What are the factor's of production?
INPUTS - Land (premises/ raw materials), Labour (workforce), Captial (money/machinery), Enterprise (owners)
PROCESSES - ie. cleaning/decorating
OUTPUT - Cosumer non-durable (something you used once ie. food.), Consumer Durable (used more than once ie. clothes), Industrial (bought by businesses ie. machines), Services (items non tangible ie. banking)
What to businesses need to survive?
How do businesses help the economy?
- They give the government revenue tax.
- They buy goods off other companies.
- Allow money to move around the stock market.
- Provide jobs to people.
What are the four main departments of business?
- Production (the making of the product)
- Finance (controlling what money moves in and out of the company)
- Human resources (employment)
- Marketing (selling the goods)
What is "Adding Value" and how can businesses do this?
Adding Value - A process whereby the value placed on the product is higher than the material or bought in costs.
Businesses can add value by...
Desgin, Production, Marketing, Customer Services
What is a stakeholder and why are they important?
A stakeholder is defined as "an individual or a group of people which has an effect on and is affected by the organisation".
For example, employees, pressure groups, government, public, managers, shareholders, competition.
They are important as they can add value to a business.
What is oppertunity cost and what is the figure usually put on it?
Opertunity cost is the cost of missing out on the next best oportunity when making a decision.
The usual way to work this out is using the interest rate. I.E. the cost of missing out on the interest avaiable from money held in a deposit account. EVERY business decision has a cost (in money, time or other resources) and must be weighed up with care.