AQA A Level Business Studies - Unit 4 - Key Terms

AQA A Level Business Studies - Unit 4

Key Terms

Operations management - describes the activities and responsibilities of the managing of production and delivery of products and services.

Enterprise - It is about taking risks, being creative and innovative and using your initiative.

Productivity - Measures how a firm turns inputs into outputs.

Technical economies - Modern equipment can be installed to improve efficiency - by lowering unit costs 7 improving quality and reliability, mass production techniques, highly trained technicians, large scales transportation.

Financial economies - Because they are considered safer, larger firms often get LOANS easier and a lower interest rate. They find it easier to access funds through other sources.

Managerial and administrative economies - Large firms can employ the best mangers and adopt more cost-effective administrative procedures which help to reduce overhead costs and thus improve competitiveness.

Co-ordination diseconomies - With a business increasing in size, geographically in particular, there could be a loss of control of management - reduce speed of response and discourage employees.

Motivation diseconomies - Difficult to assess and meet customer needs of many - may demotivate employees. Large firms may face a lack of time for this.

Technical diseconomies - Production a very large scale is difficult to organise - machines and equipment cannot become more efficient, especially with limited factors of production - assets depreciate overtime.

Excessive bureaucracy - As organisations grow, the no. of level of management increases and this may slow down decision making.

Less flexibility - As firms grow they may fail to meet the changing needs of their customers.

Communication - ICT (technology) - Transforms business activities with the use of software packages, internet, automatic money transfer, barcodes and email.

Inventory control - Management of levels of stock in order to reduce storage costs while still meeting the customer needs.

Re-order quantity - the actual no. of products purchased from the supplier in a particular order.

Inventory wastage - A measure of the loss of inventory within a business.

Quota - A restriction on the volume or quantity of a goof that can enter or be sold in a market (form of trade barrier).

Scale - the size or output of a business, best measured relative to that of direct competitors.

Critical path analysis (CPA) - Project management too that uses network analysis to help manage complex and time-sensitive operations.

Supply chain - A series of activities involved in taking the initial resources to providing the final product.

Capacity - The maximum output that business can produce in a given period with the available resources. Capacity is a current level of output with its current resources.

Mass marketing - where a business sells into the largest part of the market, where there are many similar products on offer.

Operational targets - Cost & Volume, Quality, Efficiency and flexibility, Environment.

Speed of Response (objective) - The time taken for a customer requirement to be fulfilled. e.g: when ordering a good.

Flexibility (objective) - The ability of an…