3 - Business Functions and methods of production

Question 1

What are the business functions/departments

Answer 1

• Marketing
• Production/operations
• Accounting and finance
• Human Resources

Question 2

What does the marketing function do

Answer 2

• Advertisement
• Market research
• Customer service, PR

Question 3

What does operations department do

Answer 3

• Convert raw materials into goods and services (manufacturing)
• In Control of logistics

Question 4

What does accounting and finance department do

Answer 4

• Record cash flow transactions
• Conduct cash flow forecasts
• Produce financial statements
• Ensure tax is paid correctly

Question 5

What does Human Resources do

Answer 5

• Recruitment
• Selection
• Hand employee relations eg payroll and training
• Redundancies

Question 6

How could business size be measured

Answer 6

• No of employees
• Market share
• Turnover
• Profits
• Value of assets
• Brand/history

Question 7

How can smaller firms compete with larger ones

Answer 7

USP eg customer service, quality, local materials

Question 8

What are some of the attractions of international trade

Answer 8

• Gain EOS
• Variety for consumer
• Business growth

Question 9

What are the 3 trading areas

Answer 9

• Free trade areas
• Customs unions
• Common markets

Question 10

What are free trade areas

Answer 10

No internal tariffs or quotas

Question 11

What is a customs union

Answer 11

Has common external tariffs

Question 12

What is a common market

Answer 12

Has common tariffs and free movement

Question 13

What is a trading bloc

Answer 13

A group of countries within a particular geographical region that protect themselves from imports from non-members

Question 14

Examples of difficulties of exporting abroad

Answer 14

• Finding customers
• Market knowledge
• Exchange rates
• Cultural differences
• Trade barriers

Question 15

What is a multinational

Answer 15

Firm based in one country but operates in many other

Question 16

Benefits of multinational

Answer 16

• Access to more customers
• avoid tax
• EOS

Question 17

Disadvantages of multinational

Answer 17

• Diseconomies of scale
• Cultural differences
• Exchange rates

Question 18

What is meant by globalisation

Answer 18

Increased integration and interdependence of national economies

Question 19

Factors affecting globalisation

Answer 19

• Trade blocs
• Growth of emerging markets
• Improvements in infrastructure, transport, communication, technology

Question 20

Joint venture definition

Answer 20

Where 2 or more firms share resources and expertise to achieve a particular good, risks and rewards are shared
Eg BMW and brilliance

Question 21

Advantages of joint venture

Answer 21

• Spread risk
• Move into new markets
• Growth

Question 22

Limitations of joint ventures

Answer 22

• Share rewards

- Difficultly In co-ordinating it

Question 23

What is a strategic alliance

Answer 23

An arrangement between 2 companies that have decided to share resources to undertake a mutually beneficial project

Question 24

How is a strategic alliance different to a joint venture

Answer 24

It is less permanent

Question 25

What is operations/productions

Answer 25

The functional area responsible for turning inputs into outputs as efficiently as possible

Question 26

What are operations department responsible for

Answer 26

- Quality Control - Packaging - Logistics

Question 27

Possible objectives of operations department

Answer 27

- Break even - Increase profit margins - Increase output - Improve quality

Question 28

What factors should be considered when setting production objectives

Answer 28

- Type and size of business - Conflicting objectives - Economic position - Competition - Law and legislation

Question 29

What is adding value

Answer 29

An improvement or addition to a product or service that makes it worth more

Question 30

An example of adding value

Answer 30

Branding

Question 31

What are the 3 methods of production

Answer 31

Job Batch Flow/mass

Question 32

What is job production

Answer 32

Making a unique product to customers order

Question 33

What is batch production

Answer 33

Making a specific quantity of products

Question 34

What is mass/flow production

Answer 34

Making large quantities of the same product

Question 35

Advantages of job production

Answer 35

- High quality, so high prices | - Motivation for workers

Question 36

Disadvantages of job production

Answer 36

- Time consuming - High costs - High pressure

Question 37

Advantages of batch production

Answer 37

- Produce range of products in large quantities | - Skilled labour (efficiency)

Question 38

Disadvantages of batch

Answer 38

- Downtime reduces production | - High training and wage costs due to range of products

Question 39

Advantages of flow production

Answer 39

- EOS | - Low labour costs

Question 40

Disadvantages of flow

Answer 40

- Boring | - Technology problems haunt production

Question 41

What is specialisation

Answer 41

Where a firm, employee or country focuses on production of a particular product or small range of products

Question 42

What is meant by division of labour

Answer 42

Splitting up the production process into individual parts, allowing specialisation in each

Question 43

Advantages of specialisation and division of labour

Answer 43

- Efficiency | - No time wasted on production process

Question 44

Disadvantages of specialisation and division of labour

Answer 44

- Boredom | - Hard to replace /train staff

Question 45

What is cell production

Answer 45

Where a production line is split into a number of self-contained units

Question 46

What is meant by customer service

Answer 46

The interaction between customer and business