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| Question | Answer |
| Name the 3 methods of production. | Batch production Job production Flow production |
| What is job production? | It is making one thing at a time and is used for individual, unique products. Once work on one product is finished, production of another begins. An example of this are ships, bridges and wedding cakes. |
| What is flow production? | It is producing as many as possible of one identical product and is used for mass market products. It is also usually highly automated and production is continuous with no stoppages. Examples of this is fizzy drinks, mobile phones and televisions. |
| What is batch production? | It is a combination of job and flow production. The businesses make a limited number of one identical product, then stop, reorganises and start making a batch of another product. Examples of this are houses, bread and milk. |
| What is process production? | Raw materials go through a large number of procedures before reaching the required end result. It is suitable when large quantities of identical end products are required. Often capital intensive loading to lower unit cost. Commonly used in large industries such as oil refining. |
| Define value added. | Businesses add value to a product to provide a competitive edge. This allows them to charge a higher price. Higher prices will allow for a bigger profit margin per unit sold. |
| A few key points about value added. | Aesthetics: physical appearance. Features: physical attributes Core Aspects: basic abilities Actual Aspects: added extras Augmented Aspects: support feature Performance: reliability/durability Intangible Aspects: non physical attributes |
| Define an internal source. | It saves a business from borrowing from a lender and have to pay back interest. Internal finance is quick and easy. |
| Define an external source. | They come from outside the business and are more difficult to arrange than an internal source. |
| Short term finance. | It is used for daily expenses. It is sourced from an over draft and is usually repaid in a year. |
| Medium term finance. | This is used to pay for repairs and small improvements. Sources include: loans, hire purchases, trade craft and debt factoring. It is usually paid back between 1 to 5 years. |
| Long term finance. | This is used to pay for major expenditure such as buying new premises. Sources include: issuing shares, mortgages, venture capital and government grants. It is paid back over many years. |
| What is a competitor? | Competitors are other businesses who operate in the same market, targeting the same potential customers. Competitors are fighting to maintain or gain market shares. They will respond to the actions of each other. |
| State 5 environmental factors. | Re-cycling Evolving Follow trends Business opportunities Cutting costs |
| The natural environment | The natural resources that firms exploit to produce goods and services. |
| The built environment | The man-made surroundings that provide the setting for the production of goods and services. |
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