Theme 2&3

Sales revenue and forecasting:

Sales revenue is income generated from sales. (Selling price x Quantity sold)

Sales forecast is an estimation of future sales may be based on previous sales figures, market surveys and trends. Actual and forecast figure difference known as variance. Useful can determine budgets, staffing and production levels.. However just an ESTIMATION.

Diseconomies of scale:

As business grows, may expand the scale of production beyond minimum efficient scale. Average costs increase as production increases. No guarantee unit costs will fall as scale of business operations rises-

> control - problems in monitoring productivity and work quality, increasing wastage.

> cooperation- may develop sense of alienation and loss of morale.

Takeovers:

Acquiring company tries taking control of a target company often by purchasing majority stake.

Quality management:

TQM , where all employees involved in quality control. Reduces costly wastage reinforces employee motivation. Competitive advantage, enhances customer loyalty and attracts new ones, enhances reputation, reduces costs.

Continuous improvement (Kaizen) - Japanese word. Kai = change Zen = good.

Stock management:

Process of making sure optimum level of stock is held so demand can be kept while keeping costs to a minimum.

Implications of poor stock control -

Too much stock - increased costs in storing and handling stock cash can be used elsewhere.

Too little stock - may run out, halt production. May lose customers as a result in long term.

Balance is essential.

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