7
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14
Q

What is an advantage of telesales?

A
  • Can increase sales
  • May cost the shop less
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15
Q

What is a disadvantage of telesales?

A
  • Costs involved such as a warehouse to store goods
  • Sellers may ‘cold call’
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16
Q

What are 3 influences of commerce on business?

A
  1. Delivery options
  2. Levels of employment
  3. New skills
  4. Location
  5. Creation of new departments
  6. Business opportunities
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17
Q

What is an advantage of e-commerce to producers?

A
  • It is possible to sell 24/7
  • It is usually cheaper
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18
Q

What is a disadvantage of e-commerce to producers?

A
  • Competition will increase
  • Delivery systems may be unorganised
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19
Q

What is an advantage of e-commerce to customers?

A
  • Customers can buy 24/7 from anywhere
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20
Q

What is a disadvantage of e-commerce for customers?

A
  • It is impersonal so customers may not feel appreciated
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21
Q

What is the importance of customer service and what might be a problem with it for the business?

A
  • It increases sales as the customer feels important
  • Although it can be expensive to train workers
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22
Q

What is the importance of after sales service?

A

It can increase sales as customers feel confident although it can be expensive to train workers

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23
Q

What is the importance of product knowledge?

A

It increases sales as customers are given info that helps them make decisions properly. Although it can be expensive to train staff

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24
Q

What is the importance of customer engagement and what might be a problem it causes for the business?

A
  • It increases sales as customers feel comfortable with the buying experience
  • Although it can be expensive to train staff
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25
Q

What does the law state that goods and services must be?

A
  1. Satisfactory quality
  2. Fit for purpose
  3. As described
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26
Q

What are 3 factors that influence location?

A
  1. Costs
  2. Proximity to the market
  3. Proximity to labour
  4. Proximity to materials
  5. Government
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27
Q

What are 2 roles of procurement?

A
  1. identifying goods and services to buy
  2. Choosing suppliers
  3. Ordering goods and services
  4. Receiving deliveries from suppliers
28
Q

What are 2 logistical issues for a business?

A
  1. Time
    - The supplier must be able to deliver the goods on time
  2. Reliability
    - They must be able to supply goods at a given quantity and quality
  3. Costs
    - Customers will want low delivery costs while suppliers will want them to be high
29
Q

What are 2 roles of the finance function?

A
  1. Calculating the average rate of return
  2. Calculating the break-even output needed to avoid a loss
  3. Calculating sales
  4. Calculating profit
  5. Forecasting cash-flow
  6. Managing payments
  7. Arranging finance
30
Q

What are 2 reasons that a business could need finance?

A
  1. Establishing a new business
  2. Funding expansion
  3. Recruitment
  4. Marketing
  5. Running the business
31
Q

What is an advantage and disadvantage of owners capital?

A

Advantage
- no need to repay
- They won’t have to pay interest on it
Disadvantage
- Owners risk savings
- The owner may not have enough/any savings which can be used

32
Q

What is an advantage and disadvantage of retained profit?

A

Adv
- No need to repay
Dis
- Business may not have made profits

33
Q

What is an advantage and disadvantage of sales of assets?

A

Adv
- No need to repay
Dis
- May be difficult to resell
- The busines could have no assests to sell

34
Q

What is an advantage and disadvantage of overdraft?

A

Adv
- meets short term cash flow problems
Dis
- Interest is charged each day

35
Q

What is an advantage and disadvantage of trade credit?

A

Adv
- The business can have goods to sell
Dis
- Goods must be paid for even if they don’t sell so it can be more expensive than before

36
Q

What is an advantage and disadvantage of taking on a new partner?

A

Adv
- The new partner may bring new skills
Dis
- They will have to share ideas and profit

37
Q

What is an advantage and disadvantage of a loan?

A

Adv
- repayment is made in fixed sums over a period of time
Dis
- interest must be paid

38
Q

What is an advantage and disadvantage of a share issue?

A

Adv
- No need to repay
Dis
- Shares can only be sold by limited companies

39
Q

What is an advantage and disadvantage of crowdfunding?

A

Adv
- No need to repay
Dis
- Interest will be paid if it is through a loan

40
Q

What are 2 examples of short term finance?

A
  1. Owners capital
  2. Sales of assets
41
Q

What are 2 examples of medium term finance?

A
  1. Retained profit
  2. Bank loan
42
Q

What are 2 examples of long term finance?

A
  1. Retained profit
  2. Bank loan
43
Q

Define revenue

A

The money received from sales

44
Q

How do you calculate total costs?

A

Total costs = fixed costs + variable costs

45
Q

How do you calculate gross profit margin?

A

Gross profit x 100 / total revenue

46
Q

How do you calculate net profit margin?

A

Net profit x 100 / total revenue

47
Q

Define the break even quantity

A

the amount a business must sell to earn enough revenue just to cover its costs so that it doesn’t make a profit or loss

48
Q

How do you calculate the break even output?

A

Break even output = total fixed costs / price - variable costs per unit

49
Q

What are 2 ways that the break even forecast can be used?

A
  1. Planning how much to produce
  2. Planning the price to charge for a product
50
Q

What is the importance of cash to a business?

A

Provides liquidity and enables a business to meet its short term debts/expenses

51
Q

What is net cash flow?

A

Total inflow of cash minus total outflow

52
Q

What are 3 ethical considerations that a business needs to take?

A
  1. Sourcing of materials (they must make sure they are from businesses that do not use child labour)
  2. Treatment of customers and marketing decisions (be careful not to overcharge customers)
  3. Treatment of suppliers (Avoid late payments to them)
  4. Treatment of workers (do not employ child labour and pay workers a fair wage)
53
Q

What is a possible advantage of being ethical?

A

Sales may be higher because their reputation for being ethical will lead to a trust from customers

54
Q

What is a possible disadvantage of being ethical?

A

Costs may be higher because they have to employ workers and pay them a full wage and not use child labour

55
Q

What are 3 environmental considerations?

A
  1. Sustainability
  2. Waste disposal
  3. Pollution
  4. Climate change
56
Q

What is an advantage of being environmentally friendly?

A

Sales may be higher because customers may prefer to buy from a business that cares about the environment

57
Q

What is a disadvantage of being environmentally friendly?

A

Production costs may be higher if materials produced in an environmentally friendly way are more expensive

58
Q

Define what is meant by economic climate

A

How well the country is doing in terms of levels of income and employment

59
Q

What could happen as a result of a rise in income and employment?

A
  • There could be more sales of luxury goods
  • Cheaper goods could see a fall in sales
  • all businesses will have an impact on their sales
60
Q

Define globalisation

A

Businesses activity around the world and how it has become increasingly interconnected

61
Q

What is meant by the global movement of people?

A

Businesses may recruit workers from other countries and send workers to work abroad

62
Q

What are 2 advantages of globalisation?

A
  1. Increased sales
  2. Risk is spread out among countries
  3. Lower costs
  4. Tax avoidance
63
Q

How is marketing affected by locating abroad?

A

They have to make products that are specific to different countries

64
Q

How is growth affected by locating in another country?

A

It is expanding

65
Q

How is finance affected when a business locates in another country?

A

They have to arrange loans and other sources of finance to help them abroad

66
Q
A

Business (5 decks)

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