Unit 5 - Business operations

Question 1

Economies of scale

Answer 1

Financial advantages (falling average costs) of producing something in very large quantities.

Question 2

Internal economies of scale

Question 3

External economies of scale

Question 4

Types of economies of scale (6)

Answer 4

Technical economies
Managerial economies
Financial economies
Risk-bearing economies
Purchasing economies
Marketing economies

Question 5

Diseconomies of scale

Answer 5

Rising average costs when a firm becomes too big.

Question 6

Types of diseconomies of scale (4)

Answer 6

Bureaucracy
Poor communication
Lack of control
Levels of hierarchy

Question 7

Increased bureaucracy

Question 8

Poor communication

Question 9

Lack of control

Question 10

Levels of hierarchy

Question 11

Technical economies

Question 12

Managerial economies

Question 13

Financial economies

Question 14

Risk-bearing economies

Question 15

Purchasing economies

Question 16

Marketing economies

Question 17

Obsolete

Question 18

Production

Answer 18

The effective management of resources in producing goods/services.

Question 19

Types of production

Answer 19

Job production
Batch production
Flow production

Question 20

Job production

Answer 20

Products made to meet the specific requirements of individual customers.

Question 21

Batch production

Answer 21

Products produced in groups or batches.

Question 22

Flow production

Answer 22

Standardised products produced in a continuous sequence of operations on a production line.

Question 23

Labour productivity

Question 24

Labour-intensive production

Answer 24

Predominantly uses physical labour in the production of goods/services.

Question 25

Capital-intensive production

Answer 25

Predominantly uses machinery and technology in the production of goods/services.

Question 26

Factors of production

Answer 26

The resources people use to produce goods and services; they are the building blocks of the economy.

Question 27

Name the factors of production (4)

Answer 27

Capital Enterprise Land Labour (or CELL)

Question 28

Capital (FOP)

Answer 28

Any man-made resource that is used to produce goods/services

Question 29

Enterprise (FOP)

Question 30

Land (FOP)

Question 31

Labour (FOP)

Question 32

Kaizen

Answer 32

Japanese term that means continuous improvement.

Question 33

TQM (Total Quality Management)