Edexcel Business A Level Revision

Batch production - Identical or similar items are produced together in groups (batches), each item passing through the production process at the same time, before moving onto the next Examples of batch production: Printers = printing a certain number of newspapers, magazines or books and then resetting their machines to produce a batch of another issue or titles Baker = produces a batch of 50 white loaves. Only after they are completed will he or she start baking 50 loaves of brown bread. Factory = produces a batch of size 14 t-shirts, then a batch of size 12 t-shirts Aims: Concentrate skills Achieve better use of equipment and so will produce good quality products more economically than manufacturing them individually.   BATCH PRODUCTION ADVANTAGES DISADVANTAGES Costs savings can be achieved when buying in bulk and allows for quicker and cheaper production of individual items Time consuming as it may take time to swi...

Working capital - provides a strong indication of a business' ability to pay is debts. By adding together the totals for current assets and current liabilities in the balance sheet, a very important figure can be calculated – working capital. Working capital = current assets - current liabilities   Every business needs to be able to maintain day-to-day cash flow. It needs enough to pay staff wages when they are due, and to pay suppliers when invoice payment terms are reached. Maintaining adequate working capital is important both in the short-term (day-to-day) and the long-term. The challenge is to maintain sufficient liquidity in the business to ensure the business can survive and grow in the long-term. The current liabilities show the amounts that need to be paid in the next twelve months. Current assets show the cash and other assets that are available to settle those current liabilities. Of course the balance sheet is just a snapshot...