Paper 2 Flashcards
1
Q
Types of technology used in production
A
Robotics
Automation
Computers
2
Q
What is automation
A
Production process using machinery that is controlled by a computer rather than a person
3
Q
Robotics
A
The use of robots
4
Q
Types if production
A
Batch
Job
Flow
5
Q
What is job production
A
Products made individually
6
Q
Advantages of job production
A
- more likely to be high quality
- can be designed to meet Individual needs of the customer
- can often charge a high price and make a good profit
7
Q
What is batch production
A
Where one type of product is made then switched to make a different product
8
Q
What is flow production
A
One making of a product continuously using an assembly line. Sometimes called as mass production
9
Q
Advantages of batch production
A
- save costs if use machinery
- needs of different customers can be met
- larger quantities
- staff costs lower to than in job production as employees don’t need to be as skilled
10
Q
Advantages of flow production
A
- larger quantities
- use of machinery can reduce costs
- use of computer controlled machinery allows some variation in products
- less labour than others
- workers can specialise and become more efficient
- production lines can operate 24/7 if necessary
- consistent, quick , standard
11
Q
Disadvantages of flow production
A
Workers are demotivated due to repetitive tasks
- no unique selling point products are the same or similar
- inflexible can’t change breakdowns waste time
- products are similar to rivals
12
Q
Disadvantages of job production
A
- high costs
- high skilled workers
- workers need pay and break
- time consuming
13
Q
Disadvantages of batch production
A
- takes time to switch batches
- usually ends in build up of ‘work in process’
- tasks makes become repetitive resulting in poor motivation levels
14
Q
Benefits of providing quality goods and services
A
Waste is reduced
Business gain/maintain a good reputation
15
Q
Methods to ensure quality
A
- quality control
- quality assurance
16
Q
Advantages of quality control
A
Stops poor quality goods and services being sold
Production can continue while being inspected
Improve reputation
17
Q
Disadvantages of quality control
A
Does not prevent waste
Inspection can be costly (unless done by machinery)
Doesn’t encourage workers to be responsible for quality
18
Q
Quality control
A
Physical inspection by an inspector or by machine to check quality
19
Q
Quality assurance
A
Involves the whole business focusing on quality with the aim of preventing quality problems
20
Q
What is e-commerce
A
The bringing together of buying and selling electronically
21
Q
Advantages of face to face selling
A
- can increase sales
- useful where customers like advice and personal service from assistants
- can help sales in business to business selling
- unavoidable for some services
- Customer can bargain with the seller over the price or the services
22
Q
Telesales advantages
A
- Can increase sales as customers can ask questions about products and bargain about the price
- may cost less than selling from a shop
23
Q
Face to face selling disadvantages
A
- may not always be convenient for customers
- if the customer bargains with the seller for a better deal profits may therefore be reduced
- retailer costs are high if expensive shops are needed
24
Q
Telesales disadvantage
A
- Costs involved such as a warehouse to store goods and payments to telesales workers
- sellers may cold call which can be a nuisance to customers
25
Advantages of tech and machinery
Saves money long term
Higher quality
Less mistakes reduce waste
Productivity increases - works 24/7
Reduce number of accidents
26
Robotics advantages
Large amounts produced
Dangerous jobs done by robots
High quality
27
Disadvantages of robotic
- Breaks down problematic -> results in production time lost
- expensive
- need ‘downtime’ or time for servicing
28
How to judge quality of good/Services
Design -> looks style features
Function -> it can be used easily
Reliability -> acceptable level of breakdown of failure
Consistency -> products meet same quality standards everytime
Durable -> lasts as long as it should
Service -> staff attitude
Price/value -> price reflects quality
29
Consequences of poor quality
- financial = cost for replacement
- loss of reputation
- loss of customers
- legal action
30
How to measure quality
- amount of faulty products
- customer satisfaction rates
- product inspections
- customer loyalty
- customer complaints and reviews
- levels of product returns
- mystery shoppers
31
What are mystery shoppers
A customer going undercover to follow ceo orders and report back
32
Quality assurance advantages
- there may be less wastage
- workers may feel valued because they have been given more responsibility
- the business may benefit from an improved reputation for quality
33
What is e-commerce
The bring together of buying and selling electronically
34
Advantages of e-commerce (business)
- sell 24/7
- cost of selling Lower as don’t have to pay for workers or rent
- web designers can make more attractive
- can sell around the world, online market increased
35
Disadvantage of e-commerce (business)
- competition increased , abroad
- delivery system need to be organised
- need to provide cyber security for them and customers
- as technology evolves the business must which can be costly
36
Advantages of e-commerce (customers)
- Customers can buy 24/7
- choice increased as customers can buy globally
- easier to compare prices and find deals
37
Disadvantages of e-commerce (customers)
- Impersonal, customers may not be able to ask questions (unless chat provided)
- may not be what the description says
- customers at risk of personal data as system may not be secure
- not everyone has access to technology
38
Advantages to product knowledge
It increases sales as customers are given information that helps and make a good decision
39
Disadvantages of product knowledge
Costs in training staff
40
Disadvantage to customer engagement
Training costs
41
Customer engagement advantages
It increases sales as customers feel comfortable with the buying experience
42
Advantages of customer service
Increases sales by making customers feel confident about the seller and what they are buying
It encourages customers to return in the future
43
Disadvantages of customer service
Costs to train workers to deal with customers and provide refunds
44
Advantages of share issue
• New investors can contribute a lot of money to the business.
• No need to repay.
• No interest to pay
45
Disadvantages to share issue
• The existing owners will have to give the new shareholders a say in the running of the business and a share of the profits.
• Shares can only be sold by limited companies, not by sole traders and partnerships.
