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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
Q

Why does inflation occur?

A
  1. When expenses increase business put prices up

2. If there is increased demand businesses can charge more

26
Q

How can the Bank of England control inflation?

A

By reducing interest rates to reduce disposable income thus reducing demand for goods thus prices fall

27
Q

What is income tax?

A

A tax on income where the money goes from the earnings straight to the central government

28
Q

What is national insurance tax?

A

A tax deducted to support the NHS and state pensions. Government will collect more of this tax as employment increases

29
Q

What is corporation tax?

A

A tax limited companies pay. The government will collect more tax from GG toys if they make higher profits

30
Q

What are business rates?

A

A tax paid by business on the property that they use. Bowton council would collect this money

31
Q

What is council tax?

A

A tax paid by homeowners on the property that they live on

32
Q

What is VAT?

A

A tax on spending, most goods have a 20% vat charge

33
Q

What is a monopoly market?

A

A market dominated by one seller

34
Q

What is perfect competition?

A

A market in which there are a large number of sellers

35
Q

What are the features of a monopoly market?

A

One seller
Low choice of products
High prices

36
Q

What are the features of a competitive market?

A

Lots of sellers
High choice of products
Lower prices

37
Q

How can GG Toys be better than rivals?

A 
Improve quality
Range of products
Lower prices
Fast delivery
E commerce
Improved customer service
Branding
Unique selling point
38
Q

What are the pressures of operating in a highly competitive market?

A

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
Q

When does a monopoly market exist, by law?

A

When a business has a market share of at least 25%

40
Q

How does business activity impact upon the environment?

A 
Air pollution
Using non renewable energy
Congestion
Noise pollution
Waste disposal
41
Q

What are negative externalities/external costs?

A

When business activity creates negative impacts to a third party

42
Q

How could GG Toys behave more sustainably?

A

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
Q

What are ethical issues related to GG Toys?

A 
Unsafe working conditions
Unsafe overtime
Poor health and safety
Low/unfair wages
Child labour
Pollution
44
Q

What is meant by ethical behaviour?

A

What is morally right and morally wrong

45
Q

What are the advantages of operating as an ethical business?

A

Better reputation
USP
More customers as a result

46
Q

What is a disadvantage of operating as an ethical business?

A

More expensive

47
Q

What are unit costs?

A

Average costs

total costs/amount sold

48
Q

What is purchasing economies of scale?

A

A business is given a discount for buying in large quantities

49
Q

What are financial economies of scale?

A

Bigger firms are likely to get cheaper loans (interest) because they have more security (assets) to offer the bank

50
Q

What are managerial economies of scale?

A

Employing specialist managers to increase efficiency (productivity) that means costs are reduced

51
Q

What are marketing economies of scale?

A

Larger firms can benefit from being able to use more effective methods of marketing which reach more people (Chanel)

52
Q

What are technical economies of scale?

A

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
Q

What are risk bearing economies of scale?

A

Large firms (Virgin) can spread risk by diversifying into different products or taking over suppliers

54
Q

What are diseconomies of scale?

A

When unit costs rise with production increase

55
Q

Why would diseconomies of scale occur?

A

Firms become too big to be managed efficiently

business. (11 decks)

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