Year 11 Business Studies Revision Questions Topic 2 Key Business Functions Chapters 7,8,11 Chapter 7: Interdependence of Business Functions

1. What are the four main business functions? (p 143) Operations Marketing Employment relations Accounting and finance 2. Define the term Operations (p 143) Operations refer to the business processes that involve transformation or more generally, production. 3. Define the term Employment Relations (p 143) Employment relations cover all aspects of employment resourcing, including the acquiring, developing, maintaining and motivation of staff in addition to those processes involved when staff leaves the business. 4. Define the term Marketing (p 144) Marketing is about meeting the needs and wants to consumers through provision of products. 5. Define the term interdependence (p 144) Interdependence means the key business functions work best when they overlap and employees work towards common goals. Each function area depends on the support of others if it to perform at capacity. 6. What is a mission statement? (p 150) A mission statement is a written statement that summarises the vision and values of the business 7. What is an operational plan? (p 152) An operational plan is a short-term plan that helps manage and achieve long-term goals. (12 months) 8. What is a strategic plan? (p 152) Determined by a board of directors, a strategic plan is a long-term holistic plan or goal that requires the commitment of each of the key business functions. 9. Explain the term planning (p 152) Planning is a managerial and leadership task that involves looking ahead to see whether the current business operations are sufficient for success within the business. 10. What does the term controlling involve? (p 153) reviewing actions Accounts for variance Suggests new undertaken between planned and parameters actual performance Creates performance reports 11. What is a functional structure? (p 156) Functional structure refers to the activities or operations organised accordingly to key functions and geographic factors. 12. What is a market structure? (p 156) Market structures are types of organisational design based around markets to consumer types 13. Explain the term division of labour (p 158). Division of labour refers to the separation of power that occurs within organisations on the basis of responsibility and expertise. It may be a function of hierarchy due to business structure, status, position, skill, education or experience. 14. Explain the term span of control (p 160). Span of control refers to the number of people for whom a manager is directly responsible for. 15. What is a chain of command? (p 161) A chain of command is the flow of authority form senior management down to supervisors and then workers 16. What does delayering mean? (p 161) Delayering is the removal of levels of management within a business.

Chapter 8: Operations Manufacturing and services

17. What are the six categories of inputs? (p 171) Material inputs: Raw materials that are consumed or converted by the transformation process. (banks computers, manufacturers steel) Capital equipment: includes the plant, machinery, property necessary to conduct operations. (banks safes, computer monitors etc, manufacturers forklifts) Labour: people who carry out operations (banks tellers, manufacturers drivers) Information from a variety of sources: contributes to the transformations process. (Is generally important to a business as it is not classed as an asset) for example, the bank might use information provided by market research companies to assist product design and delivery. Time: effective use of is critical. Co-ordinating resources within time frames limit costs and wastage. Operational planning may involve achieving production tasks.

Money: considered generally as the most flexible of all resources, easily converted into any quantity or combination of materials, capital or labour. 18. Explain the difference between inputs and outputs (p 171). 19. Inputs are resources used in the process of production Inputs are resources used in the process of production. Outputs refer to the end result of a businesss efforts the product or service that is delivered or provided to the consumer. 20. What is a supply chain? (p 179) A supply chain in is the range of suppliers from which the business purchases materials and resources. If the suppliers are irregular in the time it takes to receive them and in their quality, this affects the whole operations process. 21. What does supplier rationalisation mean? (p 179) Supplier rationalisation is the process a business goes through when it reviews and reduces the number of suppliers it purchases form. Maximises efficiencies, supplier reliability, stronger ties between supplier and business 22. What is task design? (p 184) Task design involves classifying job activities in ways that make it easy for an employee to perform and complete a task successfully. 23. Explain the difference between CAD and CAM (p 191). Computer Aided Design (CAD) is a computerised design tool that allows businesses to create product possibilities from a series of input parameters (Graphic Design) Computer Aided Manufacture (CAM) is software that controls the manufacturing process 24. Name the different Types of plant/office layouts: Project production (large scale, bulky e.g. buildings) Process production (LOW VOLUME, factories, conveyer belts) Product production (HIGH VOLUME, mass production, assembly lines e.g. computers, cars) Workstations (Offices e.g. call centres, doctors) Warehousing (storage systems) 25. What is a stock take and why are they useful? (p 194) Stock take involves the physical counting of goods to determine how much of each shock item the business has on hand at a certain point in time, and to see which products need restocking. 26. What is records management? (p 195) An administrative task that involves the collection of data about the business and its operations, storage and collection of all records, maintenance of these and occasional rationalisation deleting of unnecessary files. 27. Why is it important to maintain accurate and up-to-date data? Use examples. (p 196) Efficient management of business operations because the data is used as a basis upon which decisions are made, e.g. whether to order more raw materials or the number of staff required etc. Database Management Systems 28. What are database management systems? (p 196) A database management system is software (computer-based filing system) that is used to: Create a database View sections of the database Edit, add and remove data Create reports 29. The benefits of a DBMS to: (p 197) The Customers quick and easy search of the database can access the product details and availability (customer service) The Employees can details are easy to get hold of for products to inform customers (customer service) The Business keeps track of stock, informs when stock replenishment is required, assists with stock take, also makes jobs quicker, cheaper, more efficient and customer service is sufficient. Explain the uses of database management to small businesses. (p 198) 30. A DBMS has many uses in a small business: Managing customer and supplier records Preparing mailing list from the database of name and address Storing staff details Maintain stock levels Cataloguing equipment

