buisnes exam

BUS 150 Study Guide

Chapter 1: Exploring the World of Business and Economics

1. Definition of Business:

   • An organized effort to produce and sell goods/services for profit to meet societal needs.

2. Competitive Advantage:

   • A unique benefit or advantage a business offers to attract customers.

3. Resources Available to a Business:

   • Human, financial, material, and informational resources​.

4. Three Types of Businesses:

1.                  Service Businesses: Provide services (e.g., haircuts, tax preparation).

2.                  Manufacturing Businesses: Create tangible goods (e.g., Intel chips).

3.                  Marketing Intermediaries: Buy and resell products (e.g., Office Depot).

5. Equation for Profit:

   • Profit = Revenue - Expenses

6. Areas of the Business Environment:

   • Economic, competitive, sociocultural, technological, and political/legal environments.

7. Definition of an Economy:

   • A system where wealth is created and distributed.

8. Factors of Production:

   • Land/natural resources, labor, capital, entrepreneurship.

9. Definition of Entrepreneur:

   • A person who risks resources to start and operate a business.

10. Economic Indicators:

    • Examples: GDP, inflation, unemployment rate, Consumer Price Index (CPI), and Prime Interest Rate​.

11. Recession:

    • A period of declining economic activity.

12. Federal Reserve's Role in Stimulating the Economy:

    • Lower interest rates or purchase securities to encourage borrowing and spending.

13. Federal Reserve's Role in Slowing the Economy:

    • Raise interest rates or sell securities to curb inflation.

14. Business Cycle:

    • Phases include prosperity, recession, depression, and recovery.

15. Supply and Demand:

    • Supply: Quantity producers are willing to sell at different prices.

    • Demand: Quantity consumers are willing to buy at different prices.

    • Market Price: Where supply equals demand​.

16. Success Requirements:

    • Attributes like honesty, integrity, time management, communication skills, and professionalism​.

Chapter 8: Producing Quality Goods and Services

1. Operations Management:

   • Activities required to produce goods/services, creating utility (form and time utility).

2. Differences Between Services and Goods:

   • Services are intangible, perishable, inseparable, and variable​.

3. Production Planning:

   • Includes product lines, demand forecasting, capacity planning, and outsourcing.

4. Inventory Control:

   • Types of Inventories:

     1. Raw materials

     2. Work-in-process

     3. Finished goods

   • Inventory Costs: Acquisition, holding, and stock-out costs.

   • Techniques: Materials Requirements Planning (MRP) and Just-in-Time (JIT) systems.

5. Outsourcing:

   • Contracting external organizations to perform business functions.

6. Capacity:

   • Maximum production level a business can sustain to meet demand.

7. Just-in-Time (JIT) Inventory System:

   • Reduces waste by receiving goods only as they are needed in the production process​.

• Lean Manufacturing: A methodology that focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity.