Theme 2 analysis COPY Flashcards
1
Q
Benefit of using batch production
A
2
Q
Drawback of batch production
A
3
Q
Benefit of using budgets
A
4
Q
Drawback of Using Budget
A
- Budget set limit on Spending
- Prevent Businesses Pursing Opportunites
- Limits chance of growth
- Produce Lower Output
- Less likely to gain EOS
- Fixed Cost Spread over Less units
- Increase Unit Fixed Cost
- Lower operating profit Margin
5
Q
Benefit of using cell production
A
6
Q
Cell production Drawback
A
- Cell Production Involves Employees
coming Together as a Team to
Complete Each part of Production - Means that Employees will need to
be Multi-Skilled to Work across
production - Business need to Invest into
Training so Staff have Necessary
Skills - Increase Expenses
- Reducing Operating Profit
- Less profit to Retain + Reinvest
7
Q
Quality control benefit
A
8
Q
Drawback of quality control
A
9
Q
Benefit of just-in-time stock management
A
10
Q
Drawback of just-in-time stock management
A
11
Q
Importance of good stock management
A
12
Q
Benefit of low capacity utilisation
A
13
Q
Benefit of using flow production
A
14
Q
Flow Production Drawback
A
- High Vol of Identical products
Made - Through use of Machinary
- Damage Business Liquidity in ST
- As Sig Investment needed to
purchase Machinary - Reducing Cash Reverseves ST
- Low Current Assets + Low Liqudity
15
Q
Benefit of using historical budgeting (for large businesses)
A
16
Q
Drawback of historical budgeting
A
17
Q
Benefit of using job production
A
18
Q
Drawback of job production
A
19
Q
Benefit of adopting a Kaizen approach
A
20
Q
Drawback of Kaizen
A
21
Q
Benefit of quality assurance
A
22
Q
Drawback of quality assurance
A
23
Q
Benefit of zero-based budgeting
A
24
Q
Drawback of zero based budgeting
A
25
Benefit of a capital intensive production approach
26
Gaining a competitive advantage from lean production
27
Drawback of Gaining Competitive Advantage with Lean Production
1. If Business adopts Lean production
Approach - e.g. JIT or Kaizen
2. Require Business to have Highly
Skilled Staff
3. Either tasked with identifying Area
for Continuous Improvement or
being able to adapt quickly to
trends
4. Require Business to Invest Heavily
into Training
5. Increase Expenses
6. Reduce Operating Profit
7. Less Retained profit
28
Benefit of a strong pound
29
Drawback of a strong pound
30
Reasons why incomes may not be impacted by rising inflation
31
Impact of inflation on cost of sales
32
Why incomes may be affected by rising inflation
33
Impact of a stronger pound on demand for domestic businesses
34
Benefit of improved productivity
35
Interpreting a stock control diagram
36
Benefit of a labour intensive production process
37
Drawback of a labour intensive production process
38
Production at minimum average cost
39
Benefit of quality circles
40
Drawback of quality circles
41
Reasons why inflation may not impact cost of sales
42
Benefit of a weaker pound
43
Drawback of a weaker pound
44
Impact of high interest rates
45
However….. of high interest rates
46
Impact of low interest rates on consumer incomes
47
Impact of low interest rates on savings
48
Impact of changes in national insurance
49
benefit of government increasing national insurance
50
recession
51
how businesses can benefit from a recession
52
spreading risk across different countries
53
Boom
54
inflation risk during a boom
55
effect of economic uncertainty on business environment
56
Benefit of a grant
57
Drawback of a grant
58
retained profit benefit
59
retained profit drawback
60
sale of asset benefit
61
sale of asset drawback
62
family and friends benefit
63
family and friends drawback
64
peer to peer benefit
65
peer to peer drawback
66
Venture Capital + Business Angle Benefit - SMALL BUSINESS ONLY
1. Business Angel likely to have
experience
2. They Provide support with Finance
3. Give Competitive Advantage =
Porter Differentiation Strategy
4. Increase Sales Volume
5. Increase Order to Suppliers
6. For Raw Material Such as..
7. Lower Unit Variable Cost
8. Opportunity to Lower Selling Price
to Increase Sales Further to
Increase Market Share
67
drawback venture capital
68
benefit of crowdfunding
69
drawback of crowd-funding
70
benefit of loans
71
drawback of loans
72
benefit of share capital
73
drawback of share capital
74
benefit of overdrafts
75
drawback of overdrafts
76
benefit of leasing
77
Drawback of leasing
78
Benefit of trade credit
79
Drawback of trade credit
80
limited liability benefit
81
limited liability drawback
82
benefit of business plan
83
drawback business plan
84
cashflow forecast benefit
85
cashflow forecast drawback
86
Sales forecasting Benefit
87
Sales forecasting drawback
88
_Adapting to Break-even as the ‘hook’ in a question……._
89
break-even is useful because...
90
Break-even is not useful because..
91
_Improving the break-even point_
* Reduce fixed costs
Eg. Move to a smaller premises, reduce marketing budget, reduce staff wages/make redundancies
* Reduce variable costs (higher contribution per unit)
Eg. Switch to a cheaper supplier
* Increase selling price (higher contribution per unit)
92
consumer protection legislation
93
Employee protection
1. Employee Protection Legislation ( Min Wages , Sick Pay ect)
2. Ensure Business must meet Employee Basic Needs
3. By Giving them Min wage + Allowing them Aqequate Rest
4. Means Employee Hygience Factors met
5. Prevent Demotivation according to Herzberg
6. Increase productivitiy
7. Increase Output Per Worker
8. Fixed Cost of Wages spread over more units
9. Lower Fixed Cost per Unit
10. Increase Operating Profit Margin
94
Environmental Protection
1. Prevent Businesses from Causing Excess Pollution + Producing Large Amount of Waste
2. If Business Follow Legislation
3. Appear more Enviromentally Friendly
4. Makes them More Ethical
5. Strong Brand Image
6. More Price Inelastic
7. Able to Increase Price without SIG Decrease in Demand
8. Increase Revenue
9. Increase Gross + operating profit
95
Competition Policy
1. Prevent business Suppliers from Colluding or Forming Monopolies
2. More Choice between Diff Suppliers
3. Reduce Bargaining Power of Supplier
4. Supplier unable to charge High Price
5. Reduce Cost of Raw Materials
6. Lower Variable cost
7. Increase Gross profit Margin
8. Increase Operating profit
96
Health + Safety Benefit
1. Business responsible for ensuring safety of staff
2. Employee are trained + Working Conditions safe
3. Ensuring Employee Safety Needs Met ( Maslow)
4. Increase Motivation
5. Increase productivity
6. Fixed Cost of Wages Spread over More Units
7. Lower Fixed Cost Per Unit
8. Increased Operating profit Margin
97
Drawback for ALL Legislations - MUST ADAPT
1. Legislation lead to Increase bureaucracy
2. As Process + proeceduares need to be Implemented to Ensure Legislation Followed
3. Experts need to be Hired to ensure this is followed
4. Increase cost of Wages
5. Increase Fixed cost
6. Reducing Operating profit Margin
7. Reduced Retained Profit
8. Reducing Capital for Reinvestment into...
