business t1 key terms

key terms

production

the process of combining inputs together too turn them into product outputs

labour productivity

the number of units of output produced for every unit of labour input in aa given time period

inventory

the stock of raw materials, work-in-progress and finished goods held by a business

lean production

the production of goods and services while aiming to minimise the waste of resources

job production

the production of one-off items specific to customer requirements

batch production

where groups of identical products are made;each group passes through one stage of production before moving on to the next stage

flow production

the continuous production of large quantities of identical goods

fixed cost

costs that do not change with output

variable cost

cost that change in direct proportion too output

total variable cost

all of the variable costs of producing the total output

total cost

all the variable and fixed cost of producing the total output

total fixed cost

all of the fiixed cost of producing the total output

variable cost per unit

the variable cost of producing a single unit of output

average total cost

the total cost of producing a single unit of output

economies of scale

the reduction in average cost as the scale of output increases

diseconomies of scale

an increase in average cost as the scale output increases

break-even

the level of output where revenue equals total costs;the business is making neitherr profit not loss

margin of safety

the difference between the current level of output of a business and the break-even output

quality control

checking the quality of good through inspection at the end of the production process

quality assurance

where employees check the quality of products at each stage of the production process