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4 Cards in this Set
- Front
- Back
what is efficiency? |
is all about making the best possible use of the business resources. a business will want to use its materials labour and capital as effciently as possible |
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how to measure effciency? |
businesses often use costs as a measure of effciency. production is said to be effcient if 'average costs are minimised' |
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what does the average cost curve for a business show? |
this shows that average costs start to fall, reach a minimum at £20 when resources are used most effciently and rise again. if the busines only made 200 units production would not be effcient as they would cost £30 eahc to make. |
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what are the factors affecting effciency? |
- standardisation -outsourcing - relocating - downsizing - delayering -investing in new technology - lean production- use fewer resources in production -kaizen- contious improvement - just in time production- minimising stock held by business and costs associated with stock holding. |