Business 2.2

• What is the function of business operations?

  Organizes, produces, and delivers goods
• What types of products can businesses produce?

  Tangible goods and intangible services
• What is the process of transforming raw materials into finished goods called?

  Production
• What is an example of a tangible product?

  Cars
• What is an example of an intangible service?

  Banking
• What are fixed costs in production?

  Costs that remain constant regardless of output
• What is economies of scale?

  Lower cost per item with increased production
• Why do companies gain economies of scale when buying in bulk?

  Reduced managerial costs and packaging
• What are the three main production methods?

  • Job production
  • Batch production
  • Flow production
• What is job production?

  Unique, bespoke products tailored to customers
• What are the advantages of job production?

  Low setup cost and high quality
• What are the disadvantages of job production?

  Difficult to achieve economies of scale
• What is batch production?

  Production of goods in groups or batches
• What is a disadvantage of batch production?

  Decreased productivity when switching batches
• What is flow production?

  High volume, low margin production process
• What are the advantages of flow production?

  Efficient process and low cost per unit
• What is a disadvantage of flow production?

  High initial costs for machinery and training
• How is productivity defined?

  Output per worker over a period
• What impact does technology have on production?

  Increases productivity and reduces costs
• What is specialization in production?

  Division of labor where tasks are allocated
• What are the advantages of specialization?

  Increased productivity and lower unit costs
• What are the disadvantages of specialization?

  Boredom and risk of job loss due to automation
• How does technology influence unit costs?

  Increases production and spreads fixed costs
• What is buffer stock?

  Stock held to cope with unforeseen circumstances
• What is a bargate stock graph?

  A tool to control and monitor stock flow
• What does the reorder level indicate?

  Stock level that triggers a new order
• What is lead time in stock control?

  Time between placing an order and delivery
• What is the purpose of stock control methods?

  To manage inventory levels effectively
• What is the impact of technology on production quality?

  Increases consistency and reduces human error
• What is the significance of buffer stock levels?

  Helps manage unexpected demand or supply issues
• What is the relationship between productivity and workforce efficiency?

  Higher productivity indicates better workforce efficiency
• How does technology improve flexibility in production?

  Allows for different products on the same machinery
• What is the role of technology in balancing production costs?

  Reduces costs in the long run despite initial expenses
• What is the impact of technology on production flexibility?

  Enables production of a range of products
• What is the significance of economies of scale in production?

  Lower costs per unit with increased production
• What is the purpose of a practice question in the video?

  To test understanding of technology's impact
• What does the buffer stock level indicate?

  Stock held to manage unexpected demand
• What is the relationship between lead time and reorder level?

  Lead time is measured from reorder to minimum stock
• What is the significance of stock control methods?

  To effectively manage inventory and reduce costs
• What does a bargate stock graph help businesses do?

  Control and monitor stock flow