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Operations

GCSE Business Operations

Term	Definition
Supplier	A business which sells products to another business
Customer	Any person or organisation which buys or is supplied with a product.
Consumer	The person who ultimately uses a product
Markets	Where buyers and sellers meet to exchange goods and services.
Franchisee	A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.
Franchisor	The business that gives franchisees the right to sell its product in return for a fixed sum of money or a royalty payment.
Franchise	The right given by one business to another to sell goods or services using its name.
Financial objectives	Targets expressed in money terms such as making a profit
Companies	Businesses whose shareholders have limited liability.
Sole trader	A business with one owner with unlimited liability.
Unlimited liability	A legal obligation on the owner of the business to settle all debts of the business. In law there is no distinction between what the business owes and what the owner owns.
Limited liability	When shareholders of a business are not personally liable for the debts of the business. They only lose what they invest.
Private Limited Company	Only sells shares to family and friends - a LTD
Public Limited Company	Can sell shares on the stock market - a PLC.
HMRC	The government authorities in the UK responsible for collecting tax.
VAT	Value Added Tax - a tax on the value of sales, it is paid by businesses to government.
Income Tax	A tax on the value of income earned by workers. This includes sole traders who pay income tax on what they earn.
NIC	National Insurance Contributions - a tax on the earnings of workers.
Corporation tax	A tax on the profits of limited companies
Customer Service	The experience a customer gets when dealing with a business and the extent to which the needs are meet.
Design Mix	The range of variables which contribute to successful design: they are function, cost and appearance.
Prototype	A working model of a possible finished product.
R	Research and development
Stock	Raw materials, semi finished goods and finished goods.
Maximum stock level	The highest amount of stock to be kept by a business
Re Order Level	The amount of stock held by a business at which an order for new stock is placed with suppliers.
Buffer stock	The lowest amount of stock to be kept by a business.
JIT	Just in Time - a stock management system where stocks are only delivered when they are needed by the production system, and so no stocks are kept by a business.
Quality	Achieving a minimum standard for a product or service, which meets customer requirements.
Quality control	Ensuring that a product meets minimum standards through checking the product before it reaches the customer.
Quality assurance	Ensuring that quality is produced and delivered at every stage of the production process.
Kaizen	Continuous improvement - all workers focussed on improvements. A Japanese concept.
Zero defects	No substandard products being made.
Productivity =	Total output/no. of workers
Sale of goods legislation	Gives consumers rights to compensation if a product they buy is not of merchantable quality, not as described or not fit for quality.
Trade description legislation	Makes businesses liable for prosecution and fines if products are sold in a misleading way.

Created by: dduguid

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