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Flashcards in Key words & definitions Deck (76):
1

Mechanisation

machinery is used but labour is still required

2

Automation

machinery is used and a computer controls it

3

Lean production

A Japanese production system which ensures that waste is kept to a minimum

4

Just in time (JIT)

Stocks of materials are not stored and are used immediately

5

job production

Involved producing each product individually

6

Batch production

used when there are set stages that the production needs to go through. One stage has to be finished before the next stage of production can begin

7

Flow production (mass production)

continuous movement of items through production. When one task finishes, the next task starts immediatley

8

Division of labour

organisation of production into a number of specialised , simple repetitive processes

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specialisation

workers specialise in carrying out simple production tasks

10

Process production

involves a series of automated processes that are applied to a variety of raw materials. Resulting in a large quantity of products

11

added value

increase the worth that a business makes for a product. It's the difference between what it costs to produce and the price charged to customers

12

Efficiency

achieving maximum productivity with minimum wasted effort or expense

13

Total quality management (TQM)

Process where all workers are responsible for quality throughout the process

14

Opportunity cost

the costs of missing out on something else

15

internal finance

finance comes from within the business

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External finance

finance comes from outside of the business

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Variable costs

costs which change when the output of a business changes

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fixed costs

costs which remain the same- regardless of output

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total costs

total costs made by the business

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average costs

cost for each unit that a business sells

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Revenue (turnover)

money a business receives for selling it's goods/ services

22

Break even

the point at which the sales are exactly the same as the costs

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margin of safety

the difference between the actual level of output and the break even output

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semi- variable cost

a cost which has both fixed and variable qualities

25

cash flow

movement of money in and out of a business account

26

inflows (income)

money received by a business

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outflows (expenditure)

money paid out of a business

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Net cash flow

difference between inflows and outflows

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Positive net cash flow

inflows are greater than outflows

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Negative net cash flow

inflows are not enough to cover outflows

31

Opening/ closing balance

amount of money in a business account at any particular time

32

cash flow forecast

prediction at the start of the year

33

cash flow statement

what actually happened

34

gross profit

amount of profit made by a business by selling goods or services, without paying any of the day-to-day running of the business

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net profit

profit made as a result of buying and selling goods; makes an allowance for the costs of running the business

36

accounting

the process of keeping financial records

37

expenses

costs of running a business that occur as part of a company's operated activities during a specific accounting period

38

Profit margins

ratio of profit over revenue; expressed as a percentage. Mainly an indication of the ability of a company to control costs

39

exchange rates

value of currency in terms of another

40

strengthening exchange rates

if the pound increases, the value is said to strengthen. the pound will buy MORE of a foreign currency

41

weakening exchange rates

if the pound is decrease in value, it is said to have weakened. the pound will buy LESS of a foreign currency

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imports

goods and service bought from other countries; MONEY GOING OUT OF THE UK

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exports

goods and services which are sold to other countries; payments/ money INTO THE UK

44

Interest rate

cost of borrowing

45

The European Union

a political and economic union of 28 members/ states that are located in Europe

46

Eurozone

group of countries in the EU that share the same currency

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Single market

Based on the 'four freedoms': free movement of people, goods, services and capital

48

tariffs

A tax paid on IMPORTS

49

Quotas

limit on the total quantity of products that can be supplied to the market

50

Globalisation

the process by which business activities in different countries are becoming more and more connected

51

international trade

companies in one country produce goods and services and sell them in other countries

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production abroad

firms may decide to set up their own factories and offices abroad

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exploitation of workers

employees may be paid very low wages and have to work long hours in dangerous conditions

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pollution

developing countries offer suffer from negative impacts of lots of production

55

Culture

local culture is being affected by global branding

56

inflation

Prices of goods are GENERALLY rising

57

Income tax

tax on a person's income.
Sole traders and partnerships pay income tax

58

national insurance

dedicated to support the NHS and sate partnerships
paid by sole traders and partnerships

59

corporation tax

paid my limited companies

60

business rates

payed by businesses on the property owned

61

council tax

payed by home owners/ tenants on the property they live in

62

VAT (value added tax)

tax on spending; currently charged at 20%.
VAT is on most goods and services that we buy

63

monopoly

a market dominated by one seller
exists when a business has a market share of at least 25%

64

Perfect competition

a market where there are a large number of sellers

65

external costs

negative externalities
costs of a third party

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private costs

costs to a customer/ business as a result of business production

67

social cost

total external costs
costs to anyone in society

68

ethics

what is considered morally right and morally wrong

69

purchasing economies of scale

a business is given a discount for buying in large quantaties

70

economies of scale

unit costs fall as output increases

71

financial economies of scale

as a firm gets bigger, it will gain more assets
Bigger firms are more likely to get cheaper loans (low interest rates) as they have more security to offer the bank

72

managerial economies of scale

large businesses can afford to employ specialist managers who will increase efficiency

73

Marketing economies of scale

larger firms can benefit from being able to use more effective methods of marketing, which reach more people

74

technical economies of scale

as a firm gets bigger, it can use better methods and equipment

75

risk bearing economies of scale

large firms can spread risk by diversifying into different products or taking over supplies

76

Dis-economies of scale

unit costs do not always fall as the scale of production is increased.
if they rise, a firm is said to experience dis- economies of scale.
This usually occurs because the firm becomes too big to be managed efficiently.