section 4 Flashcards
Total Quality Management (TQM)
the continuous improvement of products and processes by focusing on quality at each stage of production
Quality Assurance
the checking for the quality standards throughout the production process, whether it is the production of a product or service
Quality Control
the checking for quality at the end of the production process, whether it is the production of a product or service
Quality
to produce a good service which meets customer expectations
Break-Even Formula
Total Fixed Costs / Contribution per Unit
Break-Even Point
the level of sales at which total costs = total revenue
Total Revenue Formula
Quantity Sold x Price
Break-Even Charts
graphs which show how costs and revenues of a business change with sales. They also show the break-even level of output
Break-Even Level of Output
the quanity that must be produced/sold for total revenue to equal total costs
Diseconomies of Scale
the factors that lead to an incease in average costs as a business grows beyond a certain size
Economies of Scale
the factors that lead to a reduction in average costs as a business increases in size
Total Costs
fixed costs + variable costs
Variable Costs
costs which vary directly with the number of items sold or produced
Fixed Costs
costs which do not vary with the number of items sold or produced in the short run. They have to be paid whether the business is making any sales or not. They are also known as overhead costs
Lean Production
techniques used by the business to cut down waste and therefore increase efficiency, for example, by reducing the time it takes for a product to be developed and become available for sale
