Summary CIE A-Level Business Studies Unit 4: Operations
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Course
Unit 1 - Business and its environment (9609)
Institution
CIE
This section of my summarised notes covers the topic operations and project management in CIE 9609 Business Studies.
These are simple, stylised note pack which are perfect for AS business studies revision. They cover all the topics in the CIE syllabus with needed detail to ensure you get the per...
Enterprise
What do businesses do?
- Identify needs of consumers and purchase factors of production to produce goods/services to
satisfy these needs
Goods: physical and tangible goods sold to the general public e.g. food and drinks
Services: non-tangible products sold to the general public e.g. hotels, insurance
Factors of Production:
Land: all natural resources (renewable and non-renewable)
e.g. coal, fish, water, wood, metal
Labour: all human effort available for production; manual and skilled workers
Capital: not just finance needed bu all human made resources of production
e.g. machinery, tables, combs
Enterprise: the entrepreneur that takes the risk of setting up a business and uses the factors of
production to product goods and services to make a profit. It provides a managing, decision-making
and coordination role.
e.g. Elon Musk, Steve Jobs
Adding Value
All businesses aim to sell products at a higher price than cost of goods sold;
Adding Value: The process of increasing the worth or value of resources by working on them.
NB: Value added is not profit made as part of the value goes towards other business expenses
Ways of Adding value:
• painting/colouring • Limited edition • Speed
• Increasing quality • Packing • Accessories
• Printing • USP • Reduction in waste
• Change material • Brand • Cost-cutting
• Transport worldwide • Better customer service
Opportunity Cost
- There aren’t enough factors of production to satisfy all our needs and wants because we are
limited by the resources - there are scarce
- Consumers must choose which method is best to produce with the scare resources
Opportunity Cost: what has to be given up by not being chosen; the next best alternative sacrifice
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