46
Advantages to crowdfunding
- New supporters can contribute a lot of money to the business
through loans, donations or investing as part-owners.
• No need to repay.
• No interest to pay.
47
Disadvantages of crowdfunding
• Interest will be paid if the money is raised through a loan.
- ownership will be shared if the money is raised through investment.
48
Owners capital advantages
• No need to repay.
• No interest to pay.
• Does not affect ownership and control
49
Owners capital disadvantage
• Owner risks savings.
• Owner may not have (enough) savings.
50
What is owners capital
the owners' savings are invested.
51
Crowdfunding
money is donated or invested by sponsors or people invest to become part-owners of the business.
52
Shares issue
- new shares are sold to raise more money.
53
Retained profit
money not distributed to the owners (Shareholders) as profit.
54
Retained profit advantage
- No need to repay.
• No interest to pay.
55
Retained profit disadvantage
- Business may not have made profits.
• Owners will not get profit as income
56
Sale of assets
goods, etc., owned by the business are sold to raise money.
57
Retained profit advantage
- No need to repay.
• No interest to pay.
• Good if selling off old equipment or stock.
58
Retained profit disadvantage
- May be difficult to sell.
• May take time to sell.
59
Overdraft
a bank makes available to a business more money than it has in its account.
60
Overdraft advantage
- Meets short-term cash flow problem.
• Interest is only paid on the amount owed.
• Repayment is only due when the business
closes or the overdraft is no longer needed.
61
Overdraft disadvantage
Interest is charged for each day money is owed, which can be expensive.
62
Trade credit
a business sells goods after agreeing to pay for them at a later date.
63
Trade credit advantage
- The business can have goods to sell before paying for them, via a credit period (usually 30 days but can be up to 90 days).
• No interest if repaid within agreed time limit.
• Can help with a cash flow problem.
64
Trade credit disadvantage
• Goods must be paid for even if they do not sell.
• Interest is charged if payment is late.
65
Taking on a new partner advantage
• The new partner may bring new skills.
• No need to repay.
• No interest to pay.
66
Taking on a partner disadvantage
- The existing owners will have to give the new partner a say in the running of the business and a share of the profits.
- Partnerships can take on new partners. Sole traders can also do so but must then become partnerships.
67
Loan
a set amount of money, borrowed for a set period of time.
68
Loan advantage
- Repayment is made in fixed sums over a period of time and usually paid monthly.
• The money is available immediately the loan is agreed with the lender (for example, a bank).
69
Loan disadvantage
- interest must be paid.
• The business may need to give the lender security.
70
Variable costs
Costs that change as output changes, for example, wage and material costs will increase if more products are made or sold.
71
Variable costs
Costs that change as output changes, for example, wage and material costs will increase if more products are made or sold.
72
Fixed costs
Cost which does not vary with the level of output/sales/business activity
73
Break even forecast
Can be used to plan how much to produce or how much to charge
74
Ethnic considerations in business
How to treat :
workers
suppliers
treatment of customers
marketing decisions
source of materials
75
Ethnic considerations in business
How to treat :
workers suppliers treatment of customers
marketing decisions
source of materials
76
Advantages of being environmentally friendly
Costs may be lower because a business may have taken steps to use less energy or create less waste, reducing energy bills and waste disposal costs.
Sales may be higher because customers may prefer to buy from a business that cares about the environment.
Lower taxes and avoidance of paying fines may occur because the business creates less pollution.
A business may gain subsidies from the government to help pay for environmentally-friendly production.
Profits may be higher because sales revenue rises and costs fall.
77
Disadvantages of being environmentally friendly
Production costs may be higher if materials produced in an environmentally-friendly way are more expensive.
Sales may be lower if the business charges higher prices to cover any extra costs of environmentally-friendly production.
Capital costs may rise if the business invests in new machines and plant to produce in an environmentally-friendly way.
78
Reasons why quality is important
• To maintain reputation
• Sell more (application)
• reduce recalls
• reduce production errors
• to make profit
• to meet needs of the market e.g luxury/ executive
79
Advantages of automation
Increase output
Consistent quality of output
Increased flexibility
Less reliant on labour
Lower labour costs
Continuous operation possible
80
Impacts of globalisation
•larger market size
• increased competition
• increased international trade/movement of goods and services
• the greater movement of people and capital
• more businesses operating in more than one country
• interdependence of businesses in different countries
• globalisation of brands
• greater dependence on external/global factors
• spread risk
81
Things to consider when choosing a location for its business
Costs of a site
Proximity to customers
Where the owner lives
proximity to staff
amount of competition
82
Advantages of locating abroad
• Lower production costs, or a ampie, because labour, land, property and cheaper in some countries
• expert/skilled workers may be in plentful suply in some countries but
not in the country where the business currently produces.
• The business can be loce the business market (ts customers).
83
Disadvantages of locating abroad
• Quality control may be difficult as managers in the headquarters may not be able to check work easily.
• Transport costs may be higher if the goods are not sold where they are produced.
• Sales may be lost if customers do not like goods being made abroad (e.g. they prefer 'made in Britain').
• Skilled labour is not always available.
• Productivity may be low if workers are unskilled, leading to a rise in production costs.
84
Ethics
• do not use supplier who use child labour
• avoid fabrics which have involved animal testing
• ensure supplier pay a fair wage
• ensure supplier do not use 0 hour contracts
• ensure supplier offer good working conditions
• pay suppliers a reasonable price
• insist on suppliers using recycled packaging materials
• encourage supplier to produce clothing made of recyclable materials
• buy from local suppliers/minimise air miles
• investigate suppliers ethical credentials
• do spot checks on suppliers process
• have a clear ethical supply chain policy
85
Environmental consideration for a business
Water disposal
Pollution
Climate change
Sustainability
