Production, Finance And External Environment Flashcards Preview

business🔞 > Production, Finance And External Environment > Flashcards

Flashcards in Production, Finance And External Environment Deck (55):
1

What is mechanisation

When machinery is used but workers are still required to operate the machinery. E.g a driver is needed for a combine harvester

2

What is automation

When machinery is used and a computer controls its operation, e.g Amazon robots

3

2 advantages of automation

1. Less mistakes are made
2. Large amounts can be produced quicker so productivity increases

4

2 disadvantages of automation

1. Buying and maintaining machinery is expensive
2. The system could break down

5

Advantages of job production

1. More motivated, not doing repetitive tasks
2. Better quality
3. Meets customer needs

6

Disadvantages of job production

1. The cost of production is normally higher
2. Labour costs increase because of skill required

7

What is batch production

When there are set stages that the production needs to go through. One process has to be completed before the next can begin.

8

What is flow production (mass production)

A continuous movement of items through the production process. This means that when one task is completed the next tasks immediately begins

9

What is added value

The increased worth a business creates for a product (branding, design, quality)

10

3 ways of increasing efficiency in a business

1. Technology
2. Just in time
3. Total Quality Management

11

Why might a business need to raise money

1. Start up business
2. Invest in growth (new product)
3. Buy new equipment
4. Solve cash flow problems
5. Move location

12

Price elasticity of demand:

What might affect the sensitivity of a chance in price of a product?

- If it's luxury
- Are there cheaper alternatives
- Competitor price

13

Define break even

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

14

Break even advantages

Can set business targets
Useful for getting a bank loan
Can help when choosing whether to increase prices and reduce costs

15

Break even disadvantages

Forecast figures may be different to actual
Figures tend to relate to one product
Break even assumes all output it sold

16

Advantages of high unemployment rate

More available workers
Business can employ workers cheaply

17

Disadvantages of high unemployment rate

Workers are demotivated by a threat of job loss
People have less disposable income

18

What are the 3 ways a business is
affected by interest rates

1. The cost to business of borrowing
2. The cost to customer on mortgage etc
3. The reward for saving

19

What are the impacts of poor profitability?

1. Staff fear losing jobs
2. Shareholders reduced dividends
3. Management reduced bonuses
4. Share price falls and business is at risk of takeover
5. The business has a lack of profit to reinvest

20

What are advantages of being in the EU?

1. Access to single market
2. More potential employees
3. Increases Market size
4. Common standards
5. Grants

21

What are the disadvantages of being in the EU?

1. Environmental standards
2. Minimum wage laws

22

What is the definition of globalisation?

The process by which business activities in different countries are becoming more connected to each other

23

Why might China not benefit from GG toys locating a factory there?

1. Exploitation of workers
2: pollution
3. Local culture

24

What is inflation?

When prices of goods and services are generally rising

25

Why does inflation occur?

1. When expenses increase business put prices up
2. If there is increased demand businesses can charge more

26

How can the Bank of England control inflation?

By reducing interest rates to reduce disposable income thus reducing demand for goods thus prices fall

27

What is income tax?

A tax on income where the money goes from the earnings straight to the central government

28

What is national insurance tax?

A tax deducted to support the NHS and state pensions. Government will collect more of this tax as employment increases

29

What is corporation tax?

A tax limited companies pay. The government will collect more tax from GG toys if they make higher profits

30

What are business rates?

A tax paid by business on the property that they use. Bowton council would collect this money

31

What is council tax?

A tax paid by homeowners on the property that they live on

32

What is VAT?

A tax on spending, most goods have a 20% vat charge

33

What is a monopoly market?

A market dominated by one seller

34

What is perfect competition?

A market in which there are a large number of sellers

35

What are the features of a monopoly market?

One seller
Low choice of products
High prices

36

What are the features of a competitive market?

Lots of sellers
High choice of products
Lower prices

37

How can GG Toys be better than rivals?

Improve quality
Range of products
Lower prices
Fast delivery
E commerce
Improved customer service
Branding
Unique selling point

38

What are the pressures of operating in a highly competitive market?

Making prices not too high or low
Match delivery (Amazon same day)
Pressure on revenue and profits
Pressure to be more efficient in order to be able to reduce prices

39

When does a monopoly market exist, by law?

When a business has a market share of at least 25%

40

How does business activity impact upon the environment?

Air pollution
Using non renewable energy
Congestion
Noise pollution
Waste disposal

41

What are negative externalities/external costs?

When business activity creates negative impacts to a third party

42

How could GG Toys behave more sustainably?

Use recycled materials for products/packaging
Move production back to Bowton instead of China
Reduce amount of packaging used
Use renewable energy to power factory

43

What are ethical issues related to GG Toys?

Unsafe working conditions
Unsafe overtime
Poor health and safety
Low/unfair wages
Child labour
Pollution

44

What is meant by ethical behaviour?

What is morally right and morally wrong

45

What are the advantages of operating as an ethical business?

Better reputation
USP
More customers as a result

46

What is a disadvantage of operating as an ethical business?

More expensive

47

What are unit costs?

Average costs
(total costs/amount sold)

48

What is purchasing economies of scale?

A business is given a discount for buying in large quantities

49

What are financial economies of scale?

Bigger firms are likely to get cheaper loans (interest) because they have more security (assets) to offer the bank

50

What are managerial economies of scale?

Employing specialist managers to increase efficiency (productivity) that means costs are reduced

51

What are marketing economies of scale?

Larger firms can benefit from being able to use more effective methods of marketing which reach more people (Chanel)

52

What are technical economies of scale?

As a firm gets bigger, it can use better methods and equipment. For example, a distribution business can use a bigger lorry which would still only need one driver

53

What are risk bearing economies of scale?

Large firms (Virgin) can spread risk by diversifying into different products or taking over suppliers

54

What are diseconomies of scale?

When unit costs rise with production increase

55

Why would diseconomies of scale occur?

Firms become too big to be managed efficiently