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Unit 2 Business

1. Capacity utilization: Percentage of current output to the maximum capacity.

2. Capital intensive: Production is largely based on machinery rather than labour

3. Buffer Stock: Minimum stocks held to be used in case of emergencies such as delays in

delivery.

4. Re-order level: Level of stocks that will trigger a new order to be sent to the supplier.

5. Re-order quantity: Quantity of stocks being ordered at each time.

6. Lead time: Time between order and delivery

7. Economic order quantity: Optimum order size at which the ordering cost and the stock

holding cost will lead to a minimum total cost.

8. Just- in- time: Stocks will arrive at the production floor at the time and the quantity at whichit is required so that no buffer stock is needed.

9. Quality assurance: Setting the quality standards throughout the organisation and ensuringthat they are complied with.

10. Quality control: Organizations set up teams of employees who are assigned the task of

finding out ways to improve the quality.

11. Total quality management: Philosophy that quality is everyones responsibility.

12. Culture: This term refers to the shared values, beliefs and norms which exist amongst the

workforce in a business.

13. Product design- function, aesthetics (relating to beauty) and cost

14. Inelastic demand: Percentage increase in price is more than percentage increase in demand

15. Elastic demand: Percentage increase in demand is more than percentage increase in price.

16. Increasing market share: Requires sales to rise faster than for the market as a whole

17. Product life cycle: is the course that a products sales and profit take over its lifetime./ Four

distinct but not wholly-predictable stages every product goes through from its introduction towithdrawal from the market

18. Boston Matrix: The way of analysing the current and possible future position of a range ofproducts owned by a business

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19. Product extension:

20. Branding: This means creating a name and identity for a product which differentiates it

from those of competitors.

21. Trade mark: Distinctive design, graphics, logo, symbols, words, or any combination thereof

that uniquely identifies a firm and/or its goods orservices, guarantees the item's genuineness,and gives it ownerthe legal rights to prevent the trademark's unauthorized use.

22. Patent: An entrepreneur can use patents and copyrights to protect a new product, process,

invention or information against copying and reproduction by other people without theentrepreneur's permission.

23. Packaging: is a material which tries to protect a product.

24. Labeling: Display ofinformation about a product on its container,packaging, or the productitself.

25. Penetration pricing: The price of the product is set at a low level in order to build up a large

market share and a high degree of brand loyalty. The price may be raised over time, as theproduct builds up a strong brand-loyalty.

26. Skimming pricing: This is a pricing strategy for a new product, designed to create an up-

market, expensive image by setting the price at a very high level. It is a strategy often used

for new, innovative or high-tech. products, or those which have high production costs whichneed recouping quickly.

27. Cost- plus pricing: This is where the cost of producing each unit is calculated, and then a

percentage profit is added to this unit cost to arrive at the selling price.

28. Niche marketing: When a marketer targets one or a very few segments that it findsprofitable, it is known as niche marketing.

29. Mass marketing: involves using the same marketing mix for all the segments in the market,here the marketer ignores the importance of segmentation i.g. Coke traditionally used to

target the whole market with the same product (Tk. 10 glass bottle).

30. Budget: is a planning that is based on prediction of the future.

31. Forecasting: is prediction of the future.

32. Cash-flow: is the inflow and outflow of cash from a business over period of time.

33. Working Capital: Funds left over to meet day-to-day expenses after current debts have beenpaid

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34. Tall organization: are those having higher stages of hierarchy with a narrow span of control

35. Flat organization: are those having few stages of hierarchy with wide span of control.

36. Span of control: This refers to the number of subordinates who are accountable to a specific

manager. The span of control is described as 'wide' if there are many subordinates reporting

directly to a manager.

37. Decentralization: This means passing responsibility and authority away from the

headquarters of the business to regional offices and departments.

38. Centralization: it means keeping all of the important decision making powers with head

office or the centre of the organization.

39. Internal recruitment: It occurs when employees are recruited from the organization by

giving promotions as well as transferring from one department to another.

40. External recruitment: It occurs when employees are recruited from outside the

organization.

41. Labour Turnover: Number of people who leave a business over a period of time as a

percentage of the number of people employed.

42. Voluntary labour turnover: Employees leave the organisation by themselves.

43. Job enrichment: This is a method of motivating employees by giving them more

responsibilities and the opportunity to use their initiative.

44. Job rotation: This involves the employees performing a number of different tasks in turn, in

order to increase the variety of their job and, therefore, lead to higher levels of motivation.

45. Job enlargement: This involves increasing the number of tasks which are involved in

performing a particular job, in order to motivate and multi-skill the employees.

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46. Empowerment: This involves a manager giving his subordinates a degree of power over

their work (i.e. it enables the subordinates to be fairly autonomous and to decide for

themselves the best way to approach a problem).

47. Team working: This is the opposite production technique to an assembly-line which uses an

extreme division of labour. Team working involves a number of employees combining toproduce a product, with each employee specializing in a few tasks. Cell production is an

example of team working.

48. Delegation: This occurs when managers pass a degree of authority down the hierarchy to

their subordinates.

49. Flexible working: A system of flexible working hours gives the employees some choiceover the actual times that they work their contracted hours. Such a system is a good way of

recruiting and retaining staffs as it provides an opportunity for the employees to workaccording to their own commitment.

50. Staff Dismissal: employees may be dismissed for a variety of reasons. It may be for joining

a trade union, secondly for misconduct or being incapable of doing a job. However, a notice

period is required for the employee to be dismissed. The length of the notice may depend on

the length of service of the employee.