commerce paper 1

themes 1 and 2 commercial operations and commercial risks

Mortgage

a long term loan secured with property

Insurance

Where a company provides a guarantee of a compensation for a specified loss suffered by a business or individual in return for the payment of a specified premium.

Production

A process which involves converting resources into goods or services.

Services

Where tasks are carried out, or facilities provided. Ex. hairdresser or transport.

Needs

basic requirement for human survival.

wants

peoples desires for goods and services.

Manufacturing

the use of resources such as raw materials, components, fuel, labour, and machinery to make physical goods.

mass produced

goods that are manufactured in very large quantities.

cansumers

people who buy goods and services for personal use.

consumer goods

goods purchased by people to help satisfy their needs and wants.

intermediate goods

goods produced for businesses, such as components.

capital goods

goods used to produce other goods such as tools, equipment, and machinery.

provision

when you provide something that somone needs now or in the future.d

direct services

services aimed directly at consumers such as hairdressing and healthcare.

comercial services

activities such as advertising, transport and communication, which assist trade to function.

distribution

the delivery of something to other people or places.

trade

the exchange of goods and services between owners for money

aids to trade

the services provided to traders such as finance, warehousing and transport.

commerce

activities that assist the exchange and distribution of goods and services

outlet

a point from which goods are sold or distributed.

enterprise

a business or company

indirect services

services provided by commercial enterprises to support businesses in the trading process.

advertising

communication between a business and its customers where images are shared in the media to encourage the purchase of products.

factors of production

the resources used to produce goods and services. they include land, labour, capital and enterprise.

workforce

al the employed people / all the people who work for a company

economy

the system that attempts to solve the basic economic problem, ex. divide scarce resources among competing needs and wants.

labour

the people used in production

working capital or circulating capital

resources used up in production such a raw materials and components

fixed capital

the stock of man made resources such as machines and tools used to help make goods and services.

entrepreneur

an individual who organises the other factors of production and risk their own money in a business venture

accrue

the accumulation of benefits usually money over time

venture

business activity, often with risks involved

split shifts

a working shift where employees are required to work two or more seperate time periods during the day

recruit

to hire somebody to work for a business

chain of production

the different stages of production needed to produce many products

Primary sector

production that involves extracting raw materials from the earth.

secondary sector

production that involves converting raw materials into semi finished or finished goods

tertiary sector

the production or services.

assembly plant

a factory where parts are out together to make a finished product

interdependence

where the actions of one country or firm have an impact on others

de industrialization

the decline in manufacturing

industrialization

growth in the manufacturing sector

specialization

the production of a limited range of gods by individuals, firms, regions, or countries

division of labour

the breaking down of the production process into small parts; each worker is given a specific task

productivity

the rate at which goods are produced, and the amount produced, especially in relation to the work and time and money needed to produce them.

output

The amount of something produced, especially by a person or a factory

hub

the most important place for a particular activity

call centre

a large office that deals with customer inquiries over the phone.

globlisation

the spread of trade technology information and jobs across national borders and cultures.

profitability

the ability to make a profit

intermediary

a business that acts as a link between buyers and sellers in the chain of distribution

distributor

an agent who supplies goods to retailers

requisition form

an internal document used in business to request the suppl y of something that is required by an employee or department

invoice

a business document which contains details such as the amount owed aboout the exchange of goods between the buyer and seller.

just in time

an approach to manufacturing that involves storing materials and components as little as possible.

tariifs

tax paid on goods that are imported

protectionism

an aproach used by governments to protect domestic producers.

exchange rate

the value of one currency in terms of another.

middleman

a person or business whic buys goods from producers and sells them on to retailers.

mark up

increasing the price of something to cover additional costs and to increase profitability.

lead time

the time between placing the order and recieving the delivery.

credit

the practice of buying now and paying later.

severance pay

money given to workers who leave their jobs before the end of their contracts.

transaction

the process of buying or selling somehting

transactional costs

financial costs that are incurred when buying or selling something for example taxes

value added tax - vat

a sales tax imposed in every step of production usually a percentage of the value added at each stage.

sales tax

a tax paid by customers when buying a goods or service, usually a percentage of the transaction

inventory

goods for resale

commission

money earned from the sale of something, often a percentage of the value of goods or services sold.

shrinkage costs

The loss of inventory due to factors such as employee theft, shoplifting, errors and damage to inventory.

stock take

making a detailed record of the total inventories held by a business at a particular point in time.

ecommerce

retail transactions conducted online

mcommerce

retail transactions conducted online through the use of a mobile phone.

public sector

government organisations that provide goods and services in the economy.

private sector

provision of goods and services by business which are owned by individuals or groups of individuals.

unincorporated businesses

those businesses where there is no legal difference between inthe owner and the business

incorporated business

where the business has a seperate legal identity from that of its owner/s.

limited company

a business organisation that has a separate legal identity from that of its owners.

sole trader

a business owned by a single person

capital

finance provided by the owners of a business

unlimited liability

where the owner is responsible for all business debts possibly beyond the amount invested.

cooperative

a private business that is operated by people who use its products or services.

annual general meetings (ATM)

an annual meeting for the busineses shareholders where teh board gives a presentation relatin to the stae and performance of the business.

dividend

the amount of money paid to shareholders from profits. shareholders are entitled to a certain amount per share in a year when dividend is paid.

partnerships

a business owned by 2 or more people usually up to 20.

deed of partnership

a legal documetn which states the official right sof partners.

limitedpartnership

a partnership where some partners contribute capital adn enjoy a share of the profit but do not take part in the running of th ebusiness.

limited liability

where a business owner is only responsible for the original amount invested in the business.

sleeping partner

a partner who contributes capital and takes a share in the business but plays no role i contributuing to the running of the business/

sue

to make a legal claim against someone especially for money becasue they have harmed you in some way.

issue (shares)

the sale of nechaw shares.

chairperson

someone who is i chagre or a meetin gor directs the work of an orgnisation of commiteel

registrar of companies

(uk) a body responsible for recording the details limited companies in the country

constituition

th e important rules whic state how a limited company should be structured adn governed

certificate of incorporation

a document needed before a new company can start trading.

stock market

a market for secondhand shares.

takeover

to take control of a company by buyuing most of its shares.

public limited company

a company that has sharesd available to th epublic to buy on the stock exchange.

institutional investor

a large company such as an insurance company that invests large amounts of moenny in shares and other financial instruments.