BUSINESS STUDIES FLASHCARDS 2 (MOD2)

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  • Created by: Rhiannan
  • Created on: 13-03-13 22:27
WHY DO MANAGEMENTS USE BUDGETS?
1)Establish priorities and set targets 2)Provide direction 3)Assign responsibilities 4)Communicate targets 5)Motivate staff 6)Improve efficiency 7)Monitor performance 8)Control income and expenditure 9)Forecast outcomes
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HOW MANY APPROACHES ARE THERE TO BUDGETING?
There are three 1) Historical budgeting 2)Zero budgeting 3)Management by exception
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WHY MAY FIRMS HAVE A SHORTAGE OF CASH?
1)Seasonal demand 2) Over-trading 3)Over-investement 4)Credit-sales 5)Poor stock management 6) Unforeseen change 7)Losses or low profit 8)Poor management of suppliers
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HOW MANY METHODS ARE THERE FOR IMPROVING CASH FLOW?
There are 5 1)A bank overdraft 2)A short term loan 3)Factoring 4)Sales of assets 5)Sale and leaseback of assets
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NAME 3 METHODS OF IMPROVING PROFIT/PROFITABILITY
1)Increasing the price 2)Decreasing costs 3)Increasing sales volume
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WHAT MAY HAPPEN IF A COMPANY INCREASES THE PRICE FOR A PRODUCT
Demand may drop
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WHAT ARE 3 THINGS YOU SHOULD CONSIDER BEFORE INCREASING THE PRICE OF A PRODUCT
1)Are there any competitors 2)Are there alternatives 3)Is the product a necessity
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WHAT MAY HAPPEN IF A FIRM CUTS VARIABLE COSTS?
Profit margins will increase meaning each product will yield more profit OR the change in cost may lead to a decrease in quality eg inferior raw materials so the demand for the product may fall
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WHAT MAY HAPPEN IF A FIRM CUTS FIXED COSTS?
Profit may increase however it wont if the cost cutting leads to lower sales eg moving the shop and locating it in a less accessible place
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WHAT ARE 3 EXAMPLES OF METHODS TO INCREASE SALES VOLUME
1)Increase marketing 2)Develop new ideas 3)Improve quality
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WHAT DO OPERATIONS MANAGERS LOOK AT?
1)Location 2)Resources to use and converting them into outputs 3)Capacity utilisation 4)Organising stock control 5)Customer service 6)Working with suppliers 7)Using technology 8)Quality
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Other cards in this set

Card 2

Front

HOW MANY APPROACHES ARE THERE TO BUDGETING?

Back

There are three 1) Historical budgeting 2)Zero budgeting 3)Management by exception

Card 3

Front

WHY MAY FIRMS HAVE A SHORTAGE OF CASH?

Back

Preview of the front of card 3

Card 4

Front

HOW MANY METHODS ARE THERE FOR IMPROVING CASH FLOW?

Back

Preview of the front of card 4

Card 5

Front

NAME 3 METHODS OF IMPROVING PROFIT/PROFITABILITY

Back

Preview of the front of card 5
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