Chapter 11: Accounting and Finance

31. What is a revenue statement used for? (p 245) Revenue statements are used to detail the income received and the expenses incurred during a period of time. 32. What is another name for the revenue statement? (p 245) Income statements, profit and loss statements and statements of financial performance 33. What is the balance sheet used for? (p 245) A balance sheet is used to detail stability of a business in terms of what it owns and what its owes. 34. What is another name for the balance sheet? (p 245) Statement of financial position 35. What is an audit and why are they important? (p 247) Audits refer to a formal check of the accounting and financial procedures used by a business. 36. Explain the difference between accounting and finance (p 247) Finance refers to how money is used to fund activities within a business and accounting is the managerial tool used to control and record any transactions of money. 37. Explain the difference between debt and equity finance (p 248) Equity finance is money borrowed to fund any business activities which is sourced from within the business e.g. the owners 38. Name three forms of debt finance (p 250) Banks (Commonwealth) Suppliers (e.g. accounts payable/receivable allowances) Non-banks (e.g. credit unions, mortgage originators (e.g. Aussie Home Loans)) 39. Distinguish short term from long term finance (p 251) Short-term finance is when the amount needs to be paid off within 12 months, long-term is more than 12 months 40. Name 4 different types of debt finance and state if they are short or long term (p 251) Credit cards Short Mortgage Long Overdraft Short Targeted Loans - Long 41. Explain the items used to calculate net sales (p 259) Sales Less Discounts Less Returns 42. What is COGS? Explain the formula used to calculate COGS (p 260) COGS = Opening Stock + Purchases Closing Stock 43. What is gross profit? Explain the formula used to calculate gross profit (p 259) GP = Sales - COGS 44. What are expenses? Explain the three types of expenses with two examples of each (p 260) Expenses are any monies that the business has to outlay to another stakeholder. There are three categories they are usually in: Selling: e.g. electricity, commissions, salaries, wages, advertising, delivery expenses Administrative: e.g. stationary, admin wages, rent, telephone, rates, insurances, accountants fees, audit fees Financial: e.g. interest payments, lease payments, dividends 45. In balance sheets, what is the accounting equation? (p 266) A = L + OE 46. What is an asset? (p 264) An asset is anything of value that the business owns e.g. physical machinery, furniture and cash and non-physical patents. 47. What is a liability?(p 264) A liability is anything that a business owes another e.g. loans, mortgages, debts 48. What is owners equity? Explain three types of owners equity that can be found on the balance sheet (p 265) Owners equity is any money that is invested into a business by the owners. 49. What is an intangible asset? Give examples (p 264) An intangible asset is something of worth but is not of physical substance e.g. goodwill and patents 50. What does liquidity mean? (p 268) Liquidity refers to the amounts of money a business has access to and how readily it convert its assets such as inventory into cash to pay debts 51. What does a cash flow statement show? (p 268) A cash flow statement shows the liquidity of a business 52. Describe the difference between cash inflows and cash outflows. Give three examples of each (p 269) Cash inflows are monies inflowing from other sources e.g. retail, public and manufacturers Cash outflows are monies flowing out from the business e.g. Service Costs, leases and wages