The transformation process and adding value

My notes on adding value & the transformation process

BUSS1 exam revision

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Resources/Inputs = The elements that go into producing the good/service
Factors of Production = Turning inputs into outputs
Production = Where factors of production are turned into a form which satisfies customers
There are 4 factors of production:
Capital
Enterprise
Land
Labour
Output is known as production
It is important to know that customers could instead be to a business (B2B) and also that
production could be providing a service ­ not just physical goods.
The transformation process:
INPUTS THE TRANSFORMATION PROCESS OUTPUTS
FEEDBACK
There are 2 types of primary research:
Qualitative
Quantitative
The purpose of a business is to produce goods or services. In order to achieve this a business
must acquire inputs, convert them into outputs and ensure that they reach the customer in a high
quality state.
Outputs:
Natural resources
Semi finishes/ finished goods
Services
Primary extracting
Secondary Manufacturing
Tertiary service

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Adding value
Value added = Sales revenue ­ Cost of materials
Adding value = The process of increasing the worth of resources by modifying them
Added value is the value of the process of the transformation of inputs into outputs. It is
measured by the difference in value between the cost of the raw materials and the price of the
finished product.…read more

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