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  • Created on: 23-05-11 18:35
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-*Business studies F292 SECTION A
Labour turnover
Movement of employees in or out of the business
Number of employees leaving a workforce
Number of employees employed
Disadvantages of high labour turnover
Have to recruit new workers so the process will be expensive and will have to pay additional
costs such as training e.g
Productivity will be lower
Still have to pay redundancies if the business is ever gets bankrupt or in debt
Lower quality
Damage to firms reputation
Advantages of labour turnover
could employ workers with better skills
Decisions are made more lower down the chain of command and therefore fewer decisions are
made by senior management
Elasticity of demand of income
Payback method
How quickly returns from investments cover the costs of investment
Advantages of payback
extremely simple
useful in rapidly changing technology changes
helps prevent cash flow problem
Disadvantages of payback
cash earned after payback is ignored
unsure if a profit has been made
if any projects were taken after the payback period
Current assets
Anything the firm owns or has title to
bank balances
marketable securities
Customer orientation
Putting customer's needs as the heart of the organisation so therefore producing what the customer
wants rather than the customers buying what the firm has produced

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Unit contribution
Total contribution = Total revenue ­ Total direct Cost
Just in time
It involves deliveries coming in just in time for when the business requires re stocking
Advantages of just in time
better cashflow because money is not tied up in stock
reduced waste and damage
more factory space available for other uses
improved relationship between suppliers
motivation improved- workers given more responsilbility
Disadvanatages of just in time
relying heavily on suppliers
loses advanates if buk buying
problems if breakdowns occur
do not…read more


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