Unit 5 - Business operations Flashcards
Idek anymore
Economies of scale
Financial advantages (falling average costs) of producing something in very large quantities.
Internal economies of scale
External economies of scale
Types of economies of scale (6)
Technical economies
Managerial economies
Financial economies
Risk-bearing economies
Purchasing economies
Marketing economies
Diseconomies of scale
Rising average costs when a firm becomes too big.
Types of diseconomies of scale (4)
Bureaucracy
Poor communication
Lack of control
Levels of hierarchy
Increased bureaucracy
Poor communication
Lack of control
Levels of hierarchy
Technical economies
Managerial economies
Financial economies
Risk-bearing economies
Purchasing economies
Marketing economies
Obsolete
Production
The effective management of resources in producing goods/services.
Types of production
Job production
Batch production
Flow production
Job production
Products made to meet the specific requirements of individual customers.
Batch production
Products produced in groups or batches.
Flow production
Standardised products produced in a continuous sequence of operations on a production line.
Labour productivity
Labour-intensive production
Predominantly uses physical labour in the production of goods/services.
Capital-intensive production
Predominantly uses machinery and technology in the production of goods/services.
Factors of production
The resources people use to produce goods and services; they are the building blocks of the economy.
Name the factors of production (4)
Capital
Enterprise
Land
Labour
(or CELL)
Capital (FOP)
Any man-made resource that is used to produce goods/services
Enterprise (FOP)
Land (FOP)
Labour (FOP)
Kaizen
Japanese term that means continuous improvement.
TQM (Total Quality Management)
