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Business Studies IGCSEPDF 20
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● Purchasing economies:
Discounts gained by buying inputs in bulk.
● Marketing economies:
Spreading the cost of advertising and promotion over more units.
● Financial economies:
Gaining easier access to loans and lower interest rates because of large size.
● Managerial economies:
Employing specialist managers increases efficiency.
● Technical economies:
Using more advanced, large-scale machinery reduces average costs.
● Break-even:
The level of output where total revenue equals total costs.
● Break-even point (units formula): Break-Even Point (Units) = Fixed Costs /
(Selling Price Per Unit – Variable Cost Per Unit)
● Margin of safety:
The difference between actual output and the break-even level of output.
● Quality:
Meeting or exceeding customer expectations for a product or service.
● Quality control:
Checking finished products to ensure they meet the required standard.
● Quality assurance:
Ensuring quality at every stage of production to prevent defects rather than
detect them later.
● Total Quality Management (TQM):
A system where all employees are responsible for maintaining and improving
quality throughout the business.
Inventory (stock):
●
The raw materials, components, and finished goods a business holds.
● Inventory control:
Managing stock levels to ensure production runs smoothly without holding too
much or too little.
● Buffer inventory:
Extra inventory kept to deal with unexpected demand or supply delays.
● Lead time:
The time taken between ordering materials and receiving them.
● Supply chain:
The network of organisations and activities involved in producing and delivering
a product to the final customer.