unit 4 key words Flashcards
production
the process of converting the input such as land, labour and capital into saleable goods, for example shoes and cell phones
productivity
a measure of the efficiency of input used in the production process, especially labour and capital
inventories
the stick of raw materials, work-in-progress and finished goods held by a business
lean production
the production of goods and services with the minimum waste if resources
job production
the production of items one at a time
batch production
the production of goods in batches. Each batch passes through one stage of production before moving on to the next stage
flow production
the production of very large quantities of identical goods using a continuously moving process
capital intensive
production process that uses a high quantity of capital equipment compared with labour input
fixed cost
costs that do not change with output
variable costs
costos that change in direct proportion to output
total costs
all the variable and fixed costs of producing the total output
average costs
the costs of producing a single unit of output
economic of scale
the reduction in average costs as a result of increasing the scale of operations
Diseconomies of scale
factors that cause average costs to rise as the scale of operations increases
break-even
the level of output where revenue equals total cost the business is making neither profit nor loss
