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business. > Production, Finance And External Environment (GCSE) > Flashcards

Production, Finance And External Environment (GCSE) Flashcards

1
Q

What is mechanisation

A

When machinery is used but workers are still required to operate the machinery. E.g a driver is needed for a combine harvester

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2
Q

What is automation

A

When machinery is used and a computer controls its operation, e.g Amazon robots

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3
Q

2 advantages of automation

A
  1. Less mistakes are made

2. Large amounts can be produced quicker so productivity increases

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4
Q

2 disadvantages of automation

A
  1. Buying and maintaining machinery is expensive

2. The system could break down

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5
Q

Advantages of job production

A
  1. More motivated, not doing repetitive tasks
  2. Better quality
  3. Meets customer needs
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6
Q

Disadvantages of job production

A
  1. The cost of production is normally higher

2. Labour costs increase because of skill required

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7
Q

What is batch production

A

When there are set stages that the production needs to go through. One process has to be completed before the next can begin.

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8
Q

What is flow production (mass production)

A

A continuous movement of items through the production process. This means that when one task is completed the next tasks immediately begins

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9
Q

What is added value

A

The increased worth a business creates for a product (branding, design, quality)

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10
Q

3 ways of increasing efficiency in a business

A
  1. Technology
  2. Just in time
  3. Total Quality Management
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11
Q

Why might a business need to raise money

A
  1. Start up business
  2. Invest in growth (new product)
  3. Buy new equipment
  4. Solve cash flow problems
  5. Move location
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12
Q

Price elasticity of demand:

What might affect the sensitivity of a chance in price of a product?

A
  • If it’s luxury
  • Are there cheaper alternatives
  • Competitor price
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13
Q

Define break even

A

The point at which the sales are exactly the same as the costs

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14
Q

Break even advantages

A

Can set business targets
Useful for getting a bank loan
Can help when choosing whether to increase prices and reduce costs

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15
Q

Break even disadvantages

A

Forecast figures may be different to actual
Figures tend to relate to one product
Break even assumes all output it sold

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16
Q

Advantages of high unemployment rate

A

More available workers

Business can employ workers cheaply

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17
Q

Disadvantages of high unemployment rate

A

Workers are demotivated by a threat of job loss

People have less disposable income

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18
Q

What are the 3 ways a business is

affected by interest rates

A
  1. The cost to business of borrowing
  2. The cost to customer on mortgage etc
  3. The reward for saving
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19
Q

What are the impacts of poor profitability?

A
  1. Staff fear losing jobs
  2. Shareholders reduced dividends
  3. Management reduced bonuses
  4. Share price falls and business is at risk of takeover
  5. The business has a lack of profit to reinvest
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20
Q

What are advantages of being in the EU?

A
  1. Access to single market
  2. More potential employees
  3. Increases Market size
  4. Common standards
  5. Grants
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21
Q

What are the disadvantages of being in the EU?

A
  1. Environmental standards

2. Minimum wage laws

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22
Q

What is the definition of globalisation?

A

The process by which business activities in different countries are becoming more connected to each other

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23
Q

Why might China not benefit from GG toys locating a factory there?

A
  1. Exploitation of workers
    2: pollution
  2. Local culture
24
Q

What is inflation?

A

When prices of goods and services are generally rising

25
Why does inflation occur?
1. When expenses increase business put prices up | 2. If there is increased demand businesses can charge more
26
How can the Bank of England control inflation?
By reducing interest rates to reduce disposable income thus reducing demand for goods thus prices fall
27
What is income tax?
A tax on income where the money goes from the earnings straight to the central government
28
What is national insurance tax?
A tax deducted to support the NHS and state pensions. Government will collect more of this tax as employment increases
29
What is corporation tax?
A tax limited companies pay. The government will collect more tax from GG toys if they make higher profits
30
What are business rates?
A tax paid by business on the property that they use. Bowton council would collect this money
31
What is council tax?
A tax paid by homeowners on the property that they live on
32
What is VAT?
A tax on spending, most goods have a 20% vat charge
33
What is a monopoly market?
A market dominated by one seller
34
What is perfect competition?
A market in which there are a large number of sellers
35
What are the features of a monopoly market?
One seller Low choice of products High prices
36
What are the features of a competitive market?
Lots of sellers High choice of products Lower prices
37
How can GG Toys be better than rivals?
``` Improve quality Range of products Lower prices Fast delivery E commerce Improved customer service Branding Unique selling point ```
38
What are the pressures of operating in a highly competitive market?
Making prices not too high or low Match delivery (Amazon same day) Pressure on revenue and profits Pressure to be more efficient in order to be able to reduce prices
39
When does a monopoly market exist, by law?
When a business has a market share of at least 25%
40
How does business activity impact upon the environment?
``` Air pollution Using non renewable energy Congestion Noise pollution Waste disposal ```
41
What are negative externalities/external costs?
When business activity creates negative impacts to a third party
42
How could GG Toys behave more sustainably?
Use recycled materials for products/packaging Move production back to Bowton instead of China Reduce amount of packaging used Use renewable energy to power factory
43
What are ethical issues related to GG Toys?
``` Unsafe working conditions Unsafe overtime Poor health and safety Low/unfair wages Child labour Pollution ```
44
What is meant by ethical behaviour?
What is morally right and morally wrong
45
What are the advantages of operating as an ethical business?
Better reputation USP More customers as a result
46
What is a disadvantage of operating as an ethical business?
More expensive
47
What are unit costs?
Average costs | total costs/amount sold
48
What is purchasing economies of scale?
A business is given a discount for buying in large quantities
49
What are financial economies of scale?
Bigger firms are likely to get cheaper loans (interest) because they have more security (assets) to offer the bank
50
What are managerial economies of scale?
Employing specialist managers to increase efficiency (productivity) that means costs are reduced
51
What are marketing economies of scale?
Larger firms can benefit from being able to use more effective methods of marketing which reach more people (Chanel)
52
What are technical economies of scale?
As a firm gets bigger, it can use better methods and equipment. For example, a distribution business can use a bigger lorry which would still only need one driver
53
What are risk bearing economies of scale?
Large firms (Virgin) can spread risk by diversifying into different products or taking over suppliers
54
What are diseconomies of scale?
When unit costs rise with production increase
55
Why would diseconomies of scale occur?
Firms become too big to be managed efficiently

business. (11 decks)

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