WJEC Eduqas A-Level Business — Component 1 Notes

A comprehensive set of practice questions covering operations management, human resources, finance, and working practices based on the WJEC Eduqas A-Level Business curriculum.

What is the definition of Added Value?

The increase in worth of a product/service as a result of activities/processes carried out by the business.

What is the formula for Added Value?

$$\text{Added Value} = \text{Selling Price} - \text{Cost of Raw Materials \& Components}$$

How does Added Value differ from Profit?

$\text{Profit} = \text{Added Value} - \text{all other costs}$ (including labour, rent, and overheads).

Which production process is best for luxury goods or bespoke furniture?

Job Production, which involves one-off or small batches made to unique customer requirements.

What are the characteristics of Batch Production?

Groups of identical items are made together; once a batch is finished, the setup is changed for the next batch.

What are the common pros and cons of Mass / Flow Production?

Pros: Very low unit cost and huge output. Cons: Inflexible, high setup cost, and can involve boring work for staff.

What is Cell Production?

A method where teams or 'cells' complete whole units or large parts, combining flow efficiency with team-working.

What is the formula for Capacity Utilisation (%)?

$$\text{Capacity Utilisation (\%)} = \frac{\text{Actual Output}}{\text{Maximum Possible Output}} \times 100$$

What is considered the ideal level for Capacity Utilisation?

$75\text{--}90\%$; this is balanced and efficient while leaving enough spare capacity for peaks or breakdowns.

What are two potential solutions for Under-utilisation ($<70\%$)?

Increasing sales, subcontracting work, renting out space, or reducing capacity.

How does Quality Control (QC) differ from Quality Assurance (QA)?

Quality Control is reactive and involves inspecting products after production to find defects. Quality Assurance is proactive, focusing on preventing errors by building quality into every stage of the process.

What is Total Quality Management (TQM)?

A culture where quality is everyone's job, focusing on continuous improvement (Kaizen), zero defects, and customer focus.

What is Lean Production?

A production approach aimed at eliminating all waste (time, materials, effort) while maintaining quality to achieve maximum efficiency and minimum cost.

What is Just-In-Time (JIT)?

A lean method where materials arrive exactly when needed, eliminating buffer stock and lowering storage costs.

Which lean method involves small, regular changes suggested by all staff?

Kaizen (Continuous Improvement).

What is the purpose of Economic Order Quantity (EOQ)?

To calculate the optimal order size that balances ordering costs (admin, delivery) against holding costs (insurance, deterioration) to achieve the lowest total cost.

What is the difference between Computer-Aided Design (CAD) and Computer-Aided Manufacture (CAM)?

CAD is used to design products on a screen, while CAM uses computers to control precise, high-speed production machinery.

What is the core purpose of Research \& Development (R\&D)?

Investigating, designing, and developing new products or processes to stay ahead of competitors and meet changing customer needs.

What UK law requires all employees to be treated fairly regardless of age, gender, or disability?

The Equality Act 2010.

What is Collective Bargaining?

The process where trade unions negotiate with employers collectively for better pay, hours, and working conditions.

What is the difference between a strike and a work-to-rule action?

A strike involves stopping work entirely, while work-to-rule involves following every rule so strictly that work is slowed down.

What is the formula for Labour Turnover (%)?

$$\text{Turnover (\%)} = \frac{\text{Staff Leaving}}{\text{Total Staff}} \times 100$$

What is the formula for Labour Productivity?

$$\text{Productivity} = \frac{\text{Total Output}}{\text{Number of Employees}}$$

What is a 360-Degree Appraisal?

A performance review that includes feedback from managers, peers, subordinates, and customers.

In organizational design, what is the 'Span of Control'?

The number of employees for whom one manager is directly responsible.

What is a Matrix Structure?

An organizational structure where teams are formed from different departments for specific projects, resulting in employees having two bosses (functional and project).

In recruitment, what is the difference between a Job Description and a Person Specification?

A Job Description breaks down the role's tasks and duties, whereas a Person Specification lists the skills, qualifications, and experience needed by the candidate.

What is the benefit of Multi-skilling staff?

It creates a flexible workforce that can perform more than one role, reducing downtime and making change easier to manage.

What are zero-hours contracts?

Employment contracts where the worker is available for work but the employer is not required to guarantee a fixed number of hours.

What is the formula for Gross Profit Margin (%)?

$$\text{Gross Profit Margin} = \frac{\text{Gross Profit}}{\text{Revenue}} \times 100$$

What is the formula for Net Profit?

$$\text{Net Profit} = \text{Gross Profit} - \text{Expenses (Overheads)}$$

What is the difference between opening and closing cash balances?

The opening balance is the cash at the start of a period; the closing balance is calculated as $\text{Opening Balance} + \text{Net Cash Flow}$.

What is the formula for the Break-Even Point in units?

$$\text{BEP} = \frac{\text{Fixed Costs}}{\text{Contribution per unit}}$$

How is 'Contribution per unit' calculated?

$$\text{Contribution per unit} = \text{Selling Price per unit} - \text{Variable Cost per unit}$$

What is the Margin of Safety formula?

$$\text{Margin of Safety (\%)} = \frac{\text{Actual Sales} - \text{BEP}}{\text{Actual Sales}} \times 100